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Independence for Bangladesh Bank is essential to restore the country’s economic health, said experts at an event organised by the Policy Research Institute.

They made the comment at an event titled ‘The Imperative for Central Bank Independence’ organised by the PRI in the capital on Tuesday.

Attending as chief guest, Bangladesh Nationalist Party standing committee member Amir Khosru Mahmud Chowdhury said, ‘You are either independent or not — autonomy does not matter here. The economy will not function properly without ensuring the independence of Bangladesh Bank. This is not only my personal view but also the official position of my political party.’

‘We even abolished the Banking Division because it served no real purpose — but it was later reinstated, creating further complications,’ he said, adding that for the central bank to function effectively, the Financial Institutions Division (FID) must be abolished without question.

Ashikur Rahman, principal economist at PRI, said the question of central bank independence has long been centre of economic debate. He explained that inflation can be effectively controlled when expectations are anchored at low levels, money supply is managed efficiently, and the exchange rate remains stable.

Such macroeconomic management is only possible when the central bank enjoys credibility, and that credibility stems from its independence, he said.

He added that since the 1990s, independence has become the dominant doctrine in economic governance worldwide. When supply shocks occur, their impact is mitigated by tight monetary policy. Economic logic should drive monetary policy — not political interests.

Among others, Abdul Hai Sarker, chairman of the Bangladesh Association of Banks; Mohammad Akhtar Hossain, chief economist at Bangladesh Bank; Fahmida Khatun, executive director of the Centre for Policy Dialogue; Syed Nasim Manzur, president of the Leathergoods and Footwear Manufacturers & Exporters Association of Bangladesh; M Masrur Reaz, chairman of the Policy Exchange of Bangladesh; and Showkat Aziz Russell, president of the Bangladesh Textile Mills Association, also spoke at the event.

Fahmida Khatun said the entire banking sector had deteriorated and the interim government only revealed the true picture. ‘To restore order, the Financial Institutions Division must be abolished and Bangladesh Bank allowed to be operated independently,’ she said.

Masrur Reaz said that Bangladesh must have a clearly defined monetary policy framework with explicit legal provisions prohibiting direct government borrowing. Bangladesh Bank should determine its own budget. The X-factor here is political will. Without it, none of these reforms will work. Politicians must learn from past experiences, he said.

PRI chairman Zaidi Sattar said that the country needs a central bank capable of supporting macroeconomic stability and growth-friendly policies. Central bank independence is ideal, but it will not be easy to achieve—it is a deeply political decision.