Bangladesh Krishi Bank (BKB) has launched a Shariah-styled interest-free fixed deposit scheme aimed at citizens who do not wish to earn interest on their savings.

In a circular issued on 29 January, the state-owned specialised bank instructed all branch managers to start offering account opening for the scheme from 1 February, allowing any Bangladeshi citizen aged 18 or above to open such an account.

Speaking to The Business Standard, BKB Deputy Managing Director Md Khaleduzzaman said the bank's board approved the scheme after considering demand from pious citizens across the country.

Under the scheme, depositors will not receive any interest. As a result, all government and bank charges, including excise duty, will not be borne by the account holders. Instead, the bank will pay those charges on their behalf.

Depositors maintaining a specified balance will also be eligible for a debit card.

According to the circular, Bangladesh is a country with a large number of religious citizens who are interested in saving their hard-earned money for future security but do not wish to accept bank interest.

The bank believes there is strong potential to mobilise interest-free deposits from such customers.

The circular said the initiative was taken to attract interest-free and low-interest deposits and to strengthen the bank's deposit base. Approval for the account was given at the bank's 887th board meeting held on 15 October last year.

Account conditions

However, the "Krishi Bank Interest-Free Fixed Deposit Scheme" has several conditions. A minimum deposit of Tk25,000 is required, while there is no upper limit. The tenure ranges from one month to three years or longer.

According to the bank, government excise duty will be deducted every December as per rules, but the deducted amount will be automatically reimbursed by the branch within two days.

As the account is interest-free, no tax at source will be deducted.

The bank will not charge any account maintenance fees. Charges for account closure, statements and SMS services will also be waived.

In addition to individuals, mosques, temples, pagodas, churches, graveyards, madrasas, religious institutions, clubs, associations and similar organisations will be able to open the account.

Krishi Bank way too short of CMSME lending target

But, the account will be cheque-free, meaning no cheque books will be issued. Customers will receive a deposit receipt at the time of opening the account.

The account cannot be transferred from one branch to another, and no loans will be provided against it.

How it compares with other banks

Such interest-free deposit accounts are usually offered by Islamic Shariah-based banks under the Al-Wadiah system. Conventional banks with Islamic windows also offer similar products.

However, no other state-owned commercial or specialised bank currently offers a dedicated interest-free fixed deposit account. Customers at Sonali, Janata, Rupali and Agrani banks can open savings accounts by declaring in writing that they will not accept interest.

Current accounts at these banks do not offer interest either, and the same applies to most private banks. But, customers usually have to pay various service charges and maintenance fees, depending on the bank.

Currently, Rajshahi Krishi Unnayan Bank offers an interest-free savings account.

Among private banks, City Bank, AB Bank, Trust Bank, Standard Chartered Bank, Eastern Bank, United Commercial Bank and Dutch-Bangla Bank provide interest-free services through their Islamic windows or wings.

The Dhaka Stock Exchange (DSE) has downgraded Agricultural Marketing Company Limited (AMCL), widely known as PRAN, to the "Z" category, despite the company's claim that it disbursed its entire declared dividend within the stipulated timeframe, sparking confusion among investors.

According to a DSE notification, PRAN was moved from the "A" category to the "Z" category with effect from tomorrow (5 February), citing failure to comply with dividend disbursement rules set by the Bangladesh Securities and Exchange Commission (BSEC).

Under a BSEC directive, any listed company that fails to distribute at least 80% of its approved dividend within the prescribed period is subject to downgrading.

PRAN, however, strongly challenged the decision, arguing that the downgrade stemmed from a misunderstanding rather than any violation of regulatory requirements.

Touhiduzzaman, deputy general manager at Pran-RFL Group, told The Business Standard that the company had fully disbursed the dividend declared for the 2024-25 fiscal year in line with existing rules and long-standing market practices.

He explained that as an oldest company, around 23% of PRAN's shares are still paper-based, while the remaining 77% have been converted into electronic form.

"Dividends for electronic shareholders were paid through the banking channel, while dividends for paper-based shareholders were disbursed through bank cheques, a method the company has followed for years," he said.

According to Touhiduzzaman, also head of public relations at the group, the DSE, while assessing compliance, considered only dividends paid to electronic shareholders—77% of the total—and concluded that PRAN failed to meet the BSEC's 80% requirement, resulting in the downgrade.

He said the company later engaged with the relevant DSE officials and clarified that dividend payments to paper-based shareholders should also be factored into the calculation, as they form a legitimate component of the total disbursement.

"After reviewing the disbursement process, the DSE officials agreed that there had been a misunderstanding," he said.

Touhiduzzaman added that the issue has been resolved through discussions, and the DSE has assured the company that the categorisation will be corrected in the coming working days.

RAK Ceramics (Bangladesh) Limited has reported a loss of Tk39.59 crore for 2025, even as its revenue grew by 10.56%, mainly due to higher manufacturing costs, prolonged disruption in gas supply until June, and rising finance expenses.

According to its price-sensitive information (PSI) filed with the Dhaka Stock Exchange (DSE), the multinational ceramic manufacturer's sales rose to Tk737.33 crore in 2025 from the previous year, driven largely by increased production following uninterrupted LNG supply from July onward, which helped boost market sales.

Despite the revenue growth, the company's gross profit margin declined sharply to 13.19% from 17.19% a year earlier.

RAK Ceramics attributed the margin erosion to increased throughput costs, unabsorbed fixed costs incurred during the gas supply disruption up to June 2025, higher finance expenses arising from additional working capital borrowings, and increased provisions and write-offs of aged inventory.

With the latest loss, the company has posted back-to-back losses for the second consecutive year. In 2024, RAK Ceramics incurred a loss of Tk2.73 crore, although it also paid a 10% cash dividend that year.

Despite the widening losses, the board of directors has unanimously recommended a 10% cash dividend for general shareholders for 2025, amounting to Tk11.95 crore.

According to DSE data, sponsor-directors hold a majority 72.08% stake in the company and will not be entitled to the recommended dividend. The remaining 27.92% shares held by institutional investors, foreign investors, and general shareholders will receive the dividend payout.

The company also reported improvements in its operating performance, citing better trade receivable collections supported by a strengthened credit control framework, as well as successful renegotiation and extension of payment terms with vendors.

As a result, net operating cash flow per share rose significantly to Tk1 at the end of 2025, from Tk0.49 a year earlier.

RAK Ceramics has scheduled its annual general meeting (AGM) for 31 March through a digital platform. The record date for determining dividend entitlement has been set for 25 February.

Representatives of multinational companies have voiced concern over Bangladesh's inconsistent tax policy and high rates, saying unpredictability is creating challenges for investment.

"Over the last three years, our tax rate has increased… It's hard to predict what the tax rate will be next year," said Ahmet Zahit Erdem, head of finance at Coca-Cola Bangladesh Beverage Limited, at a seminar today (3 February).

"Our tax rate is very high," he added.

The seminar titled "Review of Revenue Performance in Bangladesh: With Special Focus on Supplementary Duty and Excise", was organised by the Policy Research Institute (PRI).

Entrepreneurs from the tobacco sector echoed these concerns, noting that combined taxes on tobacco products currently stand at around 83%, an extremely high level, they said.

They recommended replacing the existing ad-valorem tax system with a specific tax system, citing the importance of predictability for industry stability and warning that excessive taxation may encourage illegal trade.

