The Bangladesh Bank on Thursday said that the recent ratings given by Moody鈥檚 rating agency did not appropriately reflect the positive changes that happened in the political and economic areas following the August mass uprising in the country.
The central bank issued a statement in this regard on the day.
It said that Moody鈥檚 had recently downgraded the ratings for Bangladesh from B1 to B2 and affirmed the short-term issuer rating as 鈥楴ot Prime鈥�. The outlook has also been changed to 鈥榥egative鈥� from 鈥榮table鈥�. In explaining the downgrade, Moody鈥檚 mentioned heightened political risks and possibilities for lower economic growth.
Following a political shift in the country on August 5, the BB has implemented a comprehensive set of measures to stabilise the banking sector and the economy.
The BB formed three task forces for the banking sector reform and has been pursuing stolen asset recovery at home and abroad.
Simultaneously, the interim government established a national task force to re-strategize the economy and mobilise sustainable development.
While these activities may not yield immediate economic benefits, they are paving a clear path towards strong economic recovery and social progress, the BB said.
鈥榃e firmly believe that there is no systemic risk to the banking system and there will be no contagion effect,鈥� it said. Controlling inflation remains a top priority for policymakers.
The BB has tightened the monetary policy stance, contributing to a sharp increase in the whole interest rate structure.
It refrained from printing new money to finance the fiscal deficit and undertook credible measures to cut significantly the fiscal deficit and domestic borrowing requirements for budget financing.
鈥榃e hope that Moody鈥檚 will soon undertake a more comprehensive assessment of Bangladesh economy after visiting Bangladesh and get first-hand experience by consulting with the relevant stakeholders and experienced economic observers,鈥� the BB said in the statement.
