- Bangladesh abruptly removed central bank governor Ahsan Habib Mansur before 2028 term ended
- Mansur stabilised economy with record remittances, easing exchange rate volatility, and reserve recovery
- Opposition criticised removal as undemocratic and warned of economic harm amid corruption concerns
Bangladesh's newly sworn-in government under Tarique Rahman has stumbled into its first major controversy after abruptly removing the governor of the country's central bank, triggering sharp political backlash and raising concerns among investors.
Governor's Sudden Exit Sparks Questions
The administration announced on Wednesday that it had appointed Md Mostaqur Rahman as the new Governor of Bangladesh Bank, effectively ending the tenure of Ahsan Habib Mansur well before its scheduled expiry in 2028.
Mansur confirmed his departure to Bloomberg News, saying he learned of the move through television reports. “After seeing the TV news that I'm being replaced, I left the job,” he said in a phone interview. “There are formalities remaining. I will do that later.”
Appointed in August 2024 during the interim government led by Nobel laureate Muhammad Yunus, Mansur, a former IMF economist, had been widely credited with stabilising the country's fragile macroeconomic situation. During his tenure, remittances hit record levels, exchange rate volatility eased, and foreign exchange reserves showed signs of recovery.
Political Backlash Mounts
The decision has drawn criticism from across the political spectrum.
Shafiqur Rahman, an Opposition leader from Jamaat-e-Islami, described the move as “the formal beginning of mob culture backed by the current government.” In a Facebook post, he wrote, “No one has the right to insult respected figures such as the governor of Bangladesh Bank and his advisers in this manner.”
He added, “The country's economy is already in dire straits, with an epidemic of corruption at all levels… if such undesirable activities continue at the highest level of the state, such as Bangladesh Bank, the rest of the country's economy will also be destroyed.”
NCP convener Nahid Islam also criticised the move, calling the process “shameless and undemocratic.” Speaking at an event in Dhaka, he alleged, “The governor was removed through mob pressure to install a loan-defaulter businessman, undermining the aspirations of the July Uprising.”
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Controversy Over New Appointment
The appointment of Mostaqur Rahman marks a break from tradition. Historically, Bangladesh Bank governors have been seasoned economists, senior bankers or career civil servants with deep expertise in monetary policy. Rahman, by contrast, is a cost and management accountant and garment sector entrepreneur.
Before assuming office, he chaired the Bangladesh Garment Manufacturers and Exporters Association's standing committee on the central bank and was a member of the ruling Bangladesh Nationalist Party's election steering committee.
His corporate background has also drawn scrutiny. According to media reports, Mutual Trust Bank rescheduled Tk 89 crore worth of loans to his company, Hera Sweaters, last December under a special distressed-borrower facility, extending repayment over 10 years with a two-year grace period. A senior banking executive told The Daily Star, “How can someone who rescheduled loans for his own company under special terms work in the interest of the country's banks? It is a clear conflict of interest.”
Reform Legacy At Stake?
Mansur had overseen a decisive policy pivot, moving away from artificial exchange rates and interest rate caps toward more market-based mechanisms. By tightening liquidity and allowing the taka to adjust more freely, he signalled a commitment to orthodox monetary discipline at a time when Bangladesh was grappling with dwindling reserves and mounting non-performing loans. His leadership reassured institutions such as the IMF and the World Bank that Bangladesh was serious about structural reform. Observers say his removal, just as stabilisation efforts were beginning to yield results, risks denting investor confidence.
Critics argue that replacing a governor widely seen as steering a macroeconomic recovery sends a troubling signal to global markets, especially as Bangladesh remains engaged in negotiations for expanded credit facilities.
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Government's Defence
Finance Minister Amir Khosru Mahmud Chowdhury defended the move, saying leadership changes were natural under a new administration.
“There's nothing to consider. A new government has taken office and has its priorities,” he told reporters. “Changes have not only occurred at Bangladesh Bank; changes are happening in many places and will continue to happen.”
“To align with and implement the new government's programmes, preferences, thoughts, and vision, changes will be made wherever necessary. This is perfectly normal,” he added.
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