In recent budgets, beverage sector entrepreneurs have faced successive tax increases. The minimum tax on beverage products rose from 0.5% to 3% in FY23, followed by increases in supplementary duty and customs duty on imported raw materials in subsequent budgets. These changes have left investors apprehensive about potential new tax hikes.

Participating in the seminar, National Board of Revenue (NBR) Member Syed Mushfequr Rahman highlighted discrepancies between companies' financial statements and their tax and VAT payments.

"Many companies pay tax based on financial statements, but their VAT payments are much lower than expected," he said, noting that this points to governance challenges.

The NBR official also defended the government's reliance on supplementary duty, which accounts for 30% of VAT revenue and 60% of import revenue.

"We can't eliminate it overnight," he said.

Chairing the seminar, Dr Zaidi Sattar, chairman of PRI, called for reducing supplementary duty rates, particularly at the import stage, noting that duties on 1,700 tariff lines are significantly higher at import than at the local level – contradicting WTO principles.

"Once Bangladesh graduates from LDC status, maintaining such high import-stage duties will no longer be feasible," he added.

The keynote paper was presented by PRI Research Director Bazlul Haque Khondker.

Other speakers included PRI Executive Director Khurshid Alam, NBR First Secretary Md Moshiur Rahman, and Abu Zahid Parag, senior manager of Fiscal Affairs at British American Tobacco Bangladesh. Hafiz Choudhury, principal of The M Group Inc., spoke virtually.

The National Board of Revenue (NBR) has started publishing HS code-wise import data on its website to enhance transparency and improve public access to trade-related information.

The initiative follows long-standing demands from young entrepreneurs, students, investors, trade researchers, businesspeople and journalists for easier access to reliable import data, according to a press release.

By making the data publicly available, the revenue authority aims to support data-driven analysis, informed decision-making and research across the trade and investment ecosystem.

The NBR said HS code-based import information covering both commercial imports and imports under bonded warehouse facilities has been uploaded to the customs section of the publication portal on its official website.

The latest dataset, released last week, contains import information for December 2025.

The published data provide detailed product-wise information in line with HS code classifications, including quantity, weight and declared value, allowing users to analyse import patterns at a granular level and track movements over time.

Officials said the move will make import-related information more accessible, open and transparent, while significantly expanding opportunities for the use of credible data by entrepreneurs, academics, analysts, journalists and policymakers.

The availability of HS code-wise data is also expected to help stakeholders gain clearer insights into international market prices and price fluctuations, as well as analyse import trends, seasonal variations and product movement dynamics.

Besides, the data will facilitate assessments of the country's trade structure, import dependency and the flow of industrial raw materials under bonded facilities, and support evaluations of the effectiveness of incentives for export-oriented industries.

Bangladesh’s external debt has nearly doubled in just over three years, driven by a surge in emergency budget financing in the post-Covid period and a sharp devaluation of the local currency that inflated the value of dollar-denominated obligations.

The country’s total external debt jumped 92 percent to Tk 9.51 lakh crore by the end of September 2025, compared with June 2022 levels, according to a debt bulletin published Tuesday by the Ministry of Finance.

The sharp increase reflects Bangladesh’s growing reliance on quick-disbursing budget support loans rather than traditional project financing, amid weak revenue collection and widening fiscal deficits.

Between fiscal years 2021-2022 (FY22) and 2024-2025 (FY25), Bangladesh received $9.82 billion in budget support, with $3.44 billion coming last fiscal year alone.

Budget support loans, which are disbursed immediately upon approval and come with policy conditions, rose 69 percent year-on-year in FY25, even as project loans fell more than 29 percent.

The shift reflects the government’s need for funds that can be deployed immediately to cover budget operations amid weak revenue collection. Unlike project loans, which are disbursed gradually and tied to specific infrastructure works, budget support can be used directly for deficit financing.

The interim government has continued prioritising budget support over project loans, maintaining the pattern established by the previous administration.

Currency devaluation has compounded the debt burden. The local currency has weakened to around Tk 122 per dollar from Tk 85 several years ago, thanks to heightened imports in the post-Covid period and commodity price surge in global markets, among other factors.

The government’s total debt rose 1 percent to Tk 21.49 lakh crore in the first quarter of the current fiscal year, pushing the debt-to-GDP ratio up roughly two percentage points to 38.61 percent.

Of the total debt stock, Tk 11.97 lakh crore is domestic borrowing, while the remainder consists of external obligations.

The growing debt load is straining government finances. Interest payments surged 27 percent year-on-year to Tk 31,629 crore during the July-September period in FY26.

Of this, domestic interest payments rose 19 percent, while interest on external borrowings rose 80 percent. Among domestic elements, payment for treasury securities rose by 21 percent and national savings certificates by 16 percent.

Gold prices bounced back to hover near $5,100 on Wednesday, underpinned by safe-haven demand as renewed US-Iran geopolitical tensions added to bullion’s appeal a day after it posted its best day in more than 17 years.

Spot gold was up 2.9 percent at $5,082.94 per ounce, as of 0813 GMT, after surging nearly 6 percent on Tuesday, its biggest daily gain since November 2008. Bullion scaled a record high of $5,594.82 last Thursday.

US gold futures for April delivery climbed 3.4 percent to $5,103.50 per ounce.

The US military on Tuesday shot down an Iranian drone that “aggressively” approached the Abraham Lincoln aircraft carrier in the Arabian Sea, the US military said.

Gold is bouncing back from a low of $4,403.24 touched on Monday after its biggest two-day sell-off in decades.

“After such a sharp rally, a correction was expected, it was not surprising and with gold coming back up, the fundamentals have not changed much,” ANZ analyst Soni Kumari said, adding that the geopolitical and economic backdrop remained mostly unchanged.

Goldman Sachs said on Wednesday that it saw significant upside risk to its $5,400 year-end forecast for gold on central banks maintaining their recent pace of accumulation alongside private investors stepping up gold ETF purchases.

“Going ahead ... we are expecting the same $5,600 levels (for gold) by the end of the first half or April-end while prices will continue to rise thereafter and our year-end target is $6,000/oz,” said Jigar Trivedi, a senior research analyst at IndusInd Securities.

Spot silver rose 6.1 percent to $90.34 an ounce. It touched a record high of $121.64 on Thursday but fell to a month-low at $71.33 on Monday having registered a record single-session price wipe-out of 27 percent on Friday.

Markets now await ADP private payroll data for more cues on the Federal Reserve’s policy path even as a partial US government shutdown has delayed the closely watched employment report for January.

Bangladesh is destined to face break-neck competition both in US and EU markets with India emerging as a major competitor with double advantages of Washington-proposed tariff cutback and trade deal with the 27-nation European bloc.

Industry insiders and experts sound the alarm over the headwinds about to blow from the two destinations Bangladesh heavily bank on for its readymade garment export -- the nation's main export earner -- and urge government action.

The recent announcement of lowering tariffs on Indian-made goods may be subject to as low as 18-percent tariffs, knocked down from the earlier-imposed 50 per cent. The brusque move from Washington came a week after the announcement of the trade deal between India and European Union.

Bangladesh should immediately act to retain duty -free market access to the European Union and enhance its competitiveness by removing supply-side constraints, industry leaders urge.

