ECONOMYNEXT – Protesting staffers have stormed the office of Bangladesh Central Bank Governor and forced the resignation of Deputy Governors, media reports said days after the Prime Minister was ousted in the wake of two years of monetary instability and a plunging currency.
Around 200 Bangladesh Bank came to the offices around 1030 am and demanded their resignation, The Daily Star reported, while more were holding placards at the front of the building.
Governor Abdur Rouf Talukder was not office at the time, but two Kazi Saidur Rahman and Nurun Nahar, were forced to sign resignation letters on blank sheets of paper and then left with the help of army officials, the Financial Express reported.
Protestors also demand the resignations of Deputy Governor Khurshid Alam and Habibur Rahman, head of the Bangladesh Financial Intelligence Unit Masud Biswas, and central bank adviser Abu Farah Md Naser, the newspaper said.
Protestors blamed the officials for irregularities and corruption in the banking sector.
The central bank of Bangladesh kept interest rates down and narrowly targeted a policy rate as the economy recovered from a Coronavirus crisis leading to a steady depreciation of the currency.
The Taka which around 84 to the US dollar during the Coronavirus crisis, started fall as the policy rate was narrowly targeted to keep rates down as the economy recovered strongly from the pandemic and controls were intensified.
The central bank also bought long tenor government bonds to keep rates down in a process called ‘devolvement’.
The Taka was initially depreciated to around to around 103 to the dollar at the start of an IMF program in early 2023.
After anemic rate hikes the purchase of bonds to keep rates down was stopped, but the Taka was again depreciated in May to around 117 to the dollar in what was said to be a ‘crawling peg’ putting further pressure on the people.
Not many people know that central banks are responsible for currency depreciation through flawed operational frameworks developed around spurious monetary doctrines based on mathematical models rather than laws of nature discovered by classical economists.
In Sri Lanka, where the economy collapsed after rate cuts made to boost growth (target ‘potential output’ worked out by a mathematical formula for which technical advice was given by the IMF), two central bankers and Treasury officials who were ex-central bankers were taken to court by public interest activists.
RELATED: Top court faults Sri Lanka ex-President, Fin Min, PB, CB, Governors for economic collapse
In Sri Lanka money was printed both to ‘reflate’ the economy to 5-pct annual price rises and also to target potential output, after the end of a civil war, though the monetary authority had no growth mandate and only an economic stability goal.
Attorney General AM Amin Uddin has resigned from his post.
Protesting student leaders had proposed Muhammad Yunus as interim President but no cabinet has been appointed. Many senior officials in the Hasina administration had resigned or vacated their posts while sporadic vandalism continued.
Many police stations were closed after dozens were torched or razed to the ground by protestors, reports said.
Md Mainul Islam, Commandant of the traffic and driving school has been appointed as the new Inspector General of Police by the secretary to the ministry.
At least 18 people had died after a hotel owned by a former ruling party member. Hindu owned shops were also attacked and looted, other reports said.
India has called for calm and the protection of minorities. (Colombo/Aug07/2024)