Money outside the country's bank vaults was growing until latest official data available, signifying that depositor trust in the banking sector has not yet revived fully.

According to statistics, the volume of currency outside the banking system had grown over 13 per cent until June last.

Money-market analysts have said the volume of deposits that flew out of the banks' vaults continued to rise significantly in recent months due mainly to trust deficit as weak financial condition of a number of banks come to the media spotlight that shakes confidence of the depositors.

On the other hand, they think, the real interest income against the deposits in many cases, particularly in the compliant banks, comes below inflation rate, which might prompt many of the depositors to look for alternative areas instead of the banks.

According to latest statistics with Bangladesh Bank (BB), the volume of currency outside the banks came to Tk 3.36 trillion by end of June last, Tk 400-billion higher from the figure of Tk 2.96 trillion recorded a year ago.

Even in December last, the figure was Tk 2.75 trillion. Since then, it had grown to Tk 2.83 trillion, Tk 2.86 trillion, Tk 3.03 trillion, Tk 3.0 trillion and Tk 3.49 trillion in January, February, March, April and May respectively.

Seeking anonymity, a BB official has said the volume of mattress money dropped by over Tk 120 billion in a month from May's record count of Tk 3.49 trillion but the volume still much higher than that of the tolerable or normal level.

He said the central bank takes various regulatory steps to bring back the deposits into the banking system through stabilising the sector. "We're hopeful that the volume will decline gradually in the coming days."

Managing Director & CEO, NRBC Bank, Dr Md. Touhidul Alam Khan opines that the surge in cash outside Bangladesh's banking system is not merely a liquidity issue -- it is a profound crisis of trust.

Years of "governance failures", mounting non-performing loans, and highly publicized scandals, including leadership turmoil at major institutions, have fundamentally eroded public confidence.

"When depositors witness banking irregularities or struggle to access their own funds due to withdrawal limits imposed by cash-strapped banks, panic takes hold. The result is a rational, self-preserving response: they withdraw their savings and keep them at home rather than risk institutional collapse," he said.

Simultaneously, the seasoned banker said, persistent inflation has forced lower- and middle-income families to liquidate savings just to meet daily expenses, keeping cash in active circulation rather than deposited in banks.

The harsh reality is that even when depositors lose faith in one bank, they are not moving funds to stronger institutions -- many top-tier, well-governed banks lack the branch presence in rural and suburban areas where trust has collapsed.

"This crisis demands collective accountability: comprehensive banking-sector reforms, restored public confidence through transparent governance. Without urgent, systemic intervention, we risk a prolonged detachment of the public from the formal financial system -- a scenario no economy can afford," he added.Business financing options

Managing Director and Chief Executive Officer of Mutual Trust Bank (MTB) Syed Mahbubur Rahman has noted that the deposit rates in many well-governed banks fall below the prevailing inflation rate, thereby rendering the real income of depositors negative.

"It might prompt many of the depositors looking for alternative areas like lands. This may be a reason apart from trust deficit," said the experienced banker.

Director-General of Bangladesh Institute of Bank Management (BIBM) Dr Md. Ezazul Islam said the volume of mattress money increased remarkably in May last probably for Eid-ul-Azha when a large number of people withdrew deposits to finance sacrificial animals.

In the following month (June 2026), the country saw severe protest over the leadership in Islami Bank and it led to massive cash withdrawal from the country's leading shariah-based bank.

"That's probably the reason behind the buildups of mattress money. But the good part is the figure starts dropping," the economist added.

The National Board of Revenue (NBR) has ended the fiscal year 2025-26 with revenue that is Tk 875 billion short of the target set in the budget.
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The government had little choice but to increase revenue collection in the face of macroeconomic pressure, but now – six months into the BNP government’s tenure – the data indicates that tax collectors have had limited success doing so.

A number of factors - such as the stalling of development projects following the 2024 July Uprising, stagnation of business and trade, deterioration in law and order, and global economic headwinds – have disrupted supply chains and contributed to the shortfall.

Updated data from the NBR released on Tuesday says that the agency collected a total of Tk 4.15 trillion in revenue from the three main sectors - customs, VAT, and income tax - in FY26.

The target was to collect Tk 5.03 trillion.

As a result, the revenue deficit for the fiscal year stands at around Tk 875.27 billion.
However, despite the inability to reach the revenue collection target, the NBR has seen overall growth in revenue.

The revenue collection figure is 12.03 percent higher year-on-year.

The total revenue collection of the NBR for FY25 was around Tk 3.71 trillion.

The revised budget had set a target of collecting Tk 5.03 trillion through the NBR, which the initial budget had set at Tk 4.99 trillion.

Most economists and organisations and institutions have described the revenue collection target set in the current fiscal year's budget, based on the revenue collection trend of the outgoing fiscal year, as “ambitious”.

It was believed that revenue growth of about 45 to 50 percent from the amount collected in the outgoing fiscal year would be required to reach the budget’s target.

There, however, had been little data on how much revenue had been collected within that time frame.

Now, with the latest revenue collection data available, it is clear that the NBR will need revenue collection growth of 45.38 percent to reach its Tk 6.04 trillion revenue collection target for FY27.

Looking at past data, the NBR has never seen such a huge jump in revenue in a year.

The agency’s revenue collection is usually done while accounting for inflation and GDP growth. Accordingly, in years where the agency has made significant progress, the jump in revenue is about 10-15 percent.

How Much Was Collected in Which Sector?

The highest growth in NBR's revenue collection in the outgoing fiscal year was the income tax sector.

This includes company tax, travel tax and tax at source.

In FY26, the total revenue collected by the NBR from the income tax and travel tax sector was around Tk 1.46 trillion, up from approximately Tk 1.3 trillion in 2024-25.

This means record revenue growth of 12.80 percent was achieved in the income tax sector.

Typically, Bangladesh’s largest source of revenue is from the value added tax, or VAT, sector.

The total revenue from this sector in the outgoing fiscal year was around Tk 1.58 trillion.

The NBR data says the amount in 2024-25 was approximately Tk 1.42 trillion, which means revenue collection grew 11.8 percent year on year.

The revenue from the import and export duty sector in the outgoing fiscal year was around 1.12 trillion, which was around Tk 1.1 trillion in the previous fiscal year.

Private-sector credit growth has fallen to a record low, underscoring the fragile state of the country’s economic recovery despite a series of regulatory measures by the central bank.

Bankers and economists attribute the sharp slowdown to mounting bad loans, persistent energy shortages, high borrowing costs and a deteriorating business climate that has dampened investment appetite.

According to the central bank, private-sector credit growth fell to 4.47 per cent by the end of June, the lowest level in Bangladesh’s history. The previous record low was 4.72 per cent, registered in March 2026.

In value terms, total outstanding loans to the private sector stood at Tk 18.26 trillion at the end of June, up 4.47 per cent from Tk 17.48 trillion a year earlier.

In fact, private-sector credit growth has remained in single digits since August 2024, reflecting prolonged weakness in the country’s US$500-billion economy, which is largely driven by the private sector.

June’s credit growth was also well below the Bangladesh Bank’s projection of 5.50 per cent outlined in its latest monetary policy statement released on 30 June 2026.

