REJAUL KARIM BYRON and AHSAN HABIB

The interim government has an uphill task of fixing the economy it inherited from the Awami League government of 15 years, said Finance Adviser Salehuddin Ahmed.

“When the interim government assumed power, it inherited a problem-driven economy -- the situation was more dire than people thought,” he told The Daily Star in an interview on Monday.

There were external problems, but the underlying domestic issues were even more acute: the foreign exchange reserves were depleting rapidly, inflation was stubbornly high and the balance of payments was negative.

“Even though we are not in the situation where we want to be, things are improving.”

The new government inherited another big problem: outstanding letters of credit dues of upwards of $4.5 billion.

“Without touching the foreign exchange reserves, the new government repaid it, and the outstanding amount dropped to $400–500 million.”

The foreign reserves are stable now, said Ahmed, also a former governor of Bangladesh Bank.

The interim government has adopted a three-pronged approach to steadying the ship: raising the buffer stock of food, ensuring steady He

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