The Bank of Japan raised interest rates today (19 December) to levels unseen in three decades and signalled its readiness for further hikes, taking another landmark step in ending decades of huge monetary support and near-zero borrowing costs.

It also removed language that growth and inflation will stagnate due to the impact of higher US tariffs, underscoring the central bank's conviction that Japan was on course to stably hit its 2% inflation target backed by wage gains, and ready for a continued normalisation of monetary policy.

"Judging from recent data and surveys, there is a high chance the mechanism in which wages and inflation rise moderately in tandem will be sustained," the BOJ said in a statement in explaining the rate-hike decision.

"Given that real interest rates are at significantly low levels, the BOJ will continue to raise interest rates" if its economic and price forecasts materialise, it said.

In a widely expected move, the BOJ raised short-term interest rates to 0.75% from 0.5% in the first increase since January. The decision was made by a unanimous vote.

The move takes interest rates to levels unseen since 1995, when Japan was reeling from the burst of an asset-inflated bubble that drew the BOJ into a prolonged battle with deflation.

The central bank offered a slightly more upbeat view on the economy than at its previous meeting in October, saying it was likely to "grow at a moderate pace". In October, it said growth was likely to stagnate due to the impact of US tariffs.

Underscoring its optimism on the price outlook, it also tweaked its language on underlying inflation to say it will continue to gradually heighten, in contrast to the view in October that it will stagnate for the time being.

But Governor Kazuo Ueda remained vague on the exact timing and pace of future interest rate hikes.

"As for the pace of how we adjust our monetary support, that will depend on economic, price, financial developments at the time," he said in a press conference. "We will update at each meeting our views on the economic, price outlook as well as risks and the likelihood of achieving our forecasts, and make an appropriate decision."

The yen slid, the Nikkei stock average rose and the benchmark 10-year government bond yield jumped to a 26-year peak after the policy announcement.

In the statement, the BOJ maintained its view that underlying inflation will converge around its 2% target in the latter half of its three-year projection period through fiscal 2027.

But hawkish board members Hajime Takata and Naoki Tamura dissented to this view. Takata said underlying inflation has already achieved the target, while Tamura said it would do so as soon as the middle of the three-year projection period.

"It is highly likely that firms will continue to raise wages steadily next year," the BOJ said in the statement, signalling its optimism that further rate hikes would be justified.

It also said uncertainties surrounding the US economy and the impact of higher levies have declined.

Today's (19 December) hike to 0.75% would bring rates closer to levels deemed neutral to the economy, which the BOJ estimates as in a range of 1% to 2.5%, and complicate the bank's decision on how far to push up borrowing costs.

The BOJ ended a decade-long, massive stimulus last year and raised rates twice including to 0.5% from 0.25% in January on the view Japan was on the cusp of durably achieving its 2% inflation target.

With stubbornly high food costs keeping inflation above target for nearly four years, a growing number of BOJ board members have signalled their readiness to vote for a rate hike to avoid being late in addressing the risk of too-high inflation.

Date released today showed core consumer inflation hit 3.0% in November, steady from the previous month and well exceeding the BOJ's target.

Recent, which push up import costs and broader inflation, also helped the BOJ convince dovish Premier Sanae Takaichi's administration of the need for another rate increase.

The economy has shown resilience to higher US tariffs. Recent central bank showed business confidence hitting a 4-year high and many firms on course to continue offering bumper pay next year.

Bangladesh Krishi Bank (BKB) is struggling to meet its ambitious lending targets for the Cottage, Micro, Small and Medium Enterprise (CMSME) sector and, consequently, is failing to qualify for incentive financing from the Bangladesh Bank.

According to a BKB report, the bank has a target of distributing Tk12,500 crore in the CMSME sector for the current fiscal year. However, as of 27 November, the bank distributed only Tk2,363 crore, representing just 18.91% of the target.

In recognition of the CMSME sector's importance to national economic development, the Bangladesh Bank issued a circular on 17 March stating that by the end of 2025, CMSME loans must account for 25% of a bank's total outstanding credit.