A slew of must-dos they list to overcome possible impact of the trade deal between the EU and India: coordinated reforms across trade policy, energy pricing and reliability, logistics and ports, access to finance, skills development and regulatory capacity building.

They also stress both product diversification, mostly by way of producing manmade fibre- based garments, and market diversification through exploring potential non-traditional markets.

Local garment exporters will face cutthroat competition and increased price pressure on the EU market after the free-trade agreement (FTA) announced recently between the EU and India comes into effect, possibly in 2027, as it would grant the neighbouring country's garment makers access to the bloc sans duty on apparel exports, they note.

On the other hand, Bangladesh's current duty-free market access there under EBA (everything but arms) scheme is scheduled to end in 2029 as the county is set to graduate from LDC status this coming November 2026 with a three-year transition period.

Though Bangladesh can apply for GSP- plus facility, its garment products would not get duty-free market access there due to safeguard clauses and are likely to face about 12-percent duty, they said, adding that by this time, another competitor - Vietnam -- would also get duty-free market access.

Talking to The Financial Express, Md Shehab Udduza Chowdhury, vice president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said India would be in an advantageous position with reduced rate of 18-percent tariffs compared to 20 per cent for Bangladesh.

On the other hand, the trade deal between the EU and India will be 'dangerous' for them, he said, apprehending a possible threat of losing market share there.

"The impact of the deal would be severe for us. Bangladesh is currently facing tough competition on the EU market as India and China are enhancing their focus there to offset US high-tariff impacts," says Faruque Hassan, managing director of Giant Group.

Bangladesh will become less competitive on the EU market once India secures duty-free access there, he warns.

The first and foremost tasks must be to sustain the duty-free market access there, the apparel maker-exporter told the FE, adding that the government also should initiate move to sign FTA to have an even footing on the largest market as a bloc.

Meantime, Chief Adviser of the interim government Prof Muhammad Yunus Sunday directed opening free-trade agreement (FTA) negotiations with the EU forthwith to safeguard Bangladesh's trade preferences on its largest export market.

MA Razzaque, chairman of Research and Policy Integration for Development (RAPID), says the US tariff reduction for India might not immediately affect the local garment shipment over there as Indian competitive advantage would not change because it is in disadvantage due to existing higher tariffs.

"But Bangladesh will face tremendous pressure in the medium term of three to five years as the EU-India trade deal would bring extreme challenges," he told the FE, explaining India with its backward linkages, including cotton to yarn and fabrics, will be a major competitor for Bangladesh which has to depend on imported raw materials.

Besides, there are no supply-side constraints for other major garment-producing countries like India, Vietnam, Indonesia, Cambodia and Pakistan as Bangladesh face, he adds.

The country has to immediately take measures to remove the supply-side constraints like gas and energy shortages, provide supports to the exporters to be ESG-compliant, develop skilled workforce, and reduce electricity and utility costs, ensure special bank interest rate and simultaneously attract foreign direct investment in RMG sector to boost MMF production.

"To ensure global work orders, FDI is a must for RMG and also for overall export diversification," he notes.

Local exporters will also face price pressure as India would be more competitive, says MA Rahim, vice chairman of DBL Group.

The entrepreneur, however, thinks the EU-India deal would not impact Bangladesh's export immediately, but it would affect gradually.

"India will be a strong future competitor for Bangladesh as the neighbouring country has its own raw materials, including cotton, yarn and fabrics, low labour cost while government facilitates the sector with a number of packages to increase competitiveness," Fazlul Hoque, managing director of Plummy Fashions, points out to underscore the urgency of counterbalancing actions.

Besides, India will jump into the market with better market access also to offset the high tariffs imposed by US administration, he notes.

Echoing Hassan's anxiety, Hoque, who ships up to 80 per cent of his total exports to the EU, says they immediately need government support to reduce cost of production and cost of fund, ensure uninterrupted gas supply and other issues that have been eating up competitiveness.

Hoque voices a consequential note: If Bangladesh fails to secure the duty-free market access under GSP-plus or a bilateral free-trade deal after LDC graduation, it will be out of the market.

The industry also needs to diversify its markets and products and produce manmade-fibre garments, exporters suggest.

They have also demanded incentives for attracting both local and foreign investment into man-made fibre or MMF wears to sustain export growth.

In the last fiscal year of 2024-25, the European Union accounted for more than 50 per cent, coming to US$19.71 billion, of Bangladesh's total garment exports worth over 48 billion US dollars.

Oil prices extended gains on Wednesday after the US shot down an Iranian drone and armed Iranian boats approached a US-flagged vessel in the Strait of Hormuz, rekindling fears of an escalation in tensions between Washington and Tehran.

Brent crude futures were up 15 cents, or 0.2 percent, at $67.48 per barrel at 0730 GMT. US West Texas Intermediate crude was up 28 cents, or 0.4 percent, at $63.49 per barrel.

Both benchmarks rose nearly 2 percent on Tuesday as the military incidents increased fears that a conflict could disrupt oil flows through the Strait of Hormuz or output from Iran.

“Uncertainty about how these talks will play out means the market will likely continue to price in some risk premium,” said ING commodity strategists on Wednesday.

The US military on Tuesday shot down an Iranian drone that “aggressively” approached the Abraham Lincoln aircraft carrier in the Arabian Sea, the US military said, in an incident first reported by Reuters.

Separately, in the Strait of Hormuz between the Persian Gulf and the Gulf of Oman, a group of Iranian gunboats approached a US-flagged tanker north of Oman, maritime sources and a security consultancy said on Tuesday.

OPEC members Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq export most of their crude via the Strait of Hormuz, mainly to Asia. Iran was the third-biggest OPEC crude producer in 2025, according to US Energy Information Administration data.

Meanwhile, Tehran is demanding that talks with the US this week be held in Oman not Turkey, and that the scope be narrowed to two-way negotiations on nuclear issues only, casting doubt on whether the meeting will proceed as planned.

“Heightened tensions in the Middle East provided support to the oil market,” said Satoru Yoshida, a commodity analyst with Rakuten Securities.

Oil prices also found support from industry data showing a sharp drop in US crude stockpiles. Inventories in the top producing and consuming nation fell over 11 million barrels last week, sources said, citing American Petroleum Institute figures.

Official data from the US Energy Information Administration is due on Wednesday at 10:30 a.m. EST (1530 GMT). Analysts polled by Reuters were expecting a rise in crude inventories.

On Tuesday, oil prices were also buoyed by a trade agreement between the US and India that raised hopes of stronger global energy demand, while continued Russian attacks on Ukraine added to concerns that Moscow’s oil would remain sanctioned for longer.

“India’s trade agreement with the US to halt purchases of Russian crude, along with the ongoing Russia-Ukraine war, is also providing support,” Yoshida said, projecting that WTI would likely continue to trade around $65 a barrel for now.

Norway's sovereign wealth fund (SWF), the world's largest investment fund, has reduced its exposure to Bangladesh's capital market by 17% in 2025, continuing a gradual pullback that has been underway for several years amid economic and market uncertainties.

According to disclosures by Norges Bank Investment Management, the fund has also exited several prominent listed companies, including Beximco Pharmaceuticals, Walton, MJL Bangladesh, Renata, Olympic Industries and Singer Bangladesh.

Data shows the fund's total investment in Bangladesh fell to $117.12 million in 2025, down from $141.93 million in 2024. This marks a steady decline from a peak of $248.35 million in 2020. Over the past six years, the fund's exposure has tapered off consistently, reflecting caution toward the local equity market despite Bangladesh's long-term growth potential.

