With a view to future expansion of operations, Olympic Industries, a listed company in the food and allied sector, has decided to purchase 19.25 decimals of land at an agreed price of Tk57.75 lakh in Narayanganj.

The company has also decided to invest Tk20 lakh in Tripti Industries as a sponsor shareholder in the name of Olympic Industries.

The board approved an investment decision in land and subscription of ordinary shares in Tripti Industries on 19 January, which was disclosed through the stock exchanges on Tuesday.

Land investment

Olympic Industries said its board approved the purchase of 19.25 decimal land under the mouza Madanpur-6 in Narayanganj district to undertake construction to accommodate future expansion of operations.

The purchaser, Olympic Industries, shall also bear the total registration costs, inclusive of value-added tax, taxes and other charges, the disclosure said.

Investment in Tripti Industries

The board of Olympic Industries has approved an investment of Tk20 lakh in Tripti Industries, divided into 2 lakh ordinary shares worth Tk10 each, as a sponsor shareholder in the name of Olympic Industries.

The proposed authorised capital of Tripti Industries will be Tk50 crore, divided into 5 crore ordinary shares of Tk10 each, while the paid-up capital will be Tk50 lakh, divided into 5 lakh ordinary shares of Tk10 each.

Previously, there was a listed company named Tripti Industries under the common management of Olympic Industries. In 2008, Olympic Industries and Tripti Industries merged, after which the business has been operating under the name Olympic Industries.

Regarding the investment in Tripti Industries, Mintu Kumar Das, company secretary of Olympic Industries, told The Business Standard: "The board has taken the decision to invest in Tripti Industries. The nature and business line will be decided after the completion of all formalities."

In FY25, Olympic Industries posted Tk2,772 crore revenue with a 6.91% growth year-on-year, and posted a profit of Tk201 crore, which was Tk183.40 crore in the previous fiscal year.

It had paid 30% cash dividend to its shareholders.

On Tuesday, its share price closed at Tk174.70 each at the Dhaka Stock Exchange (DSE).

Foreign portfolio investors today (20 January) identified capital gain tax complexities and a limited pool of quality listed companies and a sense of insecurity as major structural barriers holding back Bangladesh's capital market, urging policy reforms, mandatory listings and political stability to unlock long-term growth.

The concerns were raised at a discussion titled "Post-Election 2026 Horizon: Economy, Politics, Capital Market," organised by BRAC EPL Stock Brokerage Limited in Dhaka, where global fund managers, policymakers, bankers and political leaders exchanged views on the future of the economy and financial markets.

Matthias Martinez, a foreign investor from Sweden-based Tundra Fonder, said capital gains tax remains one of the major deterrents for foreign investors in Bangladesh, not because of the rate alone, but due to the administrative complexity involved.

"Capital gains tax creates a significant administrative hurdle for foreign investors," he said, citing Vietnam as an example of a smarter and more investor-friendly approach. "Vietnam deducts tax at the transaction level, which simplifies compliance enormously. Bangladesh needs to think along similar lines."

Martinez also pointed out that Bangladesh suffers from a poor number of investable listed companies compared to its peer economies.

Gordon Fraser from global asset manager BlackRock echoed similar concerns, stressing that easy market access and robust valuation methodologies are essential to attract large institutional funds. "Funds need clarity, liquidity and reliable valuation frameworks. Without these, it is difficult to deploy meaningful capital."

In the keynote presentation, MA Razzaque, chairman of Research and Policy Integration for Development, said Bangladesh's economic trajectory is closely linked to both political and macroeconomic transitions. "The growth prospects for the medium term remain quite strong," he noted, citing International Monetary Fund projections that place Bangladesh's growth at around 6.3% by 2030, provided political transition remains favourable.

Razzaque highlighted the challenges and opportunities arising from Bangladesh's graduation from Least Developed Country status. While the country enjoys strong global competitiveness in the garments sector due to low-cost production, he warned that post-graduation realities would require broader market access and free trade agreements.

"Poor infrastructure, complex regulations, labour rights compliance and environmental standards are not easy challenges to overcome in the short term," he said, adding that Bangladesh must carefully decide whether to delay graduation to better prepare for these structural shifts.

He emphasised that a politically mandated government is crucial to drive difficult reforms, calling the next election "extremely important" for restoring confidence and policy momentum.

Saifuddin Ahmed, commissioner of the Bangladesh Securities and Exchange Commission, said the capital market is designed to provide long-term funding and must focus on quality capital and stronger disclosure standards.

He said reforms are underway in capital issuance, mutual funds and margin rules to ensure transparency and accountability.

"We are also evolving market infrastructure through the redesign of the Dhaka and Chittagong stock exchanges following demutualisation," he added.

Amir Khasru Mahmud Chowdhury, a member of the BNP standing committee, said many of Bangladesh's economic problems stem from a lack of accountability. Expressing hope for a free, fair and transparent election, he said an elected government is essential to restore investor confidence.

"If the capital market becomes fully functional, the government can raise funds domestically instead of relying on external borrowing," he said.

Referring to Bangladesh's IMF loan, which came with stringent conditions, Khasru said, "If the country has a vibrant capital market, the government might not go to the outside for the funds to complete the development projects."

Speakers argued that reform should focus on deregulation rather than further tightening.

Despite these challenges, they maintained that Bangladesh remains relatively well-positioned compared to peer countries, provided reforms are implemented and political legitimacy is restored. "Without an elected government, investors will not gain confidence," one panellist said, adding that accountability is the foundation of market trust.

The discussion also underscored the need for an independent and capable regulator.

Mashrur Arefin, managing director of City Bank and president of the Association of Bankers, Bangladesh, said reforms in the banking sector are ongoing but have sometimes created unintended consequences, such as investor losses from recent bank mergers.

The National Board of Revenue (NBR) posted a 14 percent growth in revenue collection in the first half of the current fiscal year (FY), yet missed the target for the period by a staggering Tk 46,000 crore or nearly 10 percent.

The development raises questions whether the board would be able to meet its hiked target for the year as experts and officials point out the latest growth is not remarkable, rather a recovery from last year’s turbulence amid a more stable political and business climate.

