Bangladesh Bank (BB) Governor Abdur Rouf Talukder on Sunday said that the recent downgrading of the country’s banking system by the US-based global credit rating agency Moody’s Investors Service happened because of geopolitical factors.
“I believe that Moody’s downgrade of Bangladesh has more to do with geopolitical factors rather than purely economic considerations of the country,” he said.
He made the observation while responding to questions from journalists during the announcement of the Monetary Policy Statement for the first half of FY2023-24 at the central bank headquarters in Dhaka.
Talukder said he does not think Moody’s downgrade will impact foreign direct investment or remittance inflows to Bangladesh.
He said that those who are involved in investing or sending remittances to Bangladesh are well aware of the country’s economic background and they will continue to do it.
The BB governor also mentioned that the downgrade of the banking system does not hold much significance for the country as the current state of Bangladesh’s economy is significantly better than it was in 2010.
Moody’s did not revise its rating of Bangladesh since 2012 — when the foreign exchange reserves were at $10 billion and Moody’s first rated the country — even though the country has seen significant economic growth, including an increase in per capita income and foreign reserves exceeding $48 billion, over the decades, he added.
Earlier, Moody’s revised the outlook on Bangladesh’s banking system from stable to negative in a report published on March 1. It also downgraded Bangladesh’s sovereign rating by one notch to B1 from Ba3.
It was the first time the country’s rating has been downgraded since the agency started rating Bangladesh.
On May 31, Moody’s also downgraded the ratings of six local banks — BRAC Bank, City Bank, Dutch-Bangla Bank Limited, Eastern Bank, NCC Bank, and Premier Bank.