Although overall holdings have declined, Norway's SWF continues to retain stakes in a select group of major companies. Its largest investment remains in BRAC Bank, with a 4.42% stake valued at $45.45 million.

Other key holdings include Square Pharmaceuticals (1.93%, $27.81 million), Grameenphone (0.71%, $20.35 million), City Bank (3.55%, $10.73 million), Prime Bank (3%, $8.16 million) and Marico Bangladesh (0.67%, $4.59 million). Ownership levels in most of these companies, however, declined compared to 2024, indicating partial sell-offs rather than new investments.

Market analysts say the reduction in exposure is driven less by company-specific weaknesses and more by macroeconomic and structural challenges.

A senior analyst at Brummer & Partners Bangladesh, speaking on condition of anonymity, said the slowdown in investments since 2020 stems from multiple factors, including the Covid-19 pandemic, the prolonged floor price mechanism in the stock market, taxation concerns, foreign exchange volatility, and heightened economic and political uncertainty.

"The fund usually invests in equities for the long term, but depending on business outlook and risk assessment, it withdraws or reduces exposure from time to time," the analyst said, adding that investments could rise again if macroeconomic indicators show sustained improvement.

The analyst noted that Norway's SWF continues to hold shares in fundamentally strong and well-governed companies such as BRAC Bank, City Bank, Grameenphone and Square Pharmaceuticals, reflecting its long-term investment philosophy and preference for market leaders with relatively stable earnings prospects.

Salim Afzal Shawon, head of research at BRAC EPL Stock Brokerage, said 2025 saw a broader trend of foreign portfolio investors trimming holdings in Bangladesh. "Many foreign investors chose to liquidate or partially exit positions as foreign exchange conditions eased, allowing smoother repatriation of funds," he said.

Shawon added that growing caution ahead of the upcoming national election prompted investors to limit exposure until there is greater clarity on political stability and policy direction. "If the political transition brings confidence and predictability, foreign investors are likely to return. Bangladesh still offers attractive long-term opportunities given its large domestic market and growth-oriented industries," he said.

Norway's sovereign wealth fund began investing in Bangladesh in 2015 and has since become the country's largest foreign portfolio investor, with cumulative investments estimated at around Tk1,800 crore. Globally, the fund manages assets worth approximately $2.11 trillion across 68 countries.

Chattogram Port has been shut since Tuesday after workers, who observed an eight-hour work abstention for three days from Saturday morning, launched an open-ended strike protesting the proposed lease of the New Mooring Container Terminal (NCT) to Dubai-based DP World.

The closure has halted cargo handling at the country's largest seaport, intensifying supply chain disruptions and pressure on exporters and importers.

As of Wednesday (4 February), more than 140 vessels were waiting at the outer anchorage. Gantry cranes, tugboats, and pilotage services remained idle despite vacant berths. Port officials confirmed that not a single container has been handled since the strike began at the facility, which typically processes 8,000-9,000 TEUs daily.

The situation turned critical after a five-hour meeting between labour leaders and business representatives failed to produce a breakthrough yesterday. Economists warn that a prolonged standoff could trigger national shortages and push up consumer prices ahead of Ramadan.

We don't know what exactly is happening at Chattogram Port. Management should take locals and stakeholders into confidence.
Mohammad Abdur Razzaque | Chairman, RAPID

The disruption is rippling through Bangladesh's supply chain ahead of Ramadan, with perishable imports such as fruits, dates and edible oil stranded at the port and exporters warning of missed shipment deadlines, rising costs and potential order cancellations.

Economists and business leaders have told TBS that a prolonged standoff over the NCT lease could trigger shortages, push up consumer prices and inflict lasting damage on trade and buyer confidence.

Meanwhile, the Public Private Partnership Authority and the Chattogram Port Authority (CPA) have allegedly continued negotiations with DP World to finalise the agreement ahead of the election, even after the Supreme Court accepted an appeal against the High Court verdict that had cleared the legal barrier to the deal.

Workers said the government's insistence on pushing forward with the agreement, despite the pending appeal, has reinforced their resolve to continue the strike.

If the strike continues further, we'll be in a serious challenge, such as missing the lead time and order as well.
MA Jabbar | Managing director, DBL Group

"We don't know what exactly is happening at Chattogram Port. Management should take locals and stakeholders into confidence," said Mohammad Abdur Razzaque, economist and chairman of Research and Policy Integration for Development (RAPID). "It can't be done in isolation."

Meanwhile, Shipping Adviser Brig Gen (retd) M Sakhawat Hussain yesterday warned of tough action if any lighter ship fails to unload goods within three days of reaching the wharf.

In an inter-ministerial meeting in the capital to resolve various crises involving lighter ships engaged in transporting goods from mother vessels, he also directed the commerce ministry to publish the list in the media and cancel the licences of the responsible individuals or organisations.

Fresh fruit, dates stuck ahead of Ramadan

The impact is already being felt in the perishable goods segment. The Fresh Fruit Importers Association said more than 200 TEUs of fresh fruit containers and around 300 TEUs loaded with dates have remained stuck at the port.

Importers are now paying Tk10,000 to Tk15,000 in demurrage per container, a cost they say will inevitably be passed on to consumers.

Touhidul Alam, general secretary of the association, said that fruit imports are aligned closely with market demand. "Over the last five days of strikes, only a handful of containers have been released. If the situation continues, shortages will emerge in the market very soon," he said.

"Prices of fruits and dates will also rise," he added.

Vehicles stranded, depots clogged

Cargo delivery has remained suspended for more than 36 hours, leaving thousands of heavy vehicles stranded inside and outside the port area. To prevent further congestion, authorities have stopped allowing new vehicles to enter.

Container transportation from inland container depots has also been halted, causing a growing backlog of export cargo at depots.

Ruhul Amin Sikder, secretary general of the Bangladesh Inland Container Depots Association, said all container movement has stopped. "No trucks are leaving the port and no new containers are coming in," he said.

He noted that export cargo typically accounts for 2,500-2,800 containers a day, while imported cargo delivered to depots is gradually converted into empty containers. "So far, there is some balance in the system, and the pressure has not peaked yet," he said.

However, he warned that the situation could deteriorate rapidly if the stoppage continues. "Export volumes are rising, which means loaded export containers will increase. We can store far fewer loaded containers than empty ones," Sikder said.

He added that inland container depots have a total handling capacity of about 15,000 TEUs, with around 11,000 already in use. "If operations remain suspended for long, the system will hit its capacity limit and a serious crisis will emerge," he said.

Business leaders seek alternative to strike

The current shutdown follows three consecutive days of eight-hour work stoppages that began on Saturday. Workers launched a full 24-hour strike on Tuesday at 8am, which has since turned into an open-ended programme.

As disruptions deepened, leaders of the Bangladesh Garment Manufacturers and Exporters Association, the Bangladesh Knitwear Manufacturers and Exporters Association and other business organisations met labour leaders at a hotel in Agrabad yesterday afternoon.

Business leaders expressed solidarity with the workers' movement, calling it logical in the context of protecting the NCT. At the same time, they urged labour leaders to consider alternative forms of protest and withdraw the strike to avoid further economic damage.