The BKB was also unable to meet that benchmark. The bank's report shows that as of the end of November, its total outstanding loan balance was Tk35,337 crore, of which CMSME loans accounted for Tk6,641 crore, or 19% of the total.

Reasons for underperformance

A senior BKB official, speaking to TBS on condition of anonymity, cited several reasons for the lending deficit. "Demand for loans in the CMSME sector is low because the demand for goods and services produced in this sector has decreased, compounded by reduced market demand due to high inflation," he said.

The official added that following the current government taking charge, new loan disbursements face increased scrutiny, which is slowing the process. "It takes two to three weeks longer than before to complete a loan disbursement. This is also a reason for not meeting the target."

Missing out on refinance scheme

To encourage banks to increase their lending in the CMSME sector, the Bangladesh Bank has maintained a Tk25,000 crore pre-financing scheme. The central bank announced the continuation of this scheme on 12 November; it was originally announced in 2022 and had expired in July.

Under this special scheme, which is funded by the Bangladesh Bank's own resources, banks and financial institutions receive funds at a 2% interest rate, while the maximum interest rate for end-borrowers is capped at 7%.

It is understood that BKB's failure to meet its lending target is creating problems for the bank in accessing funds from this highly beneficial scheme.

BKB Managing Director Sanchia Binte Ali expressed dissatisfaction over the failure to meet the target at a meeting held in the first week of this month and urged officials at all levels to strive for its achievement.

Artificial intelligence is affecting the way the central bank core activities towards price and financial stability are conducted. AI is changing the financial system, productivity, consumption, investment and labor markets as mentioned in BIS Annual Report 2024. These changes have direct impact on price and financial stability. As rapid adoption of AI enables firms to quickly adjust prices in response to macroeconomic changes, central bank now must think about its implications. Central banks around the world are increasingly using AI tools in monetary policy, supervision and financial stability.

For better monetary policy, the application of AI is no longer a future-oriented idea, it is now a reality. The sooner we get ourselves ready for this, the better.

Central banks need to adapt to cope with the new challenges posed by AI and it needs to upgrade its capabilities both as an informed observers of the AI effects as well as the user of the technology itself. Central banks need to stay ahead of the impact of AI on economic activity through its effects on aggregate supply and demand. Besides this, it needs to use AI tools to deal with non-traditional data in their analytical models. Collaboration and the sharing of experiences are now the key avenues for central banks to reduce the demands on information technology infrastructure and human capital. It needs to rethink its traditional roles as a compiler, user and provider of data.

AI brings new opportunities and risks to the financial system. Artificial intelligence software, algorithms and tools are continuously being used to improve risk management, investment management, fraud detection, anti-money laundering compliance, lending, trading, payments, and customer service. But it may undermine financial stability by increasing cybersecurity risk and concentration risk. The sophisticated algorithmic trading system may cause flash crashes. Criminal organizations may identify loopholes and manipulate financial systems for illegal profit. Terrorist groups may orchestrate synchronized attack on the financial infrastructure. There is a defender's dilemma whereby the attackers just need one single vulnerability to gain the illegal advantage from the system whereby the defenders need to protect the entire financial system. This dilemma may get worse with the rapid adoption of artificial intelligence in the financial sector. The central bank needs to be very cautious about this and be prepared to tackle such challenges.

AI is traced back to the late 1950s, machine learning in the 1990s and deep learning in 2010s. Machine learning helps pattern recognition from a vast number of datasets and predict based on the pattern, deep learning works with unstructured data and acts like human brain through artificial neurons. This evolution of AI is making the central bank bound to rethink the way it works.

AI is having impact on financial system in four key areas – payment, lending, insurance and asset management. Use of AI in these four key areas helps to achieve efficiency and lower costs in back-end processing, regulatory compliance, fraud detection and customer service. But AI can trigger financial crisis as there are probabilities of the rise of herding behavior or herd mentality, rise of misleading interpretation and explainability of AI-assisted decisions, worsening of an existing crisis, scarcity of historical financial crisis data, risk of digital bank runs.