The revenue board has failed to meet its annual target for at least a decade as of last year.

In the July-December period of FY2025-26, NBR logged Tk 185,229 crore, according to the board’s provisional data.

All three main revenue streams contributed to the rise. Local level value-added tax (VAT) collection reached Tk 70,493 crore, up from Tk 58,759 crore a year earlier, marking around a 20 percent increase.

Income and travel taxes rose to Tk 61,875 crore, a 14.67 percent rise on the same period last year. Customs duties from international trade increased by 6.81 percent to Tk 52,860 crore, due to higher imports following the easing of restrictions.

However, speaking on condition of anonymity, an NBR official said the half-yearly growth was “usual”, largely reflecting a low base caused by last year’s political turbulence.

He also blamed the subdued government development spending and weak private investment for missing the target.

“Slow public-sector projects have weighed on VAT and customs revenue, while cautious investment has constrained corporate tax growth,” the official said, adding that revenue gains are likely to remain modest until economic activity strengthens further.

Experts also caution that the growth is not enough to celebrate.

“A 14 percent growth sounds encouraging, but in reality, it is not a major achievement. It largely reflects a shift from negative to positive territory,” said Fahmida Khatun, executive director of the Centre for Policy Dialogue (CPD).

She said the recovery is welcome, but warned against overstating it, pointing out that last year’s revenue collection had been depressed for a prolonged period due to political unrest and broader instability.

Khatun added that the growth rate is not particularly high when compared with earlier periods of sustained positive expansion. “It shows that collections can improve with effort, but it is not something to celebrate excessively.”

Going against the usual practice and history, the interim government raised the revenue collection target for the fiscal year by 5 percent, taking the goal to Tk 588,000 crore from the original Tk 564,000 crore.

The upward adjustment followed stronger-than-expected performance in the July-September period, when revenue rose by 17.6 percent, far higher than the 4.94 percent recorded in the same period a year ago.

On the higher target, Khatun said setting ambitious goals without matching capacity has become a recurring pattern.

“This has turned into a tradition – setting ambitious targets and then failing to meet them. Repeating this only exposes institutional weaknesses,” she said.

“If the capacity to collect does not align with the target, it points to gaps in manpower, institutional strength and systems,” she added.

While revenue mobilisation must increase and the tax-to-GDP ratio improve, Khatun said achieving that would require deeper reforms, including stronger institutions, improved human resources and technological upgrades. “Without these reforms, revenue shortfalls will persist.”

A recent study by the Office of the United Nations High Commissioner for Human Rights said Bangladesh could collect taxes equal to 14 percent of its GDP, almost double the present rate of 6.6 percent.

Instead, the tax-to-GDP ratio has fallen, reflecting the country’s heavy dependence on indirect taxes and limiting funds for essential services such as education and healthcare.

Dhaka stocks extended their gains for a third consecutive session yesterday (20 January), as cautious investors remained active on both the buying and selling sides amid political uncertainty.

The benchmark DSEX index of the Dhaka Stock Exchange (DSE) gained 17 points to close at 5,109. The blue-chip DS30 index rose by 6 points to 1,970, while the Shariah-based DSES index added 7 points to finish at 1,031.

Turnover increased by 12.98% to Tk670 crore, up from Tk593 crore in the previous session. Of the 388 issues traded, 210 advanced, 109 declined and 69 remained unchanged.

According to market insiders, the stock market had become oversold after several months of decline, largely driven by political uncertainty. However, as the election draws closer, some of that uncertainty has begun to ease, encouraging a return of fresh investment.

They also noted that the market often shows a positive trend around mid-January, which has further supported investor activity. As a result, trading has picked up on both sides of the market.

Over the past year, political uncertainty and several decisions taken by the market regulator were not positively received by investors. Many investors left the market, while a large number of institutional and high-net-worth investors became largely inactive.

This prolonged weakness pushed down the prices of even fundamentally strong stocks.

Analysts said political uncertainty remains the most important factor shaping investor sentiment. As this uncertainty gradually eases, they expect the market to move in a more positive direction.

However, they added that since the situation has not fully stabilised, institutional and large investors are still staying on the sidelines, keeping trading volume below its potential level.

They believe that if policy stability is ensured and investor confidence returns, the capital market has strong potential to recover in the coming period.

Large-cap sectors showed mixed performance during the session. The telecommunication sector posted the highest gain, rising by 1.41%, followed by engineering, which advanced 0.87%. The fuel and power sector gained 0.40%, while pharmaceuticals rose by 0.39%.

On the downside, the non-bank financial institutions (NBFI) sector slipped by 0.02%, banking fell by 0.13%, and the food and allied sector recorded the biggest loss among large-cap sectors, declining by 0.45%. Block trades accounted for 4.8% of the day's total turnover.

The Chittagong Stock Exchange also closed higher. The CSCX index rose by 28 points to 8,819, while the CASPI index gained 44 points to close at 14,243, reflecting a positive mood across both major bourses.

President Donald Trump's return to office has triggered an escalating transatlantic trade dispute, centred on new US tariffs linked to Greenland and Washington's proposal to take control of the territory, according to the sources.

After resuming the presidency, Trump imposed a 10% "Greenland tariff" on imports from several European countries, including the Nordic states, Germany, France, the Netherlands and Britain. The move was framed as retaliation for the deployment of small numbers of European troops to Greenland, says the Economist.

The new levy comes on top of existing US tariffs of 15% on European Union goods and 10% on British products. Trump has also threatened to raise the Greenland-related tariffs to 25% by the summer of 2026 if European governments do not agree to a US takeover of Greenland, the sources said.

Economists estimate that the immediate macroeconomic impact of the 10% tariffs would be limited, reducing EU output by around 0.04% and US output by about 0.02%. Research cited by the sources indicates that American importers and consumers have borne roughly 96% of the cost of existing tariffs, with prices charged by European firms largely unchanged.