Labour leaders responded that they were fighting to protect the port and warned that retreating now would embolden the CPA to take harsher action, risking the loss of a national asset. They called on business leaders to stand with the movement in what they described as the greater national interest.

Exporters, importers under mounting pressure

With a growing number of consumer goods containers stuck at the port, traders have warned of shortages and price hikes in the domestic market ahead of Ramadan.

Economists and business leaders cautioned that the standoff could spiral into an unprecedented crisis, with serious consequences for the national economy.

Abu Tayub, first vice-president of BGMEA, said hundreds of containers meant for export shipments are now stuck at inland container depots. He warned that missing shipment deadlines would force exporters to resort to air freight, which is far more expensive and would result in heavy financial losses.

"If the situation continues for a few more days, the RMG sector will be at serious risk of losing export orders and buyer confidence, which could ultimately jeopardise the entire industry," he said.

MA Jabbar, managing director of DBL Group, one of the top five garment exporters in Bangladesh, said if the strike continues further, we'll be in a serious challenge, such as missing the lead time and order as well.

Allegations, resistance and revenue debate

Leaders of the Chattogram Port Protection Movement Unity Council, which is coordinating the protests, claimed workers are participating spontaneously. They alleged that senior port officials have been confined at the Bangladesh Investment Development Authority office in Dhaka and pressured to sign the DP World contract.

They warned that the indefinite strike will continue unless the government withdraws what they termed an anti-national decision to lease out the terminal.

Former BGMEA vice-president MA Salam described the workers' movement as justified and urged dialogue to reach a solution that safeguards both national and consumer interests.

Humayun Kabir, coordinator of Bandar Rokkha Sangram Oikya Parishad, raised allegations of corruption involving senior officials and questioned the financial logic of handing over profitable terminals to foreign operators. He claimed similarly sized terminals run by the port generate significantly higher revenue than those leased out.

According to sources at the Public Private Partnership Authority, the NCT generates about $100 in gross revenue per TEU under CPA operation. After deducting $12.31 in variable operating costs and $41.32 in fixed administrative costs per TEU, net revenue stands at $46.37.

Under the proposed DP World model, the CPA is estimated to receive a revenue share of $42.50 per TEU. After accounting for unavoidable fixed administrative costs of $41.32 borne by the CPA, the authority would be left with a marginal surplus of just $1.18 per TEU.

When contacted for comment, CPA Director (Administration) and spokesperson Omar Faruk did not respond to calls.

Court bars contract signing amid legal battle

The controversy surrounding the NCT lease has also taken a legal turn. The Supreme Court on Tuesday accepted an appeal against a High Court ruling that had paved the way for the DP World deal, and referred the matter to a full bench. As part of that order, the court clarified that the government cannot sign the contract until the appeal is disposed of, creating a fresh legal hurdle for the proposed lease.

According to legal records, the dispute arises from challenges to the High Court's split verdict and questions over the legality of the process under the Public-Private Partnership Act and government-to-government policy. With the matter now sub judice, signing the contract remains legally barred until the appeal is resolved.

Booming exports are pushing up China's currency and while analysts think authorities will resist further gains, risks are to the upside and could test the country's fragile economy.

As the yuan exchange rate tiptoed toward and then passed the strong side of 7-per-dollar last year, foreign currency flows into Chinese banks hit a record $452 billion in December.

The amount converted to yuan also hit a record of $311 billion, figures from the State Administration of Foreign Exchange showed, with the flow sending the exchange rate to its strongest point since 2023 at 6.9378 per dollar yesterday (3 February).

Bank analysts think that is more or less enough and say a toolkit of semi-official yuan selling, restraining the trading band, persuasive arguments from authorities and tweaks to reserve ratios for the banking system can be rolled out to keep it from gaining further.

An average of 13 forecasts from global investment banks has the currency at 6.92 to the dollar by year's end, while market pricing points to around 6.8 in the derivatives market.

That sort of level is likely to frustrate the country's trading partners, where manufacturers are under pressure from Chinese rivals, and add more fuel to a boom in offshore yuan borrowing.

But out-of-consensus calls point to it rising further if exporters ramp up their yuan conversions, with Goldman Sachs this week raising its 12-month yuan forecast to 6.7 per dollar, about 3.5% firmer than Tuesday's trading level.

"The pace of appreciation has exceeded our expectations and that is even before the sharp move lower in the broad dollar," said Goldman analysts, who based their outlook on record flows and what they viewed as a shift in tone from the central bank.

The People's Bank of China manages the yuan by keeping it inside a band that is 2% on either side of a midpoint that it announces each trading day. It declined to comment on its stance on the currency or on analyst forecasts when contacted by Reuters.

Last month, central bank Deputy Governor Zou Lan said the yuan is expected to experience two-way fluctuations while maintaining flexibility.

Base Case

A stronger yuan erodes a competitive advantage for exporters, so analysts believe a runaway rally is unlikely. They point to state bank selling and signals from the PBOC's midpoint settings as evidence authorities will weigh in against gains.

"Given that China's economic growth is still highly dependent on exports, the People's Bank of China may not yet be willing to risk a more significant appreciation of the currency," said Wei He, an economist at Gavekal Dragonomics.

The PBOC midpoint has been weaker than market estimates since November and – traders say – state banks have been dollar buyers whenever the yuan has started to rise too sharply.

Analysts also expect authorities to adjust foreign exchange reserve requirements, since they could force banks to buy and hold more dollars and offset yuan buying.

"We see a high chance for the 20% risk reserve on banks' forward FX sale to be removed and expect FX reserve requirement ratio to be raised," said Janice Xue, a strategist at Bank of America Global Research.

China's 5% gross domestic product growth last year rested upon an export surge that delivered a record trade surplus of $1.2 trillion, up around 20% from a year earlier.

"Our base scenario remains a strong export performance, which could support the yuan," said Chaoping Zhu, global market strategist at J.P. Morgan Asset Management. "However, as foreign governments become more cautious (about) the impacts on their economies, uncertainties are rising for Chinese export growth."

"This might suggest a higher two-way volatility in the exchange rate," he said, which he thinks is likely to fluctuate in a range around 7-per-dollar. On a trade-weighted basis, the yuan is at the lower end of a range that it has kept since the pandemic, which provides support for exporters.

Upside Risks

Stability has also been the defining feature of the nine-month rally that has lifted the yuan nearly 6% against the dollar, which traders say is aimed at boosting the currency's appeal for investment, lending and reliability for settling trade.

That also holds momentum in check against the risk that a rising currency drives a positive feedback loop where buying from exporters sends it higher, encouraging more buying.

Ding, a Shanghai-based electrical industry exporter who only provided his surname, said his firm was already converting more dollars to yuan more quickly because of recent exchange rate moves.

To be sure, at 68.8%, the proportion of export receipts converted to yuan in December was on the rise, but it was not a record, and analysts believe authorities can manage even bigger flows.

"We expect the level of surplus to go beyond $1 trillion again in 2026," said Kelvin Lam, senior China+ economist at Pantheon Macroeconomics, who expects the exchange rate to be at 6.85 at the end of the year.

"Repatriation of the USD piled outside of China because of trading activity will continue to be a driving force to push (the yuan) to the stronger end, but the PBOC will make sure the appreciation (is) on a gradual, measured pace."

