He refused the accolade as he did not want to take the credit alone, saying the whole bundle of rescue measures was an outcome of collective efforts
Governor of the Bangladesh Bank Fazle Kabir has been named the Central Bank Governor of the year 2020 in South Asia in recognition of the central bank's remarkable performance in fighting against the Covid-19 crisis by taking timely measures.
GlobalMarkets, the newspaper published for 30 years to cover the International Monetary Fund/the World Bank, the European Bank for Reconstruction and Development, the Asian Development Bank, and the Inter-American Development Bank annual meetings, has selected Fazle Kabir for the award considering the performance of the Bangladesh Bank's stalwart in the fight against Covid-19.
However, Fazle Kabir refused the award as he did not want to take the credit alone, saying the whole bundle of rescue measures for the immediate, short, and medium terms was an outcome of concerted efforts of the Prime Minister's Office, the Finance Division, different ministries, and the central bank.
Fazle Kabir has been serving the central bank as the governor since March 2016. He was reappointed for two more years till July 2022 after completion of his four-year tenure in March last year.
The managing editor of GlobalMarkets recently wrote to the governor, inviting him to receive the award.
The letter said, "The Bangladesh Bank has been a stalwart in the fight against Covid-19. The central bank's decision to cut a multitude of key lending rates – including a bank rate that had been unchanged for 17 years – was a clear sign of its willingness to fight the economic impact of the virus."
"But the Bangladesh Bank did more than simply cutting rates. The special repo programme, the debt moratorium, and the announcement of bond purchases were all key moves to alleviate fears among market participants."
"You deserve credit for a remarkable performance in an incredibly difficult year."
In reply to the letter, the central bank governor refused the award and said to overcome the adverse effects of the Covid-19 pandemic, the Bangladesh government had lined up massive support measures to help out the affected businesses and vulnerable population segments facing the loss of work opportunities for their livelihoods.
Under the direct guidance of the prime minister, the government has provided well over Tk1 lakh crore of stimulus packages – 4.03% of the Gross Domestic Product (GDP) – in its effort to bring the economy back on track.
The Bangladesh Bank has been actively participating in this massive endeavour with its various policy relaxations and with low-cost refinances and lines of credit as a partner in the fight against the virus.
Simultaneously, the finance ministry has taken various fiscal measures as part of the teamwork to tackle the fallout of the pandemic situation.
The measures undertaken by the Bangladesh Bank are also a result of coordinated efforts of its different departments like banking regulation and policy, SME and special programmes, agricultural credit, financial inclusion, and most importantly, monetary policy.
With all these appropriate and timely policy interventions, the economy of Bangladesh has started to rebound in terms of an increased volume of exports, imports, remittances, small businesses, and financial service activities.
Yet, the shadow of the pandemic-related uncertainties in Bangladesh, as elsewhere, is far from over.
"It is still in its early days and we need to continue our coordinated efforts for the country's economic recovery and also to achieve our medium- and long-term economic goals," according to the governor's reply.
The Bangladesh Bank's timely measures of providing liquidity support and rate cuts kept banks afloat even during the pandemic. Though banks were in a liquidity crunch in the pre-pandemic period, excess liquidity picked up to a historic high of around Tk2 lakh crore last November, thanks to liquidity support from the central bank.
High excess liquidity helped banks bring down the lending rate to the lowest level, creating opportunities for affected businesses to rebound by taking low-cost financing.
Most banks are lending at 7-8% during the pandemic situation, though the government was forcing banks to implement the 9% lending rate in the pre-pandemic period.
The Bangladesh Bank also remained in the comfort zone with a surplus current account balance and stable dollar price even during the pandemic, thanks to strong remittance inflows.
The foreign exchange reserve crossed the $43 billion-mark recently, giving the central bank a food for thought to use the high reserve in the infrastructure sector.