The effects have been uneven across sectors. Imports of industrial equipment from Europe fell by 4% in late 2025, while imports of vehicles, including cars, boats and aircraft, dropped by 32%. Luxury carmakers have been among the hardest hit, with Porsche's operating profits falling by 90% in 2025. Pharmaceutical and healthcare groups such as GSK and Novo Nordisk are also considered highly exposed, as they generate about half of their revenues in the US while maintaining a relatively smaller cost base there.

In response, the EU has prepared a range of potential countermeasures. These include more than €90 billion in retaliatory tariffs on US goods, targeting products made in Republican-leaning districts or items with readily available European substitutes.

European officials have also discussed the use of strategic export controls, such as restricting scrap metal sales to US smelters or limiting exports of products where Europe holds a near-monopoly. These include advanced lithography machines used in chipmaking, produced by ASML, as well as Airbus aircraft and certain military helicopters.

Additional options under consideration include tighter regulation of US technology companies operating in Europe, potentially excluding them from government procurement, and measures that could limit access for American financial firms to European markets.

Despite these tools, the sources suggest the United States would retain greater leverage in a prolonged economic confrontation. Washington could restrict European access to US-based cloud services, use the dominance of the dollar and the US financial system as pressure points, or impose export controls on military equipment and intelligence sharing, including support related to Ukraine.

The sources also point to a potential soft-power dimension. The United States is set to co-host the 2026 FIFA World Cup, where European and South American teams are expected to be among the tournament's main attractions. A European boycott, while unlikely, would carry limited economic cost for Europe but could deal a symbolic blow to the US administration, the sources said.

Gold climbed to a fresh record high today (20 January), scaling the unprecedented $4,700 ‌an ounce milestone as escalating geopolitical tensions boosted safe-haven demand, while silver also broke above $95 for the first time.

Spot gold gained 1.5% to $4,737.18 per ounce by 09:49am ET (14:49 GMT), after reaching a record high of $4,750.49 earlier in the day. US gold futures for February delivery climbed ‌3.2% to $4,742.70/oz. "Gold has surged deeper into uncharted territory as investors hedge ​against rising political risk," said Fawad Razaqzada, market analyst at City Index and FOREX.com.

"A softer dollar is providing an additional tailwind for precious metals, reinforcing gold's rally at a ‍time when confidence in US assets appears to be wobbling."

Wall Street's main indexes opened sharply lower today (20 January), as investors were spooked by renewed tariff threats from President Donald Trump against Europe over control of ⁠Greenland.

The remarks have heightened tensions ahead of Trump's expected meeting with global business leaders ‍in Davos, Switzerland, on Wednesday.

The US dollar was set for its largest daily fall in over a month, ‌making ‌greenback-priced gold more affordable for overseas buyers.

Gold, seen as a safe store of value during economic and political instability, soared 64% in 2025 and has added another 9.5% since the start of the year. The metal's rally has also been supported by expectations of ⁠US interest rate cuts, ⁠which reduce the opportunity ​cost of holding non-yielding bullion.

Markets are pricing in two rate cuts of 25-basis-points from mid-2026, while focus intensified after US Treasury Secretary Scott Bessent said Trump could name a new Federal Reserve chair as ‍early as next week.

"$4,800 and $4,900 are the next obvious reference points (for gold), with the key $5,000 handle standing out as the longer-term psychological target," Razaqzada added.

Spot silver slipped 0.3% to $94.37/oz, after hitting a record $95.87 earlier. ​The white metal added about 147% in 2025 ‍and has gained more than 34% since the start of 2026. Elsewhere, spot platinum added 2.8% to $2,440.94/oz, while palladium was ​down 0.7% at $1,828.39.

Bangladesh Bank (BB) has allowed a special loan rescheduling and restructuring facility for distressed export-oriented and domestic shipbuilding companies in a bid to keep the sector operational and improve loan recovery by banks.

As per a BB circular issued yesterday, borrowers will have to make a 3 percent down payment on their outstanding loan balance to qualify for the facility. They must pay 1.5 percent at the time of application and the rest within the next six months.

Defaulters will be able to reschedule or restructure their loans for up to 10 years, including a maximum two-year grace period, depending on the borrower’s repayment capacity and business prospects.

During the grace period, interest must be paid on a monthly or quarterly basis. Blocked interest will have to be repaid in instalments after the grace period ends without additional interest.

Borrowers must submit applications to their banks by June 30, 2026, along with the required down payment. On the other hand, banks have been instructed to decide on applications within 60 days of receipt.

BB has also instructed all scheduled banks to consider case-by-case applications from genuinely affected shipbuilders for special rescheduling of their classified loans as of December 31, 2025.

For loans which were rescheduled under an earlier 2023 circular, banks may grant an additional two-year extension, subject to a further 2 percent down payment.

The central bank said the move became necessary due to disruptions in global supply chains, geopolitical instability in Europe, and a global economic slowdown that hurt the cash flows of shipbuilders beyond their control.

Firms found guilty of fraud, willful default, or loan manipulation will not be eligible for the facility, BB clarified. Before approving any rescheduling, banks must conduct a special inspection to verify whether the borrower was genuinely affected by circumstances beyond their control. Islamic banks have been asked to apply the same policy in line with Shariah principles.

The circular takes immediate effect under Section 45 of the Bank Company Act, 1991.

Bankers say the move could provide breathing space to the struggling shipbuilding sector, which has significant export potential but has faced financial stress in recent years due to global market volatility.

At the end of 2024, total outstanding loans in the shipbuilding and ship-breaking industry stood at Tk 20,506 crore, of which Tk 8,031 crore had become defaulted, according to BB data.

The Bangladesh Bank (BB) is going to unveil its monetary policy statement for January to June of the current fiscal year on January 29, at a time when inflation remains elevated despite a high policy rate.

The central bank monetary policy committee is scheduled to meet this week to finalise the policy stance for the six-month period. The proposal will then be placed before the board of directors of the banking regulator for approval on January 25.

BB Governor Ahsan H Mansur will announce the policy at a press conference at the central bank headquarters.

