Bangladesh Bank Governor Abdul Rouf Talukder has been given a D grade as a governor by New York-based Global Finance magazine, citing high inflation and taka devaluation. Meanwhile, the central bank governors of India, Vietnam and Switzerland received an A+ rating.
“For Bangladesh Bank (BB), like many other central banks in the Asia-Pacific region (APAC), its obligations were reasonably met during the first half of the review period. Post-COVID-19 GDP growth “The inflation rate was 0.6% above the BB’s 5% target and the taka remained stable,” Global Finance said. Central Banker Report Card 2023 Published on Sunday (September 24th).
“But by mid-2022, the taka had been devalued by 9.5%, importers suffered from a domestic dollar shortage, and the Ukraine conflict had soared energy and food costs, leading to rampant inflation. Although there have been calls for assistance from the International Monetary Fund (IMF), the structural weaknesses of Bangladesh’s economy and the government’s 60% control of the central bank create vulnerability to external factors such as an inflationary shock in 2022. “I have,” he added.
Zimbabwe’s John Manguja and Suriname’s Maurice Romer also received a D grade along with the Bangladeshi players. Governor Nandalal Weerasinghe, who led Sri Lanka out of bankruptcy and hyperinflation, received an A grade.
“Shaktikanta Das, Governor of the Reserve Bank of India, has achieved solid GDP growth.In 2021, the Indian economy grew by 9.1%, which is close to the highest on record, following 8.7% growth in the previous year. Another key performance indicator for him, the trajectory of lower inflation, saw the CPI decline from 6.5% in January to 4.25% in May and pause at 6.5% in April. It justifies the monetary tightening campaign carried out through six repo rate hikes, and Mr. Das must do so. “Outstanding performance is rewarded with the proverbial cigar,” the report said of India’s central bank governor.
“The rise in CPI to 7.4% in July should be dismissed as an outlier as irregular monsoon rains are impacting food prices. This suspension, described as a “stoppage,” came in the face of an economic crisis. “There was an analyst consensus that interest rates would rise by 25bps. Meanwhile, the highlight outcome was the introduction of liquidity rules for non-banking financial companies (NBFCs) and the introduction of liquidity rules for non-banking financial companies (NBFCs) and the introduction of liquidity rules for the often troubled NBFC sector in October last year. It was a regulatory framework that came into force in 2009.” .
Regarding Vietnam, “The National Bank of Vietnam is one of the few central banks that has cut interest rates this year, and the refinancing policy rate has been cut four times to 4.5% as of the last rate cut in June.” businessman,” he said. Governor Nguyen Thi Hong reaffirmed the rationalization of the country’s credit situation, especially for the cash-strapped SME sector, established at the start of his term in 2022. ”
“She has worked hard to cap interest rates on loans to priority sectors by the banking sector and to improve the effectiveness of local credit guarantee funds. Annual inflation fell to just 2.1% in July, which is the lowest in 2022. “This is a significant achievement given GDP growth of a stratospheric 8% in 2019 and a steady clip of 3.3% in the first quarter,” the report added.
Regarding Switzerland’s Thomas Jourdan, the report said: “Few central banks in the world did a better job of keeping inflation and interest rates in line with expectations in 2022 and 2023 than the Swiss National Bank (SNB). “No, despite raising interest rates to just 1.75%.” , the CNB has succeeded in controlling inflation, bringing consumer prices down from a peak of 3.5% last year to a comfortable 1.6% in August 2023. ”
“Furthermore, the bank has been highly praised by analysts for its timely intervention in the Credit Suisse case and for averting a widespread banking crisis in the European banking system,” the bank said in a letter published at the start of the event. Moody’s said: “Decisive and coordinated.” “The responses of the federal government, the Swiss Financial Market Supervisor and the Swiss National Bank confirm our view of Switzerland’s institutional strength.” Despite the pressures, the Swiss National Bank remains steadfast and focused on its mission, and the positive results bear witness to the current situation. The decision is correct,” he added.
Regarding Pakistan’s Jameel Ahmad, who received a C grade, the report said: Before being appointed Governor of the State Bank of Pakistan (SBP) in August, Mr. Ahmad oversaw the bank’s digital transformation as Deputy Governor and served as the Bank’s Executive Director. Banking Supervision and Financial Stability Group. Mr. Ahmad was instrumental in helping Pakistan secure a nine-month IMF Standby Agreement (SBA) for approximately $3 billion. A core element of the agreement is a market-determined exchange rate. The deal helped avert the risk of an impending government default, sending Pakistan’s one-year dollar bond up 10 points and pushing the Pakistani rupee up 4%. Still, the currency has depreciated by 20% against the dollar so far this year, and inflation hit a record high of 38% in May, despite the SBP raising its policy rate by 1,125bps to 21% from April 2022. reached and continues to decline. CPI for July was 28.3%, higher than the SBA’s 2023/2024 fiscal year forecast of 21%. ”
Since 1994, Global Finance magazine has ranked governors around the world. Its “Central Banker Report Card” is published regularly as an annual publication of the periodical.
The latest report for 2023 is published based on the assessments of the central bank governors of 101 major countries. The report evaluates each country’s central bank governors in five categories: A, B, C, D, and F. Among these, categories A, B, C, and D are further divided into three subcategories based on performance evaluation. Governors in this class are therefore rated in the A+, A, and A- subcategories.
If a country’s central bank is deemed incompetent and ultimately bankrupt, its governor is ranked F grade.
Factors such as strict inflation control, protection of local currency exchange rates, and strengthening of foreign exchange reserves emerged as criteria for evaluating governors.
Bangladesh worsened in these indicators last year.
Global Finance said it considers the weak economic structure and government control over the central bank to be Bangladesh Bank’s major weaknesses.