At the Singapore Airshow, exhibition halls are filled with aircraft models, simulated cockpits and interactive displays showcasing the latest advances in commercial aviation. Among them, one stand has drawn particular interest: Comac, China's state-owned aircraft manufacturer.

Comac has made notable progress since its C919 passenger jet flew to Singapore two years ago, marking its first journey outside China. Designed to rival Airbus's A320neo and Boeing's 737 MAX, the aircraft is increasingly being promoted to markets beyond China, reports the BBC.

For Comac, the Singapore Airshow offers an opportunity to present itself as a future challenger to the long-dominant Airbus-Boeing duopoly in the Asia-Pacific region - the world's fastest-growing aviation market - at a time when airlines are struggling with aircraft shortages, delivery delays and supply chain disruptions.

"I think over time Comac will become a global competitor, but it will take years," Willie Walsh, director general of the International Air Transport Association (IATA), told the BBC.

"In 10 or 15 years, we'll likely be talking about Boeing, Airbus and Comac together."

Industry analysts say the region urgently needs another aircraft manufacturer. Airlines across Asia-Pacific have been affected by delays at both Boeing and Airbus, compounded by engine shortages and broader supply chain constraints. Trade tensions and tariff uncertainties have added further pressure to manufacturers and airlines alike.

According to IATA data, airlines worldwide are waiting longer than ever for new aircraft, pushing up the average age of fleets and increasing costs, as older planes burn more fuel. Walsh said Asia-Pacific airlines could achieve double-digit growth in 2026 if enough aircraft were available. "The waiting time between ordering a plane and receiving it is now around seven years, which is incredibly frustrating," he said.

This situation has helped position Comac as an alternative option. More than 150 Comac aircraft are currently in service within China, while its planes are also flying in Laos, Indonesia and Vietnam. Brunei's GallopAir has placed a significant order, and Cambodia has indicated plans to acquire around 20 aircraft.

"We need more suppliers," said Subhas Menon, director general of the Association of Asia Pacific Airlines (AAPA). "This industry operates as an oligopoly, and at times almost a duopoly. Comac's entry is long overdue and very welcome."

Strong backing from the Chinese government and comparatively lower prices could make Comac aircraft attractive, particularly to low-cost carriers in developing markets.

Mike Szucs, chief executive of Philippines-based budget airline Cebu Pacific, told the BBC that while Comac is not yet an immediate option, it could become one in the next decade. "Once certification hurdles are cleared in the 2030s, it could be a compelling choice for us and other airlines," he said.

Beyond Asia-Pacific, Comac is also pursuing European certification, with regulators already conducting test flights of the C919. Approval would allow the company to sell aircraft to European airlines, though officials say certification could take until 2028 or even the early 2030s.

Significant challenges remain, including integrating Chinese and Western components, developing global maintenance and repair networks, and establishing pilot training systems—areas where Airbus and Boeing benefit from decades of experience.

Comac also faces competition in the region from Brazil's Embraer, which has secured orders from carriers such as Scoot, Virgin Australia and Japan's ANA.

Meanwhile, Airbus and Boeing continue to dominate the region and maintain a strong presence at the Singapore Airshow. Both manufacturers have signalled that delivery delays, which have plagued airlines in recent years, may soon begin to ease.

Despite Comac's claim of more than 1,000 orders for the C919 from Chinese airlines, only around a dozen aircraft have been delivered so far. Verifying these figures is difficult, as Comac is state-owned and not publicly listed.

Unless Comac can overcome certification, infrastructure and delivery challenges, analysts say Airbus and Boeing are likely to retain control of Asia-Pacific skies for the foreseeable future, the BBC reports.

The United States will host more than 50 countries on Wednesday (4 February) for talks aimed at boosting their access to critical minerals, in a bid to loosen China's grip over vital industrial inputs that has allowed it to control global supply chains.

The gathering comes after President Donald Trump on Monday launched a strategic stockpile of critical minerals, called Project Vault, backed by $10 billion in seed funding from the US Export-Import Bank and $2 billion in private funding.

China has wielded its chokehold on the processing of many minerals as geo-economic leverage, at times curbing exports and suppressing prices and undercutting other countries' ability to diversify sources of the materials used to make semiconductors, electric vehicles and advanced weapons.

South Korea, India, Thailand, Japan, Germany, Australia, and the Democratic Republic of Congo are among countries attending the Washington meeting, though the US has not released a full list.

Beijing's expanded export controls on rare earths last year caused production delays and shutdowns for auto manufacturers in Europe and the US, and a China-generated glut of lithium has stalled plans to expand production in the US.

Such dependencies have unnerved Washington and its partners, which nonetheless have struggled for years to implement policies to stand up durable domestic mining and processing alternatives for lithium, nickel, rare earths and other critical minerals.

China's leverage was on full display in October when Trump agreed to trim tariffs on the country in exchange for Beijing's pledge to hold off on stricter restrictions on rare earths exports.

The talks underscore a broader US push to work with partners to counter China's dominance over critical minerals by coordinating policy tools at a time when Trump has angered allies with his sweeping "America First" tariff policies.

Washington and its partners are weighing measures that include aligning trade and investment incentives, encouraging new mining and processing capacity outside China, and exploring market interventions such as price floors, strategic stockpiles and export restrictions to reduce Beijing's leverage over supply chains vital to advanced manufacturing and national security.

"I think this is a recognition by the United States that it must act in concert with others to reduce its vulnerability in areas where China has supply dominance," said Scott Kennedy, who leads the Chinese business and economics program at the Center for Strategic and International Studies in Washington.

Incentives

US Secretary of the Interior Doug Burgum said on Tuesday that 11 more countries would be named to a critical minerals trade club this week, joining the US, Australia, Japan, South Korea, Saudi Arabia and Thailand. He said 20 more countries showed "strong interest" in joining the coalition.

US Secretary of State Marco Rubio and Vice President JD Vance will deliver remarks at the meeting of ministers from across Europe, Asia, Africa and Latin America, which according to the State Department, aims to "advance collective efforts to strengthen and diversify critical minerals supply chains."

"China has long played an important and constructive role in keeping the global industrial and supply chains of critical minerals safe and stable and is willing to continue to make active efforts in this regard," China's embassy in Washington told Reuters when asked about the meeting.

Industry experts say countries must find the right balance of incentives to boost investment in critical minerals production.

Those could include deploying newly created Section 232 tariffs in coordination with allies to establish industry-wide price floors for specific materials.

The Trump administration last year struck a price-floor agreement with rare earths producer MP Materials, but Reuters has reported the administration may now be moving away from company-specific deals in favour of a broader, international approach.

Washington's Group of Seven partners and the European Union have considered price floors to promote rare earth production, as well as taxes on some Chinese exports to incentivize investment.

Australia, which has been positioning itself as a critical minerals alternative to China, has also said it would establish a strategic reserve of minerals, expected to be ready by the second half of 2026.

Canberra is also considering setting a price floor to support local critical minerals projects.

"The reality is that none of us have tested these tools in this context. So, we're looking to see which will be most effective. Most likely it will be a bit of a menu of tools ... I don't think there's going to be a one silver bullet," one meeting participant told Reuters on condition of anonymity.

Stock markets mostly struggled on Tuesday while gold and silver prices rebounded in fresh volatile trading.

Oil prices rose while Wall Street indices retreated, shrugging off passage of legislation to end a four-day partial US government shutdown.