The monetary authority, tasked with managing currency, money supply, and interest rates to maintain price stability, will unveil the policy amid renewed price pressures.

In December, Inflation rose to 8.49 percent from 8.29 percent a month earlier, according to the Bangladesh Bureau of Statistics (BBS).

Industry insiders said inflation is showing signs of heating up again despite the central bank’s tight monetary stance, pointing to supply-side constraints rather than excess demand as the primary driver of rising prices.

The central bank has kept the policy rate unchanged at 10 percent since October 2024, resisting calls from business groups for a rate cut.

Zahid Hussain, a former lead economist at the World Bank’s Dhaka office, said the central bank has little room to ease policy while inflation is high.

Cutting the policy rate at this stage could add to inflationary pressures rather than stabilise prices, he said, adding that the central bank is likely to keep the rate at 10 percent in the near term.

“Inflation is not being driven only by excess demand; supply-side bottlenecks and global supply chain disruptions are also playing a major role in keeping prices elevated,” said the economist.

On exchange rate management, Hussain said Bangladesh Bank is prioritising stability rather than allowing the taka to strengthen against the US dollar.

“Despite steady remittance inflows and improved dollar availability, the central bank is avoiding taka appreciation. While a stronger taka could have reduced import costs, it could also hurt exporters’ earnings and discourage remittance inflows, prompting the central bank to keep the exchange rate stable,” he added.

Private sector credit growth remains subdued, while short-term foreign borrowing has declined, he said. Although lower interest rates could support investment, persistently high inflation limits the scope for such moves.

“Meanwhile, Bangladesh Bank’s dollar purchases have injected liquidity into the banking system, but sluggish credit demand has contained inflationary risks for now,” he noted.

Md Ezazul Islam, director general of the Bangladesh Institute of Bank Management (BIBM), said the central bank should maintain its tight monetary stance for at least the next six months, or at least three months, to rein in inflation.

With an election schedule approaching, demand for credit is likely to rise, he said, commenting that any rate cut at this stage could add to inflationary pressure.

The Dhaka Stock Exchange extended its bullish momentum for a second consecutive session yesterday (19 January) as renewed buying interest across sectors lifted the benchmark index sharply, reflecting a significant recovery in investor sentiment after a prolonged period of market sluggishness.

The benchmark DSEX index jumped 56 points, or 1.12%, to close at 5,091, bringing the cumulative gain over the last two trading days to 133 points. This rally bolstered the market capitalisation by approximately Tk9,000 crore, highlighting the broad-based nature of the day's gains.

The blue-chip index, DS30, also posted a strong performance, rising by 25 points, or 1.33%, to settle at 1,964. Market breadth remained decisively positive, with 268 issues advancing against 72 decliners, while 54 stocks closed unchanged, indicating widespread participation in the rally.

Turnover, a key indicator of market activity, surged by 25% to Tk593 crore, marking a two-month high. The volume was close to the recent peak of Tk636 crore recorded on 25 November 2025, suggesting that both institutional and retail investors are returning to the market with increased confidence.

A managing director of a brokerage firm said the market often witnesses a rally from mid-January each year, largely driven by institutional investors stepping up their participation after year-end adjustments.

He noted that the current market levels remain attractive following a prolonged subdued phase, during which many fundamentally strong stocks traded at discounted prices. As a result, both institutional and retail investors are actively positioning themselves on the buy side.

He further added that the upcoming national election has also sent a positive signal to the market, helping to reduce uncertainty and improve overall investor confidence.

Trading activity was concentrated in several heavyweight and actively traded stocks, with Square Pharmaceuticals, Prime Bank, City Bank, BRAC Bank, and Orion Infusion featuring among the top turnover contributors for the day. These stocks played a key role in pulling the indices higher.

All major large-cap sectors closed in positive territory, reinforcing the strength of the rally. The non-bank financial institution sector led the gains with a jump of over 2%, followed by strong performances from the food and allied, pharmaceutical, and engineering sectors. Fuel and power, telecommunication, and banking stocks also posted modest but positive returns, indicating a balanced sectoral recovery rather than a narrow rally.

The upbeat trend was mirrored at the Chittagong Stock Exchange as well. The CSCX index rose by 65 points to close at 8,791, while the broader CASPI advanced 111 points to settle at 14,198. Turnover at the port city bourse stood at Tk12.33 crore, reflecting improved trading activity there too.

Gold surged past the $4,700 an ounce mark for the first time on Tuesday, and silver hovered just below a fresh record high, as global tensions sparked yet another rush to safety.

Spot gold gained 1.3 percent to $4,727.99 per ounce by 0910 GMT, having hit an all-time high of $4,731.34, while silver rose 0.7 percent to $95.34 an ounce, after hitting a record high of $95.488 earlier in the session.

US gold futures for February delivery climbed 3 percent to $4,734.10 per ounce.

US President Donald Trump threatened to impose increasing tariffs from February 1 on eight European countries until the US is allowed to buy Greenland, fuelling fears of a renewed trade war.

“Growth concerns driven by threats of additional tariffs and the desire of Trump to have lower US interest rates are the drivers pushing gold to a new record high,” said UBS analyst Giovanni Staunovo.

Gold has climbed 9.5 percent in just 20 days of this year and over 70 percent since Trump’s second term began a year ago. Geopolitical tensions have been at the forefront of the recent record rally, with expectations of monetary policy easing also playing a significant role. Strong central bank buying and ETF inflows have also contributed to the unprecedented rise.

Instability in policy and politics drives investors to store value in traditional safe havens like gold, while lower interest rates limit the downside of holding non-yielding assets.

Investors are also awaiting a decision on a Supreme Court case that could determine whether the president can dismiss Federal Reserve governors at will, concerning Trump’s attempts to fire Fed Governor Lisa Cook.

“We still see further upside for the yellow metal, targeting a price of $5,000/oz,” Staunovo said.

The growing threat of a renewed trade war between the United States and the European Union is stoking fears among Bangladeshi garment exporters that retaliatory tariffs could trigger global supply chain volatility and suppress consumer demand in their most vital markets.