To revive the economy after months of sluggishness, the central bank has introduced several support measures, including a Tk 600-billion stimulus package aimed at restarting stalled manufacturing activities, easing the exit policy for classified borrowers and providing other forms of regulatory support.

However, these policy initiatives have so far done little to restore confidence among private-sector investors, as reflected in the latest central bank data. Seeking anonymity, a Bangladesh Bank official said the central bank had introduced various regulatory measures to revive investment and economic growth, but many of the incentives, including the stimulus package, have yet to be implemented.

He added that the banking regulator had recently cut the policy rate by 50 basis points to 9.50 per cent in an effort to encourage private investment.

“If the stimulus package is implemented properly and the ongoing energy crisis in the industrial hubs is resolved quickly, private-sector credit growth will certainly begin to recover,” the central banker said.

President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Mohammad Hatem, said entrepreneurs were struggling to survive under the prevailing adverse business and investment climate, particularly because of the persistent gas and electricity shortages.

He said the energy crisis had become so severe that many entrepreneurs had been forced to suspend operations temporarily.

Citing his own factory as an example, Mr Hatem said international buyers had reduced one-third of their orders over concerns about delays in shipment deliveries.

“Under such circumstances, who will think about investment or business expansion?” he asked.

Managing Director of Fareast Knitting & Dyeing Industries, Asif Moyeen, said one of the company’s foreign buyers was due to visit next month to assess its production capacity.

“They want to know whether we will be able to deliver shipments on time,” he said, adding that the company could lose orders if the energy crisis persisted.

Managing Director of Shahjalal Islami Bank, Mosleh Uddin Ahmed, said many people blamed high lending rates for the decline in private-sector borrowing. “Yes, it is one of the factors, but not the main one. The biggest challenge is the energy crisis, which must be resolved as quickly as possible,” he said.

He suggested that the issue be addressed through an inter-ministerial meeting and that a comprehensive action plan be formulated to revive the economy.

Director General of the Bangladesh Institute of Bank Management (BIBM), Dr Md Ezazul Islam, said private-sector credit growth of around 5.0 per cent was not necessarily undesirable if the funds were channelled into productive sectors.

Bangladesh hopes to procure liquefied natural gas from next-door neighbour Myanmar in 12-hour transportation once a much-expected LNG sales-and-purchase deal is done, as the country faces exigencies of energy.
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Currently, the country sources LNG from the United States, Australia and Angola wherefrom import consignments take 15 to 30 days.

It, however, takes around six to seven days to import the fuel from the nearest sources in Middle-Eastern countries.

But Bangladesh has not got LNG from its Mideast sources -- QatarEnergy and OQ Trading -- over the past several months as they have stopped supplying the gas by enforcing 'force majeure' since late February immediate after the war between the USA and Iran broke out.

"If both countries agree and settle price negotiations, Bangladesh will be able to import LNG from Myanmar within 12 hours -- the shortest possible time to import the fuel," Iqbal Hasan Mahmood, Minister for Power, Energy and Mineral Resources (MPEMR), told The Financial Express on Tuesday.

"We have proposed importing gas from neighbouring Myanmar through pipeline or as LNG," he said.

"I made the proposal on Sunday after having the green signal from Prime Minister Tarique Rahman to import gas from our neighbour, which is a gas-rich country in this region, to resolve our mounting natural-gas crisis," said the minister.

Myanmar has around 40 per cent of gas of its own in various oil-and gas-exploration projects being implemented under partnership with Chinese, Korean, Indian and Thai energy companies, from where the country can export LNG to Bangladesh, said the Bangladeshi minister.

The option was discussed during a meeting with Myanmar's ambassador in Bangladesh, Kyaw Soe Moe, on Sunday at the secretariat.

As a close neighbour, Bangladesh is prioritising enhanced energy cooperation with Myanmar, he said, as industries, households and other consumers are in a crying need for gas amid a fuel crunch.

Importing LNG from Myanmar could further cut Bangladesh's dependence on the volatile spot market, he added.

Bangladesh has significant domestic demand for natural gas, and the government is particularly interested in sourcing energy from Myanmar via pipeline in the long term and as LNG in the short term, Mahmood said.

Meanwhile, the Myanmar ambassador welcomed Bangladesh's proposal and said supplying gas as LNG would be the easiest way for energy cooperation between the two bordering countries.

The envoy suggested that the matter could be reviewed at a Bangladesh-Myanmar joint technical-committee meeting.

The minister also extended a formal invitation to Myanmar's energy minister to visit Bangladesh and expressed his own willingness to undertake a trip to Myanmar to discuss the gas import. Bilateral energy cooperation could play a supportive role in establishing the proposed China-Myanmar-Bangladesh corridor, which was discussed during the Bangladeshi prime minister's recent visit to China, the energy minister said.

Currently, Myanmar exports gas to Thailand and China through pipelines.

Bangladesh is currently struggling to meet its gas demand amid elevated LNG prices, and as contracted long-term LNG suppliers continue to restrict scheduled cargo deliveries.

Due to disruptions to long- and short-term LNG supply, Bangladesh's LNG spot cargo purchases this year are set to reach 41 by August, 39 of which have come after the start of the war in the Middle East.

In addition to limited contractual supplies due to the war in the Middle East, Bangladesh is currently facing a restriction in natural gas supply following the abrupt shutdown of operations at one of its two FSRUs on July 21.

Bangladesh's overall natural gas supply fell to about 2,139 million cubic feet per day (mmcfd) on August 2, with 493mmcfd of regasified LNG, down from the pre-accident level of 2,642mmcfd, according to official Petrobangla data.

The country's natural gas demand is about 4,000mmcfd, according to Petrobangla, which far outstrips the availability from domestic production and imports.

Gas-fired power plants are the worst hit, with electricity generation of about 2,500 megawatts being affected due to the FSRU disruption, state-owned Bangladesh Power Development Board (BPDB) Chairman Md Rezaul Karim said.

The gas-fired power plants are currently receiving about 680mmcfd, down from about 950mmcfd in the pre-accident period, he said.

The shutdown of the FSRU has reduced gas pressure in many areas, disrupting industrial production, too, he said.

Although the deadline for filing income tax returns was extended four times until March, the return filing rate fell in fiscal year 2025-26 from a year earlier.

It was also the lowest in nearly a decade, except in FY22, when the economy was emerging from the Covid-19 pandemic, which disrupted personal incomes and business activity.
Only about 38 percent of registered taxpayers, including companies, filed income tax returns in FY26, highlighting a persistent gap between taxpayer registration and compliance despite a growing number of taxpayer identification number (TIN) holders.

Tax experts and business leaders attribute the low filing rate to two factors: an outdated and inflated TIN database containing many inactive registrants, and weak enforcement that leaves many eligible taxpayers outside the tax net.

To improve compliance, the National Board of Revenue (NBR) has introduced year-round return filing under the new Income Tax Act, strengthened enforcement and, most recently, offered a tax rebate of up to 5 percent for early filers.

Whether those measures will significantly improve compliance remains to be seen, experts say.