The price of gold climbed more than seven percent but later traded near $4,950 per ounce. Last week it reached a record-high close to $5,600 before tumbling.

Gold is "heading for its biggest daily gain since 2008, as prices rebounded sharply following the steepest two-day decline in decades," said analyst Axel Rudolph at trading platform IG.

Silver surged more than 15 percent to $86 on Tuesday, still well short of the record near $120 it hit last week.

"A sense of calm descended after the precious metal auctions, opening the door for investors to buy on the dip," noted Richard Hunter, head of markets at Interactive Investor.

Gold and silver prices have been on a tear in recent months, benefitting from being seen as a safe haven investments during times of geopolitical tensions.

Wall Street's main equity markets wobbled, with the Dow striking a fresh all-time high before turning lower.

The Nasdaq Composite finished down 1.4 percent after spending almost the entire session in negative territory.

"The rotation away from tech began at the beginning of the year and it's kind of building on itself here," said Briefing.com analyst Patrick O'Hare.

"The tech sector had such strong outperformance last year and for several years. There are so much good news that has been priced into the stocks that there's really like zero room for error."

US President Donald Trump signed into law a congressional spending bill to fund government agencies while buying more time for lawmakers to negotiate over spending for the administration's controversial immigration crackdown.

Negotiations had broken down following the killing of two US citizens by federal agents in Minneapolis, the Minnesota city which has become the flashpoint for the Republican president's policies.

In Europe, early gains failed to hold. Frankfurt and London ended the day lower while Paris finished flat.

The euro and the pound rose against the dollar ahead of interest-rate decisions due Thursday from the European Central Bank and Bank of England.

Investors were also keeping an eye on earnings from major companies this week, with particular attention on the tech sector and planned investment in artificial intelligence.

Shares in Palantir, a data and analytics firm that has extensive ties with the US government, jumped 6.8 percent, while robotics firm Teradyne surged 13.4 percent.

Shares in Disney dipped 0.2 percent after it named Josh D'Amaro, head of its theme parks division, to replace Bob Iger as chief executive when he steps down next month.

Asian equities trading was more positive, with sentiment boosted by a rally on Wall Street on Monday following forecast-beating manufacturing data.

That fed through to Asia, where Tokyo closed with a gain of 3.9 percent on Tuesday.

Bangladesh Bank (BB) purchased an additional US $171 million from 16 commercial banks on Wednesday as part of ongoing efforts to stabilise the country’s foreign exchange market.

The dollars were bought at a cut-off rate of Tk 122.30 per US dollar, a central bank official said.

This intervention follows a major purchase on Monday when the central bank acquired $218.5 million from 16 banks at the same rate. With these recent transactions, BB’s total dollar purchases in February have reached $389.5 million in just four days, reports UNB.

Aggressive Accumulation in FY2025-26

Throughout the current fiscal year, Bangladesh Bank has been actively buying dollars to curb rapid Taka appreciation and strengthen foreign exchange reserves.

The total purchases for FY2025-26 have reached $4.32 billion.

Recent Major Interventions:

Feb 4: $171 million from 16 banks

Feb 2: $218.5 million from 16 banks

Jan 29: $55 million from 5 banks

Jan 20: $45 million from 2 banks

Jan 12: $81 million from 10 banks

Jan 6: $223.5 million from 14 banks

All transactions were executed at a uniform cut-off rate of Tk 122.30.

Rationale Behind Market Intervention

Arif Hosain Khan, Executive Director and Spokesperson of Bangladesh Bank, confirmed the latest purchase, noting that the central bank employs an auction-based system to manage liquidity.

Key drivers include:

Remittance Surge: Inward remittances through formal banking channels have reached record levels, with January 2026 alone seeing $3.17 billion, leaving banks with surplus dollar holdings.

Exchange Rate Management: By setting a cut-off rate, the central bank aims to establish a floor for the Taka, supporting exporters and remitters.

Reserve Strengthening: Dollar purchases are helping rebuild the country’s foreign exchange reserves, which stood at $28.51 billion (net) as of December 2025.

Banking insiders say that while the dollar crisis of previous years has eased, active participation by the central bank remains critical to prevent market volatility and ensure a predictable exchange rate for trade planning.

Bangladesh risks losing its trade competitiveness unless it urgently reduces high logistics costs, closes policy implementation gaps, and accelerates private-sector-led infrastructure development, experts warned at a focus group discussion organised by the American Chamber of Commerce in Bangladesh (AmCham) yesterday (3 February).

Opening the discussion, Syed Ershad Ahmed, president of AmCham Bangladesh, said logistics remains the backbone of supply chains and economic activity but continues to lag behind regional peers. Drawing on over three decades of experience, he noted that despite gradual progress, Bangladesh's logistics sector is still poorly understood domestically and insufficiently prepared for rapid global shifts driven by artificial intelligence, automation, decarbonisation, geopolitics, and supply-chain resilience.

He stressed the need to bridge knowledge and capacity gaps to support growing trade and investment needs.

M Masrur Reaz, chairman of Policy Exchange Bangladesh, highlighted the scale of the challenge, saying logistics efficiency is central to export growth through lower costs, faster delivery, and productivity gains. He pointed out that Bangladesh's heavy reliance on the Dhaka–Chattogram corridor, which handles nearly 70% of national trade, poses a structural risk. Disruptions such as the recent Chattogram port labour strike demonstrate the fragility of the system.

Reaz also flagged gaps in implementing the National Logistics Policy, including government monopolies in rail and air cargo, weak inter-ministerial coordination, and the absence of a central logistics authority.

He called for greater private and foreign investment, particularly in cold chains and rail logistics, increased automation, and expert-led infrastructure planning, citing projects such as the Matarbari Deep Sea Port, Bay Container Terminal, and the third terminal at Hazrat Shahjalal International Airport as key opportunities.

Focusing on air logistics, Mahbubul Anam, managing director of CF Global, said costs at Dhaka airport are 20–25% higher than road transport, underscoring the need for stronger public-private coordination, supportive policies, and adequate equipment. He warned that growing e-commerce demand for express logistics will strain existing capacity without urgent reforms and highlighted the absence of direct cargo flights to the US despite clearance facilities for the European Union.

From a development partner perspective, Nusrat Nahid Babi, senior transport specialist for South Asia at the World Bank, said the logistics reform momentum built since 2022 must be reaffirmed by the new government through clear priorities and high-level consensus.

She outlined a phased reform agenda covering policy simplification, multimodal connectivity, skills development, digitalisation, and investment, with immediate emphasis on operationalising the National Logistics Policy 2025 and establishing a logistics division under the Prime Minister's Office.

Md Moinul Huq, Citi country officer of Citibank N.A. Bangladesh, urged customs authorities to implement the Customs Act 2023 by clearly defining electronic documentation and payment procedures. He also criticised the continued reliance on letters of credit, calling for more flexible settlement mechanisms to improve trade competitiveness.

The discussion concluded with a strong call to move from policy intent to execution. Participants urged faster ratification of the National Logistics Policy 2025, structured private-sector engagement, investment in multimodal logistics hubs, and accelerated rollout of digital trade initiatives to enhance efficiency, resilience, and job creation.

European Union ambassadors on Wednesday (4 February) approved details of a 90 billion euro loan for Ukraine, an initiative agreed by EU leaders in December to meet most of Kyiv's financial needs in 2026-2027 and keep up its fight against Russia's invasion.