Data availability and data governance are a prerequisite for the implementation of machine learning and AI in central bank policy. Two most pivotal challenges for the central bank policy are model and data. Central banks need to make a balance between whether to use in-house models or external models in their policy decisions. Reliance on external models from the private sector is cost effective in the short run but it may expose the central bank to a few external providers leading to concentration and operational risk to innovation and economic dynamism. Some of the biggest challenges in the implementation of AI in the central bank policy are data governance framework, tradeoff between off-the-shelf model and in-house model, set up of necessary IT infrastructure, lack of computing power, storage and software, lack of training for the staff, hiring and retaining staff, rising cost of commercial data.

To resolve these challenges, the most immediate need is sound data governance practices. Developing country central banks lag in data governance compared to those of the developed country. Central banks need to develop a community of practices to share knowledge, data, best practices and AI tools to overcome these challenges. For the better monetary policy implementation and maintenance of central bank dual mandate, the application of AI is no longer a future-oriented idea, it is now a reality. The sooner we get ourselves ready for this, the better it will be for the central bank.

Moazzem was a former deputy director at the central bank of Bangladesh.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.

The auditor of listed textile company Metro Spinning has identified a dividend shortfall of Tk1.40 crore in the firm's designated bank account, citing regulatory non-compliance and financial stress.

In his audit report, AK Gulam Kibria, partner of G Kibria & Co, Chartered Accountants, said Metro Spinning has a dividend payable amounting to Tk1.56 crore.

Dividend payable is a short-term liability on a company's balance sheet, representing profits declared by the board of directors to be paid to shareholders but not yet distributed in cash.

The auditor said the cash should be reserved in a separate bank account. Against the payable amount, the company has a balance of Tk15.64 lakh in its dividend bank account. As a result, there is a dividend shortfall of Tk1.40 crore in the company's bank account.

According to a directive of the Bangladesh Securities and Exchange Commission (BSEC), dividend payable or unclaimed dividends that remain unclaimed for a period of three years from the date of approval or the date of subscription must be transferred to the fund named the Capital Market Stabilisation Fund (CMSF).

However, the textile firm did not transfer unclaimed dividends amounting to Tk1.47 crore up to the 2019-2020 period to the said fund, which constitutes non-compliance with the BSEC directive.

In the auditor's report, the auditor drew attention to the company's financial statements.

The report said the company incurred a net loss of Tk12.23 crore during the year ended on 30 June 2025, and as of that date, the company's total retained earnings stood at a negative Tk58.37 crore.

"These events or conditions, along with other matters, indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern," the auditor said.

Shares of Bangladesh Welding Electrodes Limited (BD Welding) surged nearly 96% over the past month as investors reacted to the company's disclosure that it is actively seeking a new investor to revive its long-shuttered operations.

From 16 November to 17 December, the share price of the Dhaka-based manufacturer jumped from Tk6.90 to Tk13.50, reflecting renewed market interest following regulatory disclosures about the company's turnaround efforts.

On Thursday (18 December), the stock closed 2.22% lower at Tk13.20 on the Dhaka Stock Exchange (DSE).

The rally gained momentum after BD Welding responded to a DSE query on 27 November, confirming that it is in discussions to attract fresh investment to restart production.

The company said its board is hopeful that bringing in a new investor would allow it to reopen its factory, rehire workers and gradually stabilise its financial position.

BD Welding, which was listed on the stock exchanges in 1999, has not been in production since 2016. The company had regularly paid annual listing fees until 2012, but mounting operational and financial difficulties from 2013 onward led to significant arrears, which it is now seeking to clear in instalments once operations resume.

The company's troubles stem largely from repeated natural disasters at its former factory in Chattogram. Until 2017, the facility was hit by recurrent flooding and landslides, at times remaining under five to six feet of water.

These events caused extensive damage to raw materials, finished goods and machinery. Although the assets were insured with Federal Insurance Company Limited, the insurer rejected the claims, prompting BD Welding to file a lawsuit.

While the company was awarded Tk2 crore in damages by a district court, the insurer appealed the verdict, and the case remains unresolved.