Industry insiders say any escalation of tariff measures between the two economic blocs could trigger fresh inflation in the US and Europe, reducing consumer spending and, in turn, demand for Bangladeshi apparel. Such a scenario could further strain exports.

Data show that Bangladesh's overall exports, including readymade garments, have been declining for five consecutive months, while prices in the European market have also softened during the period.

Representatives of foreign buyers sourcing from Bangladesh, however, believe the immediate impact of any new tariff measures would be limited, although prolonged trade tensions could create uncertainty over the longer term.

According to a report by The Guardian, the EU's top diplomats met for crisis talks on Sunday (18 January) and discussed reviving a plan to levy tariffs on €93 billion ($108 billion) of US goods, which was suspended after last year's trade deal with Trump.

In a post on Saturday on Truth Social, US President Donald Trump said he would impose a 10% tariff on Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland beginning 1 February.

Media reports also said Trump threatens a 25% tariff on European allies until Denmark sells Greenland to the US.

Experts warn that such tariff disputes could destabilise not only transatlantic trade but the wider global trading system.

MA Rahim Feroz, vice-chairman of DBL Group – one of Bangladesh's largest apparel exporters with annual turnover exceeding $1 billion – told TBS that higher tariffs in Europe or the US would inevitably lead to inflation.

"If inflation rises, consumers will buy less, which will put significant pressure on us and negatively affect Bangladesh's exports to those markets," he said.

Echoing Feroz, Md Shehab Udduza Chowdhury, vice president of the Bangladesh Garment Manufacturers and Exporters Association, warned that imports could be affected if trade tensions intensify.

In 2025, Bangladesh exported garments worth $38.82 billion globally, with nearly 80% destined for the European Union, the US and the UK.

Exporters say Bangladesh has already felt the impact of reciprocal tariffs imposed by the Trump administration, with shipments to both the US and Europe coming under strain. They add that garment prices in the European market have declined as a result.

Feroz noted that after the US imposed higher tariffs on China and India than on Bangladesh, the two larger exporters stepped up efforts to sell more in Europe, intensifying competition and forcing Bangladeshi exporters to offer price discounts.

An analysis of Eurostat data by the Bangladesh Apparel Exchange shows that the average price of Bangladeshi apparel exported to Europe fell by 2.06% between January and September 2025. Prices of apparel from other major exporting countries also declined during the same period.

Trade experts see little upside for Bangladesh if a trade war erupts between Europe and the US.

Mostafa Abid Khan, an international trade expert and former member of the Bangladesh Trade and Tariff Commission, said he does not foresee any major short-term disruption to Bangladesh's exports or imports.

Before the latest tariff announcements, US tariffs on EU goods ranged from zero to 15%, while UK exports to the US faced a 10% tariff. US goods entering the UK are subject to a 6% tariff, and EU data show that a significant number of US products have enjoyed duty-free access to the EU since August.

Buyers remain unconcerned

Despite exporters' worries, foreign buyers say their sourcing from Bangladesh remains unaffected.

A senior official at the Dhaka office of a Sweden-based brand, speaking on condition of anonymity, said potential EU-US tariffs are unlikely to hurt Bangladeshi exports.

"We source around $250 million worth of products from Bangladesh each year, and our order flow remains normal – if anything, it may increase in the future," he said.

Similarly, the country manager of a Germany-based sportswear brand said the tariffs under discussion are selective and unlikely to affect Bangladesh directly. "However, it is still too early to say what the long-term consequences might be if such a situation persists."

Chinese capital Beijing's GDP exceeded 5.207 trillion yuan (about 743.79 billion U.S. dollars) in 2025, up 5.4 per cent year on year, surpassing the 5 trillion yuan mark for the first time, according to the municipal statistics bureau.

Oil prices were steady on Tuesday as investors monitored US President Donald Trump’s threats of higher tariffs on European states over his drive to acquire Greenland, while firmer global economic growth expectations and better-than-expected economic data from China gave a floor to prices.

Brent futures for March shed ‌11 cents, or 0.17 percent, at $63.83 a barrel at 0918 GMT, while ​the US West Texas Intermediate crude contract for February was down 49 cents, or 0.8 percent, at $58.95.

Trump’s tariff threats over Greenland will not have an immediate impact on the ‍oil balance, said PVM analyst Tamas Varga, adding that prices gained support from an upward revision of this year’s global economic growth estimate by the International Monetary Fund and stronger diesel prices.

Fears of a renewed trade war escalated over the weekend after Trump said he would impose additional ‍10 percent levies from February 1 on goods imported from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland ‌and ‌Britain, rising to 25 percent on June 1 if no deal on Greenland was reached.

CHINA DATA SUPPORTS OIL

The oil market is also finding some support from better-than-expected fourth-quarter Chinese gross domestic product data released on Monday, said IG market analyst Tony Sycamore.

“This resilience in the world’s top oil importer provided a ​lift to demand sentiment,” he said.

China’s economy grew 5.0 percent last year, the data showed, while China’s in 2025 also climbed, edging up 4.1 percent year-on-year, while crude oil output grew 1.5 percent, data from ‍the world’s top oil importer showed on Monday.

Markets are also keeping a close eye on Venezuela’s oil sector after Trump said the US would run the industry after its capture of Nicolas Maduro.

Vitol offered Venezuelan ​oil to Chinese buyers at discounts of about $5 ‍per barrel to ICE Brent for April delivery, multiple trade sources said.

The dollar headed for its largest daily fall in over a month on Tuesday, after threats from the White House to Europe over the future of Greenland triggered a broad selloff across US stocks and government bonds, and drove the euro and the pound higher.

The dollar index , which measures the US currency's performance against a basket of six others, fell as much as 0.6 percent - marking its biggest one-day drop since mid-December - as investors worried about exposure to US markets.

On Monday, US President Donald Trump's renewed tariff threats against European allies triggered a repeat of the so-called "Sell America" trade that emerged after last year's "Liberation Day" tariff announcement in April, with stocks, Treasury bonds and the dollar all declining.

US markets will return on Tuesday following a public holiday for Martin Luther King Jr. Day.

Investors were dumping dollar assets on "fears of prolonged uncertainty, strained alliances, a loss of confidence in US leadership, potential retaliation and an acceleration of de-dollarisation trends," Tony Sycamore, market analyst at IG in Sydney, said.

"While there are hopes the US administration may soon de-escalate these threats, as it has with prior tariff announcements, it is clear that securing Greenland remains a core national security objective for the current administration," he added.

The euro rose 0.6 percent to $1.1719, while the pound gained 0.35 percent to trade at $1.3474. Sterling got a minor additional lift from UK labour market data that showed unemployment remained at a five-year high, but also offered positive signs such as vacancy numbers plateauing.

In terms of investor demand for euros, the "Sell America" effect could be short-lived, Barclays strategist Lefteris Farmakis suggested.
"Tariff threats are a marginal negative for the dollar in the near-term given long positions and still-low hedge ratios from a historical perspective. That said, major escalation with NATO spill-overs is a much bigger problem for the euro than Liberation Day," he said.

In its continued effort to stabilize the foreign exchange market and build up national reserves, Bangladesh Bank (BB) purchased an additional $45 million from two commercial banks on Tuesday (January 20).

The dollars were bought at a fixed exchange rate of Tk 122.30, with the cut-off rate also set at Tk 122.30, according to a press release issued by the central bank.

This latest transaction follows a series of significant dollar purchases by the central bank this month.

On January 12, purchased $81 million from 10 commercial banks.

On January 8, purchased $206 million from 15 commercial banks.

On January 6, purchased $223.5 million from 14 commercial banks.

All these transactions were conducted at the uniform rate of Tk 122.30 per dollar. With the latest purchase on Tuesday, the total dollar procurement for the month of January 2026 alone has reached $743 million.

Arif Hossain Khan, Executive Director and Spokesperson of Bangladesh Bank, confirmed the details of Tuesday’s transaction.

He noted that the aggressive buying strategy has significantly bolstered the country’s holdings during the current fiscal year.

Data reveals that during the first six months and twenty days of FY 2025-26 (from July 1 to January 20), the central bank has purchased a total of $3.87 billion (3,878.50 million) from the interbank market.

Market analysts suggest that the central bank is taking advantage of increased dollar inflows—likely from remittances and export earnings—to replenish the foreign exchange reserves, which had faced pressure in previous years. By maintaining a steady “cut-off” rate of Tk 122.30, the regulator is also signaling a desire for exchange rate stability, preventing abrupt fluctuations that could impact inflation and import costs.

The Bangladesh Bank purchased $743 million from commercial banks through auctions during the first 20 days of January, as part of its ongoing efforts to stabilise the exchange rate.

Confirming the matter, BB Executive Director and Spokesperson Arif Hossain Khan said the central bank bought $45 million from two commercial banks today (20 January) alone.

With the latest purchase, Bangladesh Bank's total dollar buying from commercial banks through auctions in the current fiscal year 2025-2026 has reached $3.88 billion.

Speaking to reporters at a seminar yesterday, BB Governor Ahsan H Mansur said commercial banks are voluntarily selling dollars to the central bank, which has increased liquidity in the market.

He added that the rise in dollar inflows has been a key factor behind the growth in bank deposits.

The governor also noted that higher dollar inflows have helped turn Bangladesh's balance of payments financial account into a surplus. As foreign currency supply increases, deposit growth in the banking sector is also expected to accelerate, he said.

The central bank began purchasing dollars through auctions from July last year as part of its foreign exchange market intervention strategy. Under the market-based exchange rate regime, the central bank aims to maintain balance in the foreign exchange market – allowing the dollar price to fall when supply exceeds demand, while letting it rise when demand increases.

Bankers say the recent decline in dollar demand is driven by several factors. The government's large external payment obligations have eased, reducing pressure on foreign currency demand.

At the same time, sluggish business activity and weak investment have led to lower imports of capital machinery, further easing demand for dollars, they said.

The Bangladesh Bank plans to create a dedicated "resolution fund" of up to Tk40,000 crore to rescue and restructure failing banks without relying on taxpayer-funded government bailouts.

Banks will have to contribute an annual premium of up to 0.25% or 25 paisa per Tk100 of their deposits, compared to the current 0.07% charged for the deposit insurance protection fund. Over time, the fund is expected to accumulate between Tk30,000 crore and Tk40,000 crore, enabling the central bank to intervene independently when banks face serious financial trouble.

In an interview with The Business Standard, Bangladesh Bank Governor Ahsan H Mansur said the initiative is inspired by the European Central Bank's resolution framework, under which banks deposit a portion of their deposits (approximately 1%) into a separate fund specifically for bank resolution.

"Bank resolution is a continuous process. That is why we have created a separate Bank Resolution Department," he said, explaining that the department continuously monitors banks and financial institutions, flags early signs of weakness, and intervenes when necessary through restructuring, mergers, or orderly liquidation.

The governor noted that five banks are currently under resolution, a process made possible only because the government provided around Tk20,000 crore in support.

Alongside the move, the Bangladesh Bank has decided to liquidate nine non-bank financial institutions (NBFIs), the governor said. As these entities are not covered by the deposit insurance protection fund, the government will provide Tk5,000 crore to repay individual depositors, he said.

The governor explained how the resolution fund will be built gradually. "If we raise the premium from 7 paisa per Tk100 of deposits to around 25 paisa, we can mobilise nearly Tk30,000 crore within five years. Once the fund becomes strong, provisioning requirements can be reduced."

Under the amended deposit insurance ordinance 2025, insured banks are required to deposit a premium of 0.07% per annum on their deposits. The new law states that the Bangladesh Bank will set the premium from time to time based on the bank's risk level and the size of deposits.

At the same time, banks and financial institutions will face penalty interest at the bank rate if they fail to pay the premium on time. The Bangladesh Bank will prevent the banks and financial institutions from accepting deposits that fail to pay the premium twice in a row.

How resolution fund to be operated

According to the Bank Resolution Ordinance, 2025, a bank restructuring and resolution fund will be established in order to achieve the objective of the resolution and effective implementation of the resolution measures.

It states that the Bank Restructuring and Resolution Fund will have a prudent and safe investment strategy and will invest the amounts held in the fund in obligations of the government.

The ordinance mentions that the Bangladesh Bank shall prescribe the rules governing such fund, including the power to manage, administer, and supervise the Bank Restructuring and Resolution Fund; formulate policies in relation to the general administration of the Bank Restructuring and Resolution Fund; and contribute to the financing of resolutions of scheduled banks from the Bank Restructuring and Resolution Fund.

What experts say

Experts have expressed mixed reactions to its long-term impact on banking discipline.

Muhammad A (Rumee) Ali, former deputy governor of Bangladesh Bank, cautioned that the fund could end up subsidising poor governance and weak risk management, as well-run banks would effectively support weaker ones.

However, Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue, welcomed the move, saying it would reduce pressure on taxpayers. He noted that similar mechanisms were introduced in Europe and the United States after the 2007 global financial crisis.

"Such a fund discourages risky lending and encourages responsible behaviour, even though some cost may be passed on to depositors," Mustafizur said.

Syed Mahbubur Rahman, managing director of Mutual Trust Bank, described the plan as aligned with global norms but warned that its success would depend on broader reforms. "With high non-performing loans, weak enforcement and political interference, the fund risks becoming symbolic unless governance, transparency and supervision are strengthened," he said.

Mahbubur added that the proposed levy is far lower than the ECB's 1% benchmark, raising concerns about its adequacy in a crisis. "Still, if transparently managed and scaled over time, it could be a solid starting point for building financial resilience."

Sohail RK Hussain, managing director of Bank Asia, also termed the initiative a positive and necessary step. "A resolution fund based on global best practices will strengthen financial stability and reduce reliance on taxpayer support," he said, stressing the need for gradual, transparent and risk-based implementation alongside deeper banking sector reforms.

"The proposed 0.25% annual cap, including insurance premium, is reasonable, especially considering the challenges the industry is facing," Sohail said.

He emphasised that the fund will be established on a transparent and risk-based basis.

"However, this should go hand in hand with the banking sector reform proposal, addressing governance failures of the past," the Bank Asia MD added.

All three major Wall Street indexes ended Tuesday with their biggest one-day drops in three months, in a broad selloff triggered by concerns ‌that fresh tariff threats from President Donald Trump against Europe could signal renewed market volatility.

The risk-off trade was pervasive, helping vault gold to fresh record highs, and pushing up debt costs with US Treasuries wobbling under renewed selling pressure. Bitcoin, which can find favor when traditional markets waver, fell more than 3%.

All three US equity benchmarks registered their worst one-day performance since 10 October, with both the S&P 500 and Nasdaq Composite slipping below their 50-day moving averages.

The S&P 500 lost 143.15 points, or 2.06%, to ‌end at 6,796.86 points, while the Nasdaq Composite gave up 561.07 points, or 2.39%, to 22,954.32. The Dow Jones Industrial Average fell 870.74 points, or 1.76%, to 48,488.59.

Uncertainty rises

Tuesday was the first opportunity for US investors to act on Trump's weekend comments, given the market holiday for Martin Luther King, Jr. Day.

This included Trump saying additional 10% import tariffs would take effect on 1 February on goods from Denmark, Norway, Sweden, France, Germany, ‌the Netherlands, Finland and Great Britain — all already subject to US tariffs.

The tariffs would increase to 25% on 1 June and continue until a deal was reached for the US to purchase Greenland, Trump wrote in a post on Truth Social. Leaders of Greenland, an autonomous territory of Denmark, and Denmark have insisted the island is not for sale.

The reinjection of ⁠tariff threats into global markets harkens back to April's "Liberation Day," when Trump's levies on global trade partners pushed the S&P 500 to near bear market territory.

The ‍CBOE Volatility Index, also known as Wall Street's fear gauge, spiked to 20.09 points, its highest close since 24 November.

Trading volumes were also higher: around 20.6 billion shares changed ‌hands on ‌US exchanges on Tuesday, up from the 17.01 billion average for the last 20 trading days.

While investor sentiment was frayed on Tuesday, the question being asked is whether Greenland represents a knee-jerk selloff, or something that will have longer-term implications for markets.

Jamie Cox, managing partner at Harris Financial Group, said he was not seeing indications investors were fleeing.

"I'm not at the point yet where I'm willing to say what is happening with Greenland, and the resurgence of the tariff threat back ⁠and forth, is going to precipitate a ⁠correction in the equities markets," he said, adding he would be surprised if there was a 3% to 5% drop this week.

Bond markets spillover

A potentially more significant action, in Cox's eyes, would be whether Japanese authorities intervene in financial markets.

Japanese government bonds plunged on Tuesday, sending yields to record highs, while Tokyo stocks and the yen also fell after Prime Minister Sanae Takaichi's call for a ‍snap election shook confidence in the country's fiscal health.

The moves helped push the cost of longer-term European government bonds higher, while a selloff in US Treasuries was more pronounced on the long end of the curve.

Despite tariff talk, and notable bond movements, the US economy remains in a strong position.

Investors are due a host of fresh data this week on the state of the US economy, including the third-quarter US GDP update, January PMI readings and the Personal Consumption Expenditures ‍report, which is the Federal Reserve's preferred inflation gauge.

Earnings season is also kicking into higher gear, with several industry bellwethers set to report their quarterly earnings this week.

Among them was Netflix, which closed 0.8% lower before reporting earnings after the bell.

Bangladesh Bank Governor Ahsan H Mansur has expressed strong confidence in the country’s ability to meet or exceed its $35 billion foreign exchange reserve target for the current fiscal year—without depending on International Monetary Fund (IMF) disbursements.

He made the remarks while addressing a seminar titled “Understanding the Pulse of the Economy Through the Purchasing Managers Index (PMI)” jointly organised by the Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange Bangladesh at the MCCI office in Dhaka this evening.