The ambassadors reached the agreement at a closed-door meeting in Brussels, diplomats said.

The text of the agreement was not immediately available but the Council of the EU said in a statement that two thirds of the funds would be spent on military aid and one third on general budget support.

On military aid, the deal stipulates that Kyiv should use the loan primarily to buy weapons from Ukraine or the EU but could buy from other countries if certain conditions are met.

"Defence products should in principle only be procured from companies in the EU, Ukraine, or EEA-EFTA countries. Should Ukraine's military needs require the urgent delivery of a defence product which happens not to be available in the EU, Ukraine or an EEA-EFTA country, a set of targeted derogations would apply," the Council said.

The agreement also requires approval by the European Parliament, which diplomats said they hoped would come soon to allow the Commission to start borrowing on the markets and make a first payment to Ukraine in early April.

EU leaders agreed in December to fund the loan through EU borrowing rather than back a plan to use Russian assets frozen in the bloc.

India’s trade pact with the US leaves much to be desired but will ease a crushing overhang on the rupee. Ten months into President Donald Trump’s trade war, the South Asian country is emerging bruised but at least more integrated into the global economy.

Washington is slashing its tariff on imported Indian goods to 18 percent from 50 percent in exchange for a promise from Prime Minister Narendra Modi’s administration to halt buying Russian oil, Trump announced late on Monday, adding that India has committed to buy $500 billion of US-made goods. Modi’s own post did not mention what India has conceded, but it appears to fulfil Washington’s demand for lower Indian tariffs on sectors like autos and includes petroleum and defence goods.

Still, even by Trump’s standards, the arrangement is short on details. Washington’s approach appears slapdash ahead of an expected US Supreme Court ruling on the lawfulness of Trump’s trade regime. As of Tuesday afternoon India time, there was no timeline for when the lower tariff would take effect. The purchasing commitment Trump says India has agreed to also seems absurd: the US currently supplies just $46 billion of India’s $690 billion annual imports, of which only $192 billion is fuel.

Nonetheless, the broad contours were positive enough to support Indian markets: the rupee , the worst-performing Asian currency of 2025, moved over 1 percent higher to 90.37 against the US dollar, while the benchmark Nifty 50 Index of stocks rose 5 percent. The revised tariff imposed by India’s largest trading partner is lower than the 20 percent Washington charges shipments from Vietnam and Bangladesh. That restores a potential advantage for India that global investors first expected back in April. It will also ease fears that the Trump administration will turn hostile on India’s IT services, a much larger-value export to the United States.

New Delhi may eventually rue giving up autonomy on its global energy purchases, a pillar of its attempt to maintain a non-aligned foreign policy. But in the short term, the US pact removes the biggest external roadblock to India’s growth and will reduce the need for the government to borrow more to prop up employment-intensive industries like textiles. One day, India might even thank Trump for spurring it to shore up its trade ties. Including a deal struck last week with the European Union after years of delays, Modi has secured agreements with its two largest markets together taking 36 percent of Indian exports, BNP Paribas analysts note. That’s some consolation for a bullied partner.

US President Donald Trump on February 2 said Washington will slash its tariff on Indian goods to 18 percent from 50 percent in exchange for India halting purchases of Russian oil and lowering trade barriers.

Trump said Indian Prime Minister Narendra Modi also committed that India would buy American goods worth more than $500 billion, including energy, coal, technology, agricultural and other products. Trump did not provide a timeline for those purchases, nor for when the lower tariff would go into effect.

Modi announced the revised US tariff in a separate post on social media platform X, without mentioning any concessions made by India.

The US deal addresses Washington’s ask to cut high Indian tariffs on sectors like autos, petroleum, defence, electronics, pharma, telecom products, aircraft and some agriculture products, and that talks for a more comprehensive deal with more sectors are to continue, an unnamed Indian government official told Reuters on Tuesday.

The Trump administration has been racing to complete framework trade deals with major trading partners before the US Supreme Court rules on whether to strike down Trump’s “reciprocal” tariffs under the International Emergency Economic Powers Act.

The interim government’s net borrowing from the banking system rose almost fivefold in the first seven months of the current fiscal year 2025-26, as spending raced ahead of sluggish revenue collection.

The government borrowed Tk 48,819 crore from banks as of January 25, compared with Tk 10,558 crore by January 23 last year, according to Bangladesh Bank (BB) provisional data.

The amount already accounts for nearly half of the full year’s borrowing target of Tk 104,000 crore.

The sharp rise reflects a widening gap between expenditure and income. Government spending has climbed steadily, while revenue collection has failed to keep pace.

The National Board of Revenue posted a 14 percent year-on-year growth in collection in the first six months of FY26, mobilising Tk 185,229 crore. Even so, receipts fell short of the target by about Tk 46,000 crore.

In the same period last year, revenue slipped by 1 percent amid unrest following the political changeover in August 2024.

“This is not a sustainable situation,” said Fahmida Khatun, executive director of private think-tank the Centre for Policy Dialogue (CPD).

She said weak domestic resource mobilisation pushes debt levels higher and leaves little room to manage day-to-day spending. “The revenue collection remains so low that it is difficult to manage regular expenditure.”

According to the economist, the country’s persistently low tax-to-GDP ratio has made the government increasingly reliant on bank borrowing, driving up debt and interest payments.

In FY25, interest payments reached a record Tk 132,460 crore, almost one-fifth of total budget spending, according to the finance ministry’s debt bulletin.

For the current year, interest costs stand at Tk 122,000 crore, accounting for 13 percent of the budget.

As debt servicing takes up a larger share of public funds, allocations for education, health and infrastructure are squeezed, undermining long-term growth prospects.

Fahmida said that unless tax collection grows fast, heavier government borrowing from banks will also tighten credit for the private sector.

Ashikur Rahman, principal economist at the Policy Research Institute (PRI), warned that a risky cycle is beginning to take hold.

Higher borrowing, he said, feeds directly into a growing interest burden within the fiscal framework.

“As debt servicing absorbs a larger share of public expenditure, fiscal space for productivity-enhancing investments, particularly in human capital, health, education, and critical infrastructure, shrinks,” he explained.

Over time, this trade-off weakens the state’s ability to address structural development constraints and undermines the quality of growth itself, said Rahman.

Rising government demand for credit also crowds out private firms, pushing up borrowing costs and discouraging investment.

“This is particularly concerning at a time when economic recovery and employment generation depend critically on a revival of private sector confidence and investment momentum,” he added.

The persistence of high borrowing also points to deeper weaknesses on the revenue side. Despite some gains, collections remain far below what is needed to finance public spending in a sustainable way.

“This points to longstanding deficiencies in tax policy design, tax administration, and compliance. Without a durable improvement in domestic resource mobilisation, borrowing risks becoming a default adjustment mechanism rather than a temporary counter-cyclical tool,” he said.

Breaking the cycle, Rahman said, will require prudent debt management alongside credible revenue reforms and a clear medium-term fiscal strategy that shifts spending towards growth-enhancing priorities rather than debt servicing.

More pressure is expected in the months ahead. The rollout of a new pay scale for government employees will require an additional Tk 106,000 crore, around one-fifth of total operating expenditure for the year.

CPD’s Fahmida suggested the increases should be phased in.

Otherwise, she said, maintaining fiscal balance will become one of the toughest challenges for the next government.