The prolonged shutdown also triggered loan defaults, leading banks to initiate auction proceedings against the factory. The then managing director managed to halt the auction, and following an extraordinary general meeting, the company sold the Chattogram factory land – excluding buildings and machinery – to repay its bank liabilities.

BD Welding later purchased land in Dhamrai, Dhaka, and shifted its machinery there. However, a lack of funds prevented the construction of a factory shed and reinstallation of equipment, leaving production suspended. Apart from two office staff, all employees were placed on unpaid leave.

In 2021, the Bangladesh Securities and Exchange Commission intervened by appointing independent directors and restricting the sale or transfer of company assets.

Following a reconstitution of the board, those restrictions were eventually lifted, allowing the transfer of the Chattogram property to be completed.

The Dhaka Stock Exchange extended its losing streak for a fourth consecutive session today (18 December), with market observers pointing to continued inactivity from institutional investors as a key factor behind the deepening downturn.

The benchmark DSEX dropped 22 points to close at 4,831, taking the cumulative loss over the last four trading days to 132 points. The prolonged sell-off wiped out an estimated Tk10,500 crore from the market capitalisation, underscoring the fragile state of investor confidence.

The blue-chip DS30 index also ended lower, shedding 9 points to settle at 1,859.

Turnover, a key indicator of market participation, slipped 19% from the previous session to Tk303 crore, reflecting thinning liquidity and cautious trading behaviour.

Of the traded issues, only 69 advanced while 254 declined and 68 remained unchanged, highlighting broad-based selling pressure across the board.

Market analysts said the bourse remained under stress as political uncertainties continued to weigh heavily on sentiment, keeping large investors away from active participation.

While investors have drawn some optimism from the announcement of the national election schedule and expectations of polls being held in February, the absence of strong institutional buying has prevented any meaningful recovery.

The announcement of the return date of BNP acting chairman Tarique Rahman has also been viewed positively by parts of the market.

However, recent incidents signalling deterioration in law and order, including the assassination attempt on Inqilab Moncho spokesperson Osman Hadi, have renewed concerns and added to risk aversion, analysts noted.

Chief executives of several leading brokerage houses and merchant banks said institutional investors remain largely inactive, preferring to stay on the sidelines until the political and economic outlook becomes clearer.

According to them, there is little fresh demand for shares, while selling pressure persists, particularly from margin accounts, as falling prices trigger forced adjustments. This imbalance between supply and demand has accelerated the downward momentum.

Sector-wise, all major large-cap sectors closed in the red. Food and allied stocks led the decline, followed by losses in fuel and power, Engineering, telecommunication, pharmaceutical, banking and non-bank financial institutions.

Analysts said the lack of institutional support has made it difficult for fundamentally strong stocks to find buying interest, even at lower valuations.

Despite the overall bearish tone, a handful of stocks managed to post gains, largely driven by speculative interest rather than fundamentals.

Familytex and Prime Finance topped the gainers' list, while Tung Hai Knitting, Progressive Life Insurance and BIFC also closed higher.

On the losing side, CVO Petrochemical suffered the steepest fall, followed by Shurwid Industries, Shyampur Sugar, SK Trims and Nurani Dyeing.

The Chittagong Stock Exchange mirrored the Dhaka market's weakness. Its CSCX index fell 38 points to close at 8,403, while the CASPI dropped 69 points to 13,624. Turnover at the port city bourse plunged 22% to Tk4.51 crore, indicating similarly muted participation.

City Group has extended a lifeline to its struggling listed subsidiary Rahima Food Corporation Ltd by bringing it back into operational activity through a contract manufacturing arrangement with City Edible Oil, offering fresh hope for the long-idle company and its shareholders.

In a price-sensitive disclosure, Rahima Food said its board approved a five-year contract manufacturing agreement with City Edible Oil, a sister concern of City Group, at a meeting held on 18 December. Under the agreement, Rahima Food will use its existing bottling capacity to manufacture bottles for City Edible Oil products. The contract may be extended after the initial five-year term, subject to mutual agreement.