“This will be a very comfortable level of reserve—and that too, without the IMF money,” Mansur said. “If anything comes from the IMF, it will be icing on the cake, not a necessity.”

Mansur said the macroeconomic consolidation process is ongoing and significant improvements have been made on the balance of payments and reserve fronts.

Despite challenges in exports, he highlighted gains in terms of trade due to declining global energy prices. “Import volume has increased even though payment has risen only 5-6 percent. This reflects a 30 percent drop in petroleum prices, which has translated into strength on our external side,” he added.

Chattogram Port data also show a substantial rise in import volumes—both in tonnage and container traffic—indicating robust trade activity.

The governor emphasised that Bangladesh Bank is closely monitoring a range of high-frequency indicators, such as daily exchange rates, remittance flows, interest rates, and reserve levels.

He also acknowledged the importance of newly introduced tools such as the Purchasing Managers Index (PMI), calling it a “welcome addition” to the country’s economic monitoring arsenal.

Touching on domestic liquidity conditions, Mansur pointed out that deposit growth rose from 6.4 percent in December 2022 to 11 percent in December 2023, with total deposits reaching Tk 20 trillion.

“This translates to an additional Tk 2.2 trillion in liquidity. After accounting for government borrowing, over Tk 1.2 trillion is now available for private sector credit,” he said.

He expects deposit growth to rise further to 14 percent, backed by a surplus in the balance of payments and buildup of net foreign assets—further easing liquidity pressures in the banking sector.

Mansur signaled that the lending rate to prime borrowers has already dropped by nearly 2 percentage points, ranging between 11-12 percent.

He reiterated that sustained improvement in inflation, currently above 8 percent, is critical before policy rates can be relaxed further.

“As soon as inflation drops by over 1 percentage point, we will begin rolling back the policy rate,” he stated.

Highlighting past support to the private sector amid multiple shocks—including COVID-19, exchange rate volatility, and political transitions—the governor said 1,500 out of 3,300 applications for loan restructuring have already been processed.

He warned against “shortcuts” in monetary policy that could jeopardise hard-earned stability, particularly in the foreign exchange market.

“We must not abandon a working strategy due to impatience,” he said.

The governor also emphasised Bangladesh Bank’s ongoing efforts to liberalise the foreign exchange market, including facilitating the international expansion of Bangladeshi businesses.

India's central bank has proposed that BRICS countries link their official digital currencies to make cross-border trade and tourism payments easier, two sources said, which could reduce reliance on the US dollar as geopolitical tensions rise.

The Reserve Bank of India (RBI) has recommended to the government that a proposal connecting the central bank digital currencies (CBDCs) be included on the agenda for the 2026 BRICS summit, the sources said. They requested anonymity because they were not authorised to speak publicly.

India will host the summit, which will be held later this year. If the recommendation is accepted, a proposal to link the digital currencies of BRICS members would be put forward for the first time. The BRICS organisation includes Brazil, Russia, India, China and South Africa, among others.

The initiative could irritate the US, which has warned against any moves to bypass the dollar.

US President Donald Trump has previously said the BRICS alliance is "anti-American" and he threatened to impose tariffs on its members.

The RBI, India's central government and the central banks of Brazil and Russia did not respond to emails seeking comment. The People's Bank of China said it had no information to share on the subject in response to a Reuters request for comment; the South African central bank declined to comment.

The RBI's proposal to link BRICS' CBDCs for cross-border trade finance and tourism has not been previously reported.

Building bridges

The RBI's proposal builds on a 2025 declaration at a BRICS summit in Rio de Janeiro, which pushed for interoperability between members' payment systems to make cross-border transactions more efficient.

The RBI has publicly expressed interest in linking India's digital rupee with other nations' CBDCs to expedite cross-border transactions and bolster its currency's global usage. It has, however, said its efforts to promote the rupee's global use are not aimed at promoting de-dollarisation.

While none of the BRICS members have fully launched their digital currencies, all five main members have been running pilot projects.

India's digital currency — called the e-rupee — has attracted a total of 7 million retail users since its launch in 2022 December, while China has pledged to boost the international use of the digital yuan.

The RBI has encouraged the adoption of the e-rupee by enabling offline payments, providing programmability for government subsidy transfers and by allowing fintech firms to offer digital currency wallets.

For the BRICS digital currency linkages to be successful, elements like interoperable technology, governance rules and ways to settle imbalanced trade volumes would be among the discussion topics, one of the sources said.

The source cautioned that hesitation among members to adopt technological platforms from other countries could delay work on the proposal and concrete progress would require consensus on tech and regulation.

One idea that is being explored to manage potential trade imbalances is the use of bilateral foreign exchange swap arrangements between central banks, both the sources said.

Previous attempts by Russia and India to conduct more trade in their local currencies hit roadblocks. Russia accumulated large balances of the Indian rupee for which it found limited use, prompting India's central bank to permit the investment of such balances in local bonds.

Weekly or monthly settlements for transactions are being proposed to be made via the swaps, the second source said.

Long road

Founded in 2009 by Brazil, Russia, India and China, BRICS later expanded to include South Africa and has since broadened further, adding newer members like the United Arab Emirates, Iran and Indonesia.

The bloc has returned to the limelight thanks to Trump's revived trade-war rhetoric and tariff threats, including warnings aimed at countries aligning with BRICS. At the same time, India has edged closer to Russia and China as it faced trade friction with the US.

Past efforts to turn BRICS into a major economic counterweight have run into hurdles, including an ambition to create a common BRICS currency, an idea that was floated by Brazil but was subsequently nixed.

While interest in CBDCs has been dampened globally by rising stablecoin adoption, India continues to position its e-rupee as a safer, more regulated alternative.

CBDCs "do not pose many of the risks associated with stablecoins," RBI Deputy Governor T Rabi Sankar said last month.

"Beyond the facilitation of illicit payments and circumvention of control measures, stablecoins raise significant concerns for monetary stability, fiscal policy, banking intermediation and systemic resilience," Sankar said.

India fears widespread stablecoin use could fragment national payments and weaken its digital payments ecosystem, Reuters reported in September.