NBR data show the number of TIN holders rose 11 percent to 1.30 crore by June 2026 from 1.17 crore a year earlier. Yet only 49.55 lakh returns were filed, meaning nearly 62 percent of registered TIN holders did not submit returns despite repeated deadline extensions.

Income tax collection nevertheless rose 13.2 percent year-on-year to Tk 1.46 lakh crore in FY26 from Tk 1.29 lakh crore.

The stronger growth in tax revenue despite weaker return filing suggests collections still rely heavily on tax deducted or collected at source and advance tax payments rather than voluntary compliance.

The corporate picture is similar. Of 1.60 lakh corporate TIN holders, only 42,000 filed returns in FY26, up from 39,659 a year earlier.

Corporate income tax contributes about a quarter of total tax revenue. Yet collections amount to only 1.5 to 1.8 percent of GDP, roughly half the level in peer economies, according to the Organisation for Economic Co-operation and Development (OECD), and below several small Latin American and Caribbean economies.

The shortfall leaves the government more dependent on VAT, customs duties and borrowing, with the burden ultimately falling on ordinary people.
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WHY COMPLIANCE LAGS

Both Kamran T Rahman, president of the Metropolitan Chamber of Commerce and Industry (MCCI), and Snehasish Barua, director of SMAC Advisory Services Limited, attribute much of the mismatch to an outdated database.

Many TINs were issued not because their holders had taxable income, but because a TIN is required to buy land, register property, open a bank account, obtain a credit card or secure a loan, Kamran said.

Others belong to people who have since died, left the country or become inactive, yet their records have never been removed.

“The database should be updated regularly so that inactive TINs are removed. That will give a more realistic picture of the country’s active taxpayer base,” he told The Daily Star on Saturday.

The two, however, differ on priorities.

Kamran said even the return-filer count overstates compliance because many returns show zero tax due. The priority, he argued, should be expanding the pool of active taxpayers rather than increasing the number of TIN holders, or “the burden will keep falling on existing compliant taxpayers.”

Snehasish, by contrast, said cleaning up the database alone would not solve the deeper problem. A large pool of eligible taxpayers remains outside the net, and the real solution is enforcing existing rules, particularly the mandatory Proof of Submission of Return (PSR) requirement under Section 264 of the Income Tax Act.
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City corporations renewing trade licences, banks accepting large term deposits or opening letters of credit, and chambers issuing memberships should require a PSR wherever the law mandates it.

“The NBR needs to first run awareness sessions and then work closely with these institutions to enforce the existing provisions.”

Both Kamran and Snehasish were sceptical that the NBR’s year-round filing option and incentives for early filers would move the needle.

“People who already file returns will continue to do so,” Snehasish said.

“The incentives may encourage some small taxpayers, but they are unlikely to persuade habitual non-filers or large taxpayers.”

Kamran agreed. He said that without a fully digitised tax administration and firmer enforcement, the tax net is expanding, but the pace is still too slow.

NBR’S POSITION

Md Rafiqul Islam Chowdhury, NBR member for tax survey and inspection, pushed back against interpreting the low filing rate as evidence of widespread tax evasion, echoing concerns raised by Snehasish and Kamran about the TIN database.

A significant share of TINs, he said, likely belongs to people who have died but whose records have not been purged, or to people who obtained TINs for credit cards or bank loans without ever having a filing obligation.

Rafiqul said business closures in recent years have also contributed to the low filing rate, as many taxpayers have since become inactive.

He added that thousands of teachers and other professionals were brought into the tax net through administrative drives, but many may no longer be filing returns.

To improve compliance, the NBR has introduced year-round return filing under the new Income Tax Act and strengthened enforcement. Tax offices can now simultaneously issue notices requiring taxpayers to file returns and impose penalties on non-filers.

Rafiqul expressed optimism that year-round filing, stronger enforcement and incentives for early filers would encourage more taxpayers to submit returns in the coming years as Bangladesh seeks to raise its tax-to-GDP ratio, one of the lowest in South Asia.

Gold rose more than 2 percent on Wednesday to a one-month high as hopes of a US-Iran peace deal tempered some inflation concerns, while investors awaited key US jobs data for clues on the Federal Reserve’s policy path.

Spot gold climbed 2.2 percent to $4,164.13 per ounce by 0836 GMT, its highest level since July 7. US gold futures rose 1.7 percent to $4,223.60.
US President Donald Trump said his administration had “very good discussions” with Iran during all-day negotiations on Tuesday, fuelling expectations of an imminent end to the five-month conflict.

“There are increasing signs of a Gulf ceasefire deal, which means Treasury yields are moving lower on easing inflation worries, which helps make non-yielding assets like gold more attractive,” said Jamie Dutta, a market analyst at trading platform Nemo.money.

The US dollar remained under pressure, making greenback-priced metals more attractive to holders of other currencies, while yields on the benchmark 10-year US Treasury note fell to a one-week low.

Gold tends to lose its appeal in a high interest-rate environment despite its status as an inflation hedge, as it yields no interest.

Traders are now pricing in a 59 percent probability of a September rate hike, down from 67 percent a day earlier, according to the CME FedWatch Tool.

Meanwhile, Federal Reserve Bank of Kansas City President Jeff Schmid said on Tuesday that some sort of monetary policy tightening is needed to get “too high” inflation back to the 2 percent target.

“Concerns about the Fed’s credibility will probably ease as the central bank raises interest rates over the coming months. That would result in gold prices falling and settling below $4,000 per ounce before the end of this year,” said Hamad Hussain, a climate and commodities economist at Capital Economics.

In focus now is the ADP employment report due at 1215 GMT and the July nonfarm payrolls report scheduled for Friday.

The Bangladesh Bank has removed the long-standing loan disbursement ceilings on five key corporate branches of state-owned Sonali Bank PLC, allowing them to resume lending to large and eligible borrowers subject to due diligence.

The central bank withdrew the restrictions following a recent application by the bank, removing credit caps on Sonali Bank's Local Office, Foreign Exchange Corporate Branch, Shilpa Bhaban Corporate Branch and Shaheed Abrar Fahad Avenue Corporate Branch in Dhaka, as well as the Laldighi Corporate Branch in Chattogram.

Before the latest directive, the branches were subject to lending limits ranging from Tk5 crore to Tk20 crore, depending on the branch. With the restrictions now lifted, the branches can sanction larger loans after conducting the required scrutiny of borrowers.

Following the removal of these barriers, all branches under the state-owned lender are now empowered to process and issue loans to qualified clients in accordance with standard risk-assessment guidelines.

The Bangladesh Bank has eased import declaration requirements for intercompany transactions, allowing importers to conduct business with their parent companies, approved foreign subsidiaries and branch offices under enhanced transparency and compliance conditions.

The central bank issued the revised instructions through Foreign Exchange Policy Department today (4 August), amending the earlier requirement that importers must declare they have no direct or indirect connection or financial interest in foreign exporters, reports BSS.

The circular said the change was introduced in recognition of the fact that many international trade transactions are legitimately conducted between related companies.

Under the revised rules, importers engaged in intercompany transactions must declare that the transactions are conducted on an arm's length basis at competitive market prices and comply with all applicable transfer pricing regulations, relevant laws and Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) standards.

In such cases, the declaration previously required under clause 1(c) of the prescribed IMP Form regarding the absence of any relationship between the importer and the exporter will no longer be applicable. Bangladesh Bank has amended the IMP Form accordingly.

The central bank directed Authorized Dealers (ADs) to obtain the required declarations before processing import transactions.

The US trade deficit narrowed slightly in June, government data showed on Tuesday, with both imports and exports contracting over the month before.

The overall trade gap came in at $73.3 billion, down 5.6 percent from May on the back of a bigger decrease in imports than exports.

The data missed expectations slightly, with Briefing.com forecasting the deficit to come in at $69.6 billion.

US President Donald Trump has sought to remake the global trade order since taking office last year, imposing a raft of sometimes eyewatering tariffs on Washington’s friends and foes alike.

Some of the tariffs have been withdrawn after being contested in court. His latest salvo faced a similar challenge earlier this week in the New York-based Court of International Trade.

The Republican billionaire has made narrowing the US trade gap by increasing exports while onshoring industries and manufacturing a key promise of this term.

In June, imports came in at $388 billion, down $7.3 billion from the month before, while exports dropped $2.9 billion compared to May.

The reduction in exports saw the biggest drop coming from crude oil and fuel oil, as energy prices fell on the back of positive negotiations in the US war on Iran in June.

Trump’s war on Iran has roiled global energy markets as Tehran’s retaliatory action has virtually closed the Strait of Hormuz, through which about a fifth of the world’s oil and gas normally travels.

Iran has also hit Washington’s Gulf allies with missile and drone attacks, affecting key energy production facilities.

Over the course of 2026 so far, the US goods and services deficit has decreased by 33.8 percent compared to the same period in 2025, mostly off the back of a 11.7 percent increase in exports.

The Indian rupee rose to its highest level in a month on Wednesday, buoyed by lower oil prices and a weaker dollar, while forward premiums dropped ahead of the Reserve Bank of India’s policy decision.

The currency opened 0.5 percent higher at 94.92 per US dollar, its highest level since July 1, and has been moving in the 94.92-95.02 range in early trade.

The Brent crude oil benchmark tumbled 5.2 percent on Tuesday, extending losses by another 1 percent in Asian trade amid comments from Qatari and US officials that fuelled hopes of a diplomatic resolution to the months-long Iran conflict.

The latest decline in crude oil prices reinforced the rupee’s positive bias, which has been building over recent sessions. Despite the recent momentum, traders said the break past the 95-per-dollar mark came as a surprise.

“I hadn’t expected the 95 level to give way,” a currency trader at a private-sector bank said.

“It appears the underlying trend has become so supportive that positive developments are having a bigger impact (on lifting the rupee) than they normally would.”

The decline in oil prices comes ahead of the Reserve Bank of India’s policy decision due shortly, where it is widely expected to leave interest rates unchanged.

Traders expect the policy outcome to have only a limited impact on the rupee, with oil prices, the dollar and RBI FX intervention seen as dominant drivers of the currency in the near-term.

Dollar/rupee forward premiums eased ahead of the policy decision, largely tracking the move in the spot market.

The one-year implied yield fell 4 basis points to 2.82 percent.

The government is in close coordination with the Asian Development Bank (ADB) for availing around $775 million support from the Manila-based lending agency against four fresh projects in the country’s power and energy, inclusive affordable housing and education sectors.

“Work is underway for holding the negotiations with the ADB and finalizing other procedures for these proposed projects,” said a senior official of the Economic Relations Division (ERD).

The senior ERD official informed that loan negotiations for $175 million ADB support has already been completed successfully for “Bangladesh: The Sustainable Energy Development and Empowering Communities in Chattogram Hill Tracts Project”. The DPP of the project now awaits ECNEC approval.

The project is located in the southeastern region of Bangladesh, encompassing the districts of Rangamati, Khagrachhari, and Bandarban, collectively known as the Chattogram Hill Tracts (CHT).Credit & Lending

The project encompasses a comprehensive power distribution system development and modernization program in the Chittagong Hill Tracts (CHT).

Key activities include the construction of Six new 33/11 KV substations (Three in Rangamati, one in Bandarban, and two in Khagrachari) and the upgradation of four existing substations along with the construction of one new switching stations.

SM Jakaria Huq, ERD Additional Secretary and Wing Chief, ADB, informed that loan negotiations for $100 million for the “Bangladesh: Inclusive Affordable Housing Finance Project” and another $200 million for the “Strengthening of Distribution network for 13 Palli Bidyut Samities Surrounding Dhaka City” is likely to be held this month.

Besides, the ADB and the Global Partnership for Education (GPE) are set to provide US$350 million to support a wide-ranging education reform programme in Bangladesh.

The “Bangladesh: Inclusive Affordable Housing Finance Project” project addresses the core market failures that prevent scaling-up of inclusive, affordable housing finance solutions for low- and middle-income households, with a particular focus on access for women.

The project envisages three key solutions: Credit line for innovative, inclusive, and affordable housing finance solutions.

A proposed $100 million financial intermediation loan will be used to fund a credit line to be established through PKSF in local currency to fund sub-loans to the target low-income beneficiaries, particularly women through eligible MFIs.

According to the proposal, the “Strengthening of Distribution network for 13 Palli Bidyut Samities Surrounding Dhaka City” project aims to modernise and strengthen distribution networks in rapidly industrialising areas, particularly Gazipur, Narayanganj and Narsingdi, where large factories and economic zones have significantly increased electricity demand.

The Taka 4,973.73 crore draft project aims to strengthen electricity distribution systems in industrially developed areas surrounding Dhaka to meet rapidly growing demand from industries, businesses and households.

The project will be implemented by the Bangladesh Rural Electrification Board (REB) across 13 Palli Bidyut Samities in Dhaka, Gazipur, Mymensingh, Manikganj, Munshiganj, Narayanganj and Narsingdi districts.

Meanwhile, the Asian Development Bank (ADB) and the Global Partnership for Education (GPE) are set to provide US$350 million to support a wide-ranging education reform programme in Bangladesh.

The “NextGen Education Programme” aims at improving learning outcomes, expanding digital education and strengthening institutional capacity.

Of the total assistance, Bangladesh will receive a $300 million concessional loan from the ADB and a $50 million grant from the GPE, according to another official at the ERD.

The programme will be implemented through three separate projects under the Ministry of Primary and Mass Education, the Secondary and Higher Education Division (SHED), and the Technical and Madrasah Education Division (TMED) by December 2030.

Under the proposed financing structure, $220 million of the ADB loan will be allocated to secondary and higher education, while the remaining $80 million will support technical and madrasah education.

The $50 million GPE grant will support primary, secondary and technical education. Of the total grant, the Ministry of Primary and Mass Education will receive $22 million, while SHED and TMED will each receive $14 million.

According to the project proposal, the initiative aims to modernise Bangladesh’s education system through digital transformation, improved learning outcomes, teacher development, infrastructure expansion and institutional reforms.Government

Officials said the “NextGen Education Programme” is expected to become a landmark reform initiative for Bangladesh’s education sector by linking development financing to measurable improvements in learning quality, institutional efficiency and skills development.

Earlier in May this year, the ADB announced that it would provide Bangladesh with $5 billion in support over the next five years.

The funding, announced during a visit to Dhaka by ADB President Masato Kanda, will support the Integrated Growth Network Development Initiative, which aims to improving connectivity, boosting investment and thus promoting balanced regional development.

Bangladesh has been experiencing a long episode of near-double-digit inflation since FY2023. This inflation rate considerably exceeds the global inflation rate. Efforts to control inflation have yielded some limited results, but the inflation rate remains persistently high, hovering around 9 percent annually. Along with rising inflation, GDP growth has slumped. This has raised the question, is Bangladesh passing through a phase of stagflation?

Sustained high inflation, along with a sharp deceleration in GDP growth, has hurt employment and increased poverty. The World Bank estimates that the incidence of both poverty and extreme poverty has increased since 2022. This reversal of poverty progress is a serious social problem. The employment challenge is reflected in the reduction in employment in all three broad sectors of agriculture, industry and services.
This stagflationary phase cannot prevail for long without creating social discontent and must be addressed swiftly. The policy focus should concentrate on lowering the inflation rate sustainably, while supporting the recovery of GDP growth.

The first question is why the inflation rate is persistently high in Bangladesh even as global inflation has fallen. In a market economy, prices are determined by demand and supply. The aggregate price level for the economy as a whole, which is the weighted average of individual prices, is similarly influenced by forces of aggregate demand and supply. So, the inflation rate, defined as the rate of change of the aggregate price level, is determined by factors that affect the growth of aggregate demand and supply.

The oldest theory of inflation, known as the quantity theory of inflation, owes its origins to Polish mathematician Nicolaus Copernicus and states that the rate of growth of prices (inflation) is the difference between the rate of growth of money supply and the rate of growth of real GDP. While this simple theory has faced fierce criticism from Keynesian economists, it has grown in sophistication, led by monetarist economists like Milton Friedman. The Keynesian economists have argued that the demand for money can change and affect the velocity of circulation and thereby destroy the one-to-one correspondence between the growth of money supply and inflation. Yet, the substantial role of monetary impulse in affecting inflation has remained intact.

However, instead of targeting the growth of money supply as recommended by monetarists, modern central banks target the inflation rate directly by influencing the interest rate. When inflation is high, a typical central bank raises the interest rate to reduce demand through cutbacks in spending, which then lowers inflationary pressure.

In my book “Bangladesh Stabilizing the Macroeconomy” published in December 2023, I provided evidence that the main factors that initially fueled the acceleration in inflation in Bangladesh since August 2022 were the excess growth of domestic credit, mostly public sector credit, owing to the large stimulus packages of the Covid-19 period (FY20-FY21) funded mostly through budgetary deficits and money creation, the continued financing of fiscal and quasi-fiscal deficits (FY22-FY23) through money creation, and control over interest rates (July 2020-November 2023) that pushed up private sector credit growth and lowered the growth of bank deposits.

Monetary policy correction started in November 2023 when the interest rate was deregulated, and the financing of the budget deficit through money creation was stopped. These policies were strengthened in May 2024 and further tightened during August-October 2024. They have largely remained in place since then. The interest rate is now deregulated, and the official stance of monetary policy is to control inflation through interest-rate management.

Many observers are disappointed that despite considerable monetary tightening, inflation remains stubbornly high at near double digits. There is also some scepticism about whether monetary tightening has gone too far without favourable outcomes for inflation. This scepticism, however, is based on a partial view. A fuller analysis will show that the main reason the full benefit of demand tightening for lowering inflation has not emerged is because of a large supply downturn that has happened over the past several years.

GDP growth rate declined by 51 percent between FY22 and FY26. All sectoral components of GDP have experienced a reduction in growth; the sharpest cutback was registered by the manufacturing sector with a 71 percent decline in the growth rate between FY22 and FY26. At the same time, the volume of imports has been falling, with the deepest cuts in imports of consumer and capital goods. This magnitude of supply shock over a 5-year period is unprecedented in the recent history of Bangladesh and is a major factor for the persistence of high inflation.

A sustainable strategy for fighting inflation is to continue to restrain demand while seeking to restore the growth momentum for both GDP and imports. Indeed, the growth of GDP and imports is correlated, and GDP growth cannot be restored without allowing imports to grow. Similarly, to lower inflation, in addition to boosting domestic supply, it is important to lower trade barriers that restrict the import of consumer goods into Bangladesh at a time when there are supply constraints.

The policies for demand and supply management must be internally consistent. This consistency of policy-making has become a major challenge. Despite the stated monetary policy stance of monetary tightening to fight inflation, in recent months money and credit growth have exceeded prudent limits consistent with lowering inflation. After falling between FY23 and FY25, the growth of money supply accelerated in FY26 from 7 percent to 10.8 percent. Similarly, total credit grew from 8.3 percent in FY25 to 10.2 percent in FY26. Additionally, the velocity of circulation increased from 2.4 in FY23 to 3.0 in FY26, possibly reflecting higher inflationary expectations. This expansion in monetary and credit growth, along with rising velocity of circulation in the face of a falling growth of aggregate supply, has inevitably stoked inflation as predicted by the quantity theory of inflation.

The acceleration in money supply growth is partly the outcome of the creation of high-powered money through the Bangladesh Bank’s purchase of foreign assets. Financing of a large budget deficit through bank borrowing by the Treasury has also contributed to the growth of money supply and domestic credit. Indeed, the Treasury deficit financing has tended to offset the reduction in total credit growth resulting from a reduction in private credit growth and thereby lowered the effectiveness of interest rate increases in reducing inflation. While private credit growth has fallen to a mere 5.3 percent, public sector credit growth surged to 26 percent. The conduct of fiscal policy is clearly not consistent with the targets of monetary policy. Moving forward, this must be corrected.

What is the role of money and credit policies for restoring the growth momentum? Looking at the supply side, it is hard to argue that GDP growth is constrained by a lack of liquidity. While the turmoil in the banking sector has created liquidity problems for the weak banks, the strong banks are flush with liquidity because they cannot find adequate traditionally defined creditworthy borrowers who are willing to borrow.

This slowdown in the demand for credit in the organised private sector is mostly a reflection of weak profitability of investment owing to several binding constraints, including high cost of doing business, a severe energy supply crunch, weak trade logistics, and shortage of skills. These constraints must be addressed swiftly to increase investment and GDP growth, but they cannot be removed by lowering the interest rate and increasing domestic liquidity.

Channelling greater credit growth to areas where there is indeed a credit constraint, such as the micro and small enterprises sector, would support a supply response by relaxing the credit constraint. But this credit expansion must be made consistent with the growth of total credit and money supply required for reducing inflation by lowering the bank financing of the budget deficit.

The writer is vice chairperson of the Policy Research Institute of Bangladesh (PRI). He can be reached at sadiqahmed1952@gmail.com

The United ​States has ‌removed counterterrorism ​sanctions ​from two aircraft ⁠and ​three airlines ​with links to ​Iran's ​Islamic Revolutionary Guard ‌Corps, ⁠according to details posted ​to ​the ⁠US ​Treasury Department's ​website ⁠on Wednesday (5 August).

Robi Axiata PLC, one of the country's largest telecom operators, said it has invested Tk9,331.36 crore in network expansion over the past five years since making its capital market debut in 2020, boosting its digital infrastructure and driving operational growth.

Supported by this investment, the company has delivered consistent profit growth since listing, enabling it to pay handsome dividends to shareholders.

Robi raised Tk523.79 crore through its initial public offering (IPO) in late 2020.

Although it initially skipped a dividend payout for that year, it later revised its decision and declared a 5% cash dividend. Since then, the operator has consistently paid dividends, with payouts growing alongside its increasing profitability.

At a media briefing titled "Five Years in the Stock Market: Governance Excellence Driving Performance" held at a city hotel, Robi said sustained investment, stronger corporate governance, and an expanding digital business have driven steady financial and operational growth.

Robi Managing Director and CEO Ziad Shatara presented an overview of the company's business performance since its capital market debut, highlighting strong commercial growth and an expanding subscriber base.

He said the company has maintained consistent revenue and profit growth while expanding its subscriber base, digital services, and network infrastructure over the past five years.

Highlighting its sustained financial performance, Shatara noted that revenue grew 1.2 times from 2021 to reach Tk9,992 crore in 2025.

Over the same period, earnings before interest, taxes, depreciation, and amortization (EBITDA) expanded to Tk4,979 crore, up 1.5 times, while profit after tax jumped to Tk937 crore in 2025, up 5.2 times from Tk180 crore in 2021.

Shatara added that the operator remains the fastest-growing mobile network operator in the market.

"In the second quarter of 2026, Robi posted a 6.1% revenue growth while competitors contracted by 1.2%. Similarly, in the first half of 2026, Robi achieved a 7.1% revenue increase compared to a 0.7% decline across the rest of the industry," he said.

The Robi CEO added that the operator's market share in total sectoral revenue increased from 29.3% in 2021 to 31.3% in 2025. Over the 2021–2025 period, the operator captured 44.7% of the overall industry revenue growth.

Subscriber base

Since its listing in 2020, Robi added 76.7 lakh subscribers, 1.1 crore internet users and 2.55 crore 4G users. During this post-listing period, the mobile operator expanded its 4G sites from 13,173 to 19,646 nationwide, while expanding its total spectrum holdings 3.4 times to 124 MHz.

The infrastructure investment accelerated data adoption across the network. By the second quarter of 2026, Robi's active subscriber base expanded to 5.86 crore.

Internet users accounted for 78.9% of its total subscribers, with 4G users making up 72% – the highest ratios in Bangladesh's telecommunications industry. Its monthly data consumption per user surpassed 10 GB, the operator said in a press release.

The growth in data usage shifted the company's revenue mix, with data services accounting for 44.4% of total revenue in H1 2026, up from 36% in 2020.

The operator's capital strategy also prioritized domestic procurement. Robi's spending on local vendors rose from 57% of total procurement in 2020 to 78.1% in 2025.

Additionally, the company channelled over Tk280 crore to local software creators through its application platform, bdapps.

Dividend and profit

Between 2021 and H1 2026, Robi generated Tk2,819.13 crore in profit after tax and distributed Tk2,854.67 crore in dividends to shareholders.

Profit after tax for the first half of 2026 grew by 29% compared to the same period in 2025, while its EBITDA margin reached 54.2%.

Shatara said, "Our digital ecosystem has also expanded beyond telecommunications. bdtickets now serves more than 80,000 travellers daily through a network of over 150 bus operators. Our enterprise business, Axentec, supported by RedDot Digital's technology capabilities and global partnerships, is helping organisations accelerate their digital transformation, while RedDot has further strengthened Robi's in- house technology capabilities."

He continued, "Artificial intelligence has become an increasingly important enabler across our business. It helps optimise network planning, personalise products and services, and improve customer experience. With 2.28 crore customers using our self-care applications, AI enables us to respond more efficiently and deliver more personalised digital experiences.

"Al will play an even bigger role in our business in the years ahead. Throughout this journey, robust governance has provided the foundation for sustainable growth. We have continued to strengthen our data governance to protect customer privacy, guard against cyber threats and ensure AI is developed and deployed responsibly."

He said as a technology company, the operator values agility and innovation. "Equally, we believe strong governance is one of our core strengths. Four empowered Board committees provide the oversight that keeps us focused on our purpose of advancing Bangladesh digitally."

Robi listed on the Dhaka and Chattogram stock exchanges in late 2020 in what was the country's largest-ever IPO.

Axiata Group Berhad holds a 61.82% majority stake in the company, Bharti Airtel holds 28.18%, and public shareholders hold the remaining 10%.

The Dhaka Stock Exchange (DSE) extended its winning streak for a fourth consecutive month in July, driven by a spectacular rally in mutual funds, encouraging corporate earnings and a series of market-friendly policy initiatives that strengthened investor confidence.

The benchmark DSEX index gained 132 points, or 2.3%, to close at 5,895, according to Sheltech Brokerage Limited's monthly market review. The blue-chip DS30 index rose 1.78% to 2,217, while the Shariah-based DSES advanced 2.32% to 1,195.

Market participation also improved. Average daily turnover increased 4.03% month-on-month to Tk1,254 crore, while average daily trading volume rose 9.57% to 425.5 million shares.

Mutual funds lead rally

Mutual funds emerged as the top-performing sector in July, with market capitalisation surging nearly 22% - the highest among all sectors.

Sheltech Brokerage attributed the rally to growing optimism over government plans to reform the long-neglected mutual fund industry. Investors accumulated fund units in anticipation of measures aimed at improving institutional participation and long-term valuations.

Trading activity reflected the enthusiasm. Average daily turnover in the sector jumped 189% month-on-month to Tk42.87 crore.

Among listed securities, EXIM Bank First Mutual Fund topped the gainers with a 91.43% rise to Tk6.70, while MBL First Mutual Fund climbed 87.8% to Tk7.70. NCCBL Mutual Fund One advanced 65.91% and PF First Mutual Fund gained 62.5%.

Analysts said the rally was further supported by the FY27 budget, which removed the Tk5 lakh investment ceiling previously required to qualify for tax rebates.

Broad-based gains

The rally extended beyond mutual funds. Textile stocks posted the second-highest sectoral gain at 10.81%, followed by food and allied (7.46%), jute (6.34%), travel and leisure (6.10%), tannery (5.92%) and non-bank financial institutions (5.68%).

Textiles also dominated trading, accounting for 17.48% of total market turnover, followed by insurance (14.28%) and pharmaceuticals and chemicals (11.44%).

Analysts said the broad participation suggested improving investor sentiment rather than speculative buying in a few sectors.

Outperforming regional peers

Bangladesh's stock market outperformed several regional peers despite geopolitical tensions and global market uncertainty.

Among South and Southeast Asian markets, only Indonesia and Malaysia posted stronger monthly gains. Indonesia's IDX Composite rose 10.51% and Malaysia's FTSE Bursa Malaysia KLCI gained 3.66%.

Bangladesh outperformed India's Sensex, which rose 2.11%, and Thailand's SET Index, up 2.04%. Meanwhile, Pakistan's KSE-100 Index fell 2.33%, Sri Lanka's All Share Price Index dropped 5.09% and Vietnam's VN-Index declined 6.68%.

Sheltech Brokerage said Bangladesh's comparatively strong performance reflected improving domestic sentiment fuelled by regulatory reforms and stronger-than-expected corporate earnings.

Reforms and easing support market

Investor confidence strengthened after the government unveiled a 17-point roadmap to develop the capital market.

The announcements briefly lifted the DSEX to 5,926.28 points – its highest level in nearly two years – while daily turnover reached a two-year high of Tk1,669 crore.

The roadmap includes faster settlement systems, digitalisation of trading, expansion of the bond market, AI-based market surveillance and measures to attract institutional investors.

Support also came from Bangladesh Bank, which cut the policy interest rate by 50 basis points, signalling the start of monetary easing to support investment and economic recovery.

Government security yields also declined as banking system liquidity improved. Lower interest rates generally make equities more attractive by reducing financing costs and encouraging investors to shift from fixed-income assets.

Earnings remain encouraging

Corporate earnings also reinforced optimism. Of the 89 listed companies that disclosed April-June results during the month, 65 reported year-on-year growth in earnings per share.

Banks and non-bank financial institutions were among the strongest performers, benefiting from higher income from investments in government securities despite subdued lending. Several multinational companies also reported solid earnings, sustaining demand for blue-chip stocks.

Sheltech Brokerage said the results indicated that many listed companies were adapting to the challenging macroeconomic environment through cost control, operational efficiency and stronger treasury income.

Focus shifts to next reforms

Investors are now watching the finalisation of the revised margin lending framework, which is expected to influence market liquidity. They are also awaiting dividend declarations and annual financial statements from June-closing companies.

According to Sheltech Brokerage, continued implementation of market reforms, supportive monetary policy and stable corporate earnings could help sustain the market's positive momentum despite lingering global and domestic economic risks.

The Dhaka Stock Exchange (DSE) closed marginally higher today (4 August) after a volatile trading session marked by a tug-of-war between bargain hunters and profit-takers.

The benchmark DSEX index rose 8 points, or 0.14%, to 5,894. However, the blue-chip DS30 index slipped 2 points to 2,201, suggesting investors selectively favoured momentum-driven stocks over large-cap heavyweights, market insiders said.

Market breadth remained almost evenly balanced, with 170 stocks advancing, 176 declining and 45 remaining unchanged.

Turnover at the premier bourse declined 8% from the previous session to Tk1,111 crore, indicating slightly weaker market participation.

According to EBL Securities, the market showed resilience as investors continued accumulating momentum-driven stocks despite lingering concerns about the market's underlying strength. While cautious sentiment from previous sessions initially kept indices under pressure, a mid-session rally in insurance stocks helped the market recover and close in positive territory.

Sheltech Brokerage Limited said early buying pushed the benchmark index to an intraday high of 5,913 points before intensified profit-booking dragged it down to an intraday low of 5,888 points.

Although the market attempted to recover in the latter half of the session, buying conviction remained weak, and selling pressure erased much of the morning's gains.

The textile sector accounted for the largest share of turnover at 20.3%, followed by general insurance with 17.1% and pharmaceuticals with 12.2%.

Insurance was the day's best-performing sector, with general insurance advancing 3.4% and life insurance gaining 2.7%. The services sector also rose 1.7%.

On the downside, the information technology sector posted the steepest decline, falling 1.2%, while the ceramic and travel sectors also recorded marginal losses.

Among individual stocks, GBB Power and Tung Hai Knitting topped the gainers' list after hitting the 10% upper circuit breaker. Central Insurance and Prime Insurance also posted strong gains.

Matin Spinning was the day's worst performer, losing 4.61%, followed by Ring Shine Textile and EBL First Mutual Fund.

The mixed sentiment was also reflected at the Chittagong Stock Exchange (CSE). The broad CASPI index gained 25 points to close at 15,789, while the Selective Categories' Index (CSCX) edged down 2 points to 9,621. Turnover at the port city bourse fell 20% to Tk18 crore.

Bangladesh's two leading apparel sector trade bodies - Bangladesh Garment Manufacturers and Exporters Association (BGMEA), and Bangladesh Textile Mills Association (BTMA) - have joined hands to help achieve the country's $100 billion apparel export target.

To this end, the two organisations signed a Memorandum of Understanding (MoU) at a ceremony held at the Gulshan Club in Dhaka today (4 August).

BGMEA President Mahmud Hasan Khan Babu and BTMA President Showkat Aziz Russell signed the MoU on behalf of their respective organisations.

Under the agreement, the two associations will jointly organise the Bangladesh International Textile and Apparel Machinery Exhibition (BITMA), which will be held in December.

The organisers said the exhibition and the MoU are significant steps toward creating a stronger, more innovative, environmentally friendly and technologically advanced platform for Bangladesh's textile and ready-made garment (RMG) sector.

They added that the primary objective of the international exhibition is to establish Bangladesh as a globally recognised hub for sustainable textile and apparel manufacturing by integrating state-of-the-art machinery, artificial intelligence (AI) technologies, fashion trend showcases, networking opportunities, technology transfer, skills development, sustainability initiatives, investment promotion and international partnerships across the textile and RMG industries.

Speaking at the event, BGMEA President Mahmud Hasan Khan Babu said that although differences of opinion occasionally arise between garment and textile entrepreneurs, both sectors share the same goal.

"In some cases, issues arise regarding Proforma Invoices (PIs). …A joint arbitration team may be formed to ensure that neither party dishonours the Proforma Invoice (PI) or the Letter of Credit (LC)," he said.

BTMA President Showkat Aziz Russell said the association's biennial textile machinery exhibition, previously known as DTG, would become a larger, more meaningful and internationally recognised event through the partnership with BGMEA.

Bangladesh's economic outlook remains broadly optimistic following ongoing structural reforms, greater policy flexibility and easing global energy prices, according to a latest central-bank assessment.

"Measures to revitalise distressed industries, reopen closed factories, and expand access to bank financing through targeted credit stimulus packages are expected to support job creation and stronger economic development over the medium term," says the Bangladesh Bank (BB) in its latest 'Bangladesh Bank Quarterly (BBQ)'.

The observations came as the central bank unveiled a Tk 600-billion stimulus package recently to support the struggling private sector, encourage investment and accelerate economic recovery.

The package, unveiled by BB Governor Md Mostaqur Rahman on May 23, aims to generate around 2.5 million direct and indirect jobs through sector-specific refinancing schemes and targeted credit support.

The January-March BBQ, however, said the third quarter (Q3) of the outgoing fiscal year (FY) 2025-26, presents a mixed economic picture, with the real sector facing near-term headwinds from broad-based sectoral moderation and persistent inflation, while the external sector shows relative resilience.

"The implementation of the proposed stimulus package remains slow, mainly due to inadequate utility support, particularly shortages of power and energy," Md. Ezazul Islam, Director-General of the Bangladesh Institute of Bank Management (BIBM), told The Financial Express in response to a query.

Dr Islam, a former executive director of the BB, said the government should adopt a pragmatic policy to ensure an adequate supply of gas and electricity, especially for the private industrial sector, to facilitate investment and economic recovery.

Bangladesh's economy showed slower momentum in the Q3 of FY'26, as real GDP (gross domestic product) growth moderated amid a broad-based slowdown across all three major sectors -- agriculture, industry and services, according to the BB assessment.

Inflation, however, remained elevated, warranting the continuation of a contractionary monetary-policy stance, the BBQ says, adding that the external sector demonstrated resilience, underpinned by record-high remittance inflows, despite ongoing geopolitical tensions in the Middle East.

Meanwhile, the banking sector continued to undergo structural reforms, although sustained efforts would be required to translate these initiatives into tangible improvements in overall financial health, the central bank has explained.

The quarterly health check on the economy also shows that the country's banking sector continued to navigate a challenging landscape in the Q3 under consideration, marked by deteriorating asset quality, persistent capital shortfalls, and weak profitability.

The gross non-performing loan (NPL) ratio rose to 32.26 per cent in the Q3 of FY'26 from 30.60 per cent in the previous quarter.

"Despite these challenges, funding and liquidity conditions improved, supported by stable deposit growth and a higher excess Statutory Liquidity Ratio (SLR)," the BBQ reads.

This improvement reflects subdued credit demand, cautious lending, and a stronger preference for risk-free government securities, it explains.

The central bank also has said ongoing reform initiatives and the implementation of risk-based supervision (RBS) are expected to strengthen market discipline, enhance sector resilience, and support financial stability over time.

On the other hand, inflationary pressures persisted through the Q3 of FY'26. Point-to-point headline inflation edged up to 8.71 per cent in March 2026 from 8.49 per cent in December 2025, driven mainly by stronger consumer demand during Holy Ramadan and Eid, as well as global supply disruptions stemming from conflicts in the Middle East.

Non-food inflation eased marginally to 9.09 per cent in March 2026 from 9.13 per cent in December 2025, while food inflation rose to 8.24 per cent from 7.71 per cent, reflecting higher prices for meat, fish, fruits, vegetables, and spices.

"The wage rate index rose slightly to 8.09 per cent in March 2026 from 8.07 per cent in December 2025, but remained below the inflation rate, leaving real wages in negative territory and continuing to erode household purchasing power," the BBQ explains.

Describing developments in the external sector, the BBQ concludes that Bangladesh's external outlook remains cautiously optimistic, supported by robust remittance inflows, improved financial-account performance and continued exchange-rate stability.

The world is on the verge of another bout of food inflation as wars in Iran and Ukraine along ​with El Nino create a perfect storm of higher costs and lower crop yields, the chief economist of the ‌United Nations Food and Agriculture Organization said.

Food prices were a key driver of the 2022 global inflation surge but have been relatively benign so far this year, even tempering in some places the surge caused by high energy costs.

This calm is likely to be temporary, however, as higher crude oil ​prices, the loss of fertiliser from the Gulf region, the shortage of diesel in some parts of the world ​and extreme weather are feeding through to costs and will show up in consumer prices, even ⁠if with a delay.

Costs seen accelerating by year-end, next year

"I expect that commodity prices will start to increase more now ... and ​food prices will start increasing by the end of the year, and next year for sure they will increase more," Maximo Torero ​told Reuters in an interview.

"The transmission from the commodity to the final food price is around three to six months," he said.

Although some commodity prices, such as wheat, maize and rice, have increased in recent months, most still reflect relatively good harvests, rather than likely difficulties in the coming year.

"The ​Strait of Hormuz is a problem that affects all the inputs of agricultural commodities, agricultural systems," Torero said. "Brent oil, because it's ​used for pumping, packaging, processing, and transportation. And natural gas because it's used for fertilisers."

Meanwhile, the damage inflicted by Ukraine on Russia's oil and ‌gas infrastructure curtails the export market for diesel and natural gas, both of them key inputs in food production.

Since commodity prices are global, this inflicts pain across the world, even if richer countries have more cash to buffer producers.

"You're hearing this in Europe, in the U.S., Brazil and in Asia," Torero said. "Tight margins are putting stress in planting decisions."

Indeed, even in the U.S., which is self-sufficient for ​most key inputs, without federal ​assistance farmers growing nine principal ⁠crops may lose $32 billion in 2027, the American Farm Bureau Federation, an industry lobby group, said.

On a per-acre basis, every crop analysed is projected to remain below breakeven in 2027, it said.

Global ​wheat and corn planting was already cut in the first three months of the Iran war, ​and some US ⁠producers have shifted to soybeans, because they require lower fertiliser inputs.

Australia, one of the world's top crop exporters, recently said that winter crop production is seen down by 21% in part because of a significant increase in both fuel and fertiliser prices and uncertainty over the ⁠availability of ​key inputs.

Meanwhile, this year's El Nino weather phenomenon is likely to be especially ​strong, significantly shifting rainfall patterns, likely impacting commodity prices and potentially pushing tens of millions into acute food insecurity.

The monsoon in India is already delayed, and below-average rainfall ​is seen this month, a potential hit for rice production that could impact global commodity costs.

The Bangladeshi taka remained one of the most stable currencies in South Asia and neighbouring economies over the past year, depreciating by just 0.59 percent against the US dollar between March 2025 and March 2026, according to the Bangladesh Bank quarterly report.

The central bank’s latest data showed that only Cambodia performed slightly better, with its currency weakening by 0.44 percent during the period.
Among the peer countries, India experienced the sharpest depreciation, with the rupee losing 8.94 percent of its value against the US dollar.The Sri Lankan rupee depreciated by 5.11 percent, followed by the Philippine peso at 3.70 percent and the Indonesian rupiah at 2.67 percent.

In contrast, the Chinese yuan appreciated by 5.14 percent, making it the strongest-performing currency among the countries compared. The Pakistani rupee also posted a modest appreciation of 0.39 percent against the US dollar.

Officials at the central bank said that the relatively limited depreciation of the taka came after Bangladesh Bank adopted a more market-based exchange rate regime and tightened monetary and foreign exchange management to reduce volatility in the currency market.

In May last year, Bangladesh adopted a market-based exchange rate regime to meet a condition by the International Monetary Fund (IMF).

The central bank has also been able to rebuild foreign exchange reserves through stronger remittance inflows and improved export earnings, helping ease pressure on the local currency.

After the fall of the Awami League-led government in August 2024, remittance inflows continued to rise, and the BB was able to build its forex reserves, according to BB officials.

As of July 30, the foreign exchange reserves (BPM6) stood at $31.60 billion, up from $24.86 billion during the same period last year, according to Bangladesh Bank data.

Over the past year, the exchange rate of the US dollar against the local currency has hovered between Tk 122 and Tk 123, indicating a stable currency.

Industry insiders said that a relatively stable exchange rate can help contain imported inflation by reducing the cost of essential imports such as fuel, food, and industrial raw materials.

However, in recent months, the US dollar has continued to strengthen against the taka amid increased demand for foreign currency to settle import bills.

On August 4, the interbank exchange rate of the US dollar stood at Tk 123.81, up from Tk 123.69 per dollar a few days earlier, according to Bangladesh Bank data.