The move is widely seen as City Group's strategic intervention to utilise idle assets at Rahima Food and gradually restore its operations after months of complete shutdown. Rahima Food's factory, located in Narayanganj, has remained non-operational following the suspension of its cashew nut processing plant in August and the closure of its coconut oil plant in July.

Investors appeared to anticipate the turnaround well before the official disclosure. Rahima Food's share price surged by about 53% between 14 November and 15 December, rising to Tk144.8 amid market speculation over potential support from the sponsor group, according to the market insiders.

On Thursday, the stock closed at Tk138.30 on the Dhaka Stock Exchange (DSE).

City Edible Oil, which was incorporated in 2019, is part of City Group's fast-moving consumer goods portfolio. By outsourcing bottle manufacturing to Rahima Food, the group is effectively internalising part of its supply chain while helping a listed group company resume revenue-generating activity without fresh capital expenditure.

Rahima Food has a long operating history but has struggled in recent years to stabilise its business lines. Incorporated in 1990 and listed on the stock exchanges in 1997, the company came under City Group's ownership in 2017.

In 2022, it ventured into new segments by introducing coconut oil and cashew nut processing plants, aiming to diversify beyond its legacy food operations.

Those expansion plans, however, ran into difficulties. The coconut oil plant, which started production and marketing in February 2022, failed to achieve the desired market penetration over the following three years. In a disclosure issued earlier, the company said production was temporarily paused on 1 July to reassess strategies for optimising both production and marketing, describing the initiative as a learning experience rather than a failure.

The cashew nut processing plant initially performed better, generating what the company described as "encouraging profits" over the past three years.

But in August, Rahima Food announced the suspension of production with immediate effect after unfavourable climatic conditions disrupted raw material supply from local growers. With stocks depleted and procurement constrained, the company said it had no option but to halt operations temporarily while exploring alternative sourcing channels.

Following these closures, Rahima Food effectively became non-operational. The developments triggered sharp volatility in its share price. Before the factory closure announcements, the stock had jumped by about 160% between June and August, reaching Tk168.9. After disclosures about the shutdowns, the price corrected sharply, falling by roughly 44% to Tk94.5, reflecting investor concerns over the company's future.

Against this backdrop, the new contract manufacturing deal marks a critical turning point. Market insiders say City Group's decision to route part of its bottling work through Rahima Food allows the company to generate steady operational income using existing facilities, without the risks associated with launching new consumer brands or sourcing volatile raw materials.

The arrangement also aligns with Rahima Food's earlier plans. In 2022, the company had announced its intention to build a bottling plant for soybean oil and mustard oil, signalling a strategic focus on bottling and packaging. Commercial operations from that bottling setup are now expected to commence very soon, supported by assured demand from City Edible Oil under the contract.

Financially, Rahima Food has been under pressure. In the July–September quarter, its revenue plunged by 77% year-on-year to Tk0.67 crore, while it incurred a loss of Tk0.10 crore due to the lack of operational activity.

For the full FY25, the company reported a 40% drop in revenue to Tk9.26 crore, while profit fell 48% to Tk1.11 crore. Despite the downturn, the board recommended a 2% cash dividend for FY25, a move that analysts interpret as an effort to maintain investor confidence.

Analysts say the contract manufacturing deal could help stabilise cash flows and gradually improve financial performance, though a full turnaround will depend on execution and scale. "This is a classic example of sponsor support in a stressed listed company," said a market analyst. "City Group is not injecting cash directly, but by providing business, it is ensuring capacity utilisation and operational continuity."

To ease congestion caused by space constraints and disruptions following a fire incident, the government has taken an initiative to introduce alternative customs clearance facilities outside Dhaka's Hazrat Shahjalal International Airport to expedite the release of courier and air express consignments.

Sources said the Chief Adviser's Office, the National Board of Revenue (NBR), and the Bangladesh Investment Development Authority (Bida) have begun working on launching alternative customs pathways for courier services.

A stakeholder meeting on the issue was held on 10 December at the Bida office, chaired by Lutfe Siddiqi, special assistant to the chief adviser. Representatives from import-export business associations and air express delivery service providers were also present.

According to Bida officials, under the proposed system, goods arriving at the airport will be transferred – while sealed and under direct customs supervision, tracking, and monitoring – to licensed and secure facilities located within 20-25 kilometres of the airport. Unpacking and customs clearance will be completed at these facilities, after which courier companies will deliver the consignments to customers.

The initiative is expected to reduce cargo congestion inside the airport, lower security risks, and minimise the likelihood of accidents such as fires in the future.

When contacted, NBR Chairman Md Abdur Rahman Khan told The Business Standard on Thursday, "Discussions are ongoing on launching alternative customs pathways for courier services, but nothing has been finalised yet. We are ready to provide all necessary facilities to make trade easier."

Following the 10 December meeting, Lutfe Siddiqi wrote in a Facebook post: "My colleagues in NBR and Bida have been working night and day to design alternative customs pathways for courier services at the airport. It is heartening to see all parties – both within government and private sector buyers, sellers and agents – working constructively together to help reduce the logjam."

Bida Executive Member and Head of Business Development Nahian Rahman Rochi told TBS, "Airport congestion has long been a concern for major investors and was further exacerbated following the recent airport fire incident. We appreciate NBR's proactive approach and look forward to stakeholders working collectively to review the proposed alternative and recommend a way forward for timely implementation."

He added that Bida's role is to facilitate coordination among stakeholders as the issue poses a significant challenge for investors.

Cargo clearance operations inside Dhaka airport have been severely disrupted since the fire incident, leaving businesses unable to clear samples and low-value consignments on time.

Industry insiders noted that countries like India, Vietnam, Japan and South Korea already operate similar off-airport customs clearance systems to ensure faster deliveries. NBR has reportedly drafted a proposal to introduce the system in Bangladesh, though businesses insist that clearance facilities should be located within 20-25 kilometres of the airport.

A business representative who attended the meeting told TBS, "After the fire incident, airport clearance has been taking two to six days. If alternative customs pathways are introduced, clearance time will be significantly reduced."

An NBR official said that globally, most countries do not conduct full cargo clearance within airport premises. Instead, clearance is handled at designated off-airport facilities to reduce congestion and security risks. Taking this into account, the NBR has proposed a new model similar to the off-dock clearance system used at Chattogram Port.

Sources said that at the "Air Express Service Delivery" meeting, the NBR informed stakeholders that it has proactively drafted guidelines to facilitate air express shipment clearance at pre-approved locations outside the airport.

The draft guidelines have been shared with customers, clearing and forwarding agents, industry bodies, and air express operators. Implementation will depend on stakeholder feedback and consensus, given the urgency and cross-sectoral nature of the issue.

From the government's side, the regulatory framework is already in place, and stakeholders are expected to review the guidelines and submit specific recommendations to NBR to enable swift implementation.

Sources noted that while systemic challenges usually take time to resolve, NBR's prompt and proactive response has been widely appreciated by the industry. The proposed framework is also expected to address long-standing concerns of international buyers, as off-airport air cargo clearance is a globally accepted practice.

The initiative aligns with the National Logistics Policy 2025, which emphasises reducing lead times for imports and exports.

Kabir Ahmed, president of the International Air Express Association of Bangladesh, said the system is widely used across the world and welcomed the move. However, he stressed the need for clearly defined criteria so eligible service providers can automatically qualify.

He added that the criteria should not be tailored to benefit specific firms and suggested forming a consortium of six to seven freight forwarders or express service providers to operate the system jointly. He also reiterated that the facility should be located within 25 kilometres of the airport.

Kabir further said service providers should be able to take custody of cargo within two hours of aircraft landing, with recovery completed within another two hours. A policy framework ensuring bonded tracking facilities would be required, as freight forwarders would provide bank guarantees and bear accountability, including advance payments to customs if necessary.

He noted that the model follows international standards, allowing for pre-clearance and bonded delivery even before taxes or duties are paid. Similar systems are already operational in India, Cambodia and other countries, helping reduce airport