Dr. Fakhruddin Ahmed, son of Dr. Mohiuddin Ahmed, took the oath of office as Chief Adviser of the Caretaker Government of the People's Republic of Bangladesh on 12th January 2007. Prior to this appointment, he worked as Chairman of Palli Karma-Sahayak Foundation (PKSF) from June 2005 to January 2007. PKSF is the largest apex fund for micro credit in the world, currently providing financial and institution-building assistance to over two hundred micro-finance institutions. From October 2001 to April 2005, Dr. Ahmed served as Governor of the Bangladesh Bank.
While he was Governor, Dr. Ahmed introduced wide-ranging reforms in the conduct of monetary and exchange rate policy, in the development of new financial markets (bond market) and financial instruments (securitization), and in the operation of the financial system. The financial sector reforms included stronger corporate governance measures at the board level and also on internal policies, processes and structures within the banking industry and for non-bank financial institutions. Other significant reforms undertaken during his tenure included strengthening the capacity of the Bangladesh Bank. Dr. Ahmed’s major achievements included : (i) floating the exchange rate with minimal volatility, (ii) introducing interest rate flexibility and bringing down the interest rate substantially, which in turn contributed to a significant increase in industrial investment, (iii) introducing major corporate governance measures for the first time in the Bangladeshi corporate sector, and (iv) making the Bangladesh Bank an effective regulator and enforcer. The reforms implemented during Dr. Ahmed’s tenure contributed to macroeconomic and financial sector growth and stability in a major way.
Previously, Dr. Ahmed served for over twenty years at the World Bank, where his work focused on macroeconomic issues as well as on other sectoral and policy issues related to development. During his years at the World Bank, he worked across a number of countries in South Asia, East Asia and Africa.
Prior to joining the World Bank, he served for fifteen years in the erstwhile Civil Service of Pakistan and in the Government of Bangladesh, lastly as Joint Secretary, Economic Relations Division, Ministry of Finance. Dr. Ahmed began his professional career as a Lecturer in Economics at Dhaka University.
Dr. Ahmed obtained the first position in his class (first class first) in both BA (Hons.) and MA in Economics from Dhaka University. He subsequently received another MA in Development Economics from Williams College, USA, and a PhD in Economics from Princeton University, while on leave from his civil service appointment.
On 12 January 2007, President Iajuddin Ahmed swore him in as Chief Adviser to the Interim Caretaker Government. He is respected on both sides of the sharp political divide in Bangladesh and is credited with bringing an end to the anarchy that had threatened to sweep the troubled nation. For a country widely perceived as one of the world's most corrupt, the most dramatic aspect of Ahmed's rule is his antigraft campaign against the establishment. So far, more than 160 senior politicians, top civil servants and security officials have been arrested on suspicion of graft and other economic crimes. The roundup has netted former ministers from the two main political parties, including former prime ministers Sheikh Hasina and Khaleda Zia.
Ahmed fainted while giving a speech at a tree-planting event on June 3, 2007, apparently due to the heat, and was hospitalized. He was released from the hospital later on the same day and said that he was well on June 4, 2007.