There is no better way for the ruling party to signal that it understands this new reality and that recognizes that it is truly a new day in Bangladesh, and that they too have changed their spots accordingly, than for them to quietly walk back the appointment.
Bangladesh is not on the verge of collapse, but it remains fragile. During periods of economic uncertainty, central banks must stay above politics. When monetary authority appears negotiable, inflation expectations shift, currency stability drops, and fiscal discipline weakens.
This government came to power with a democratic mandate. But it risks squandering it. City administrations must look neutral. International crimes prosecutions must feel independent. And the central bank must signal credibility beyond politics.
When it comes to the central bank governor, optics are everything. If he is perceived to be the government's man, then no one will have the necessary faith in him, and he will fail before he even starts.
Keeping interest rates artificially low is a recipe for disaster. We have been here before -- not even too long ago -- and we know how this story ends. It won't be pleasant for anyone, least of all the newly-elected government.
An independent central bank could have prevented bank fraud and inflation. There is no alternative unless we want to return to the bad old days of high inflation and a plummeting Taka.
A country aspiring to become a trillion dollar economy cannot afford to operate with manual, subjective, or personality-driven oversight. It needs strong institutions delivering predictable outcomes.
Without urgent steps to make Bangladesh Bank truly autonomous and accountable, meaningful economic reform will remain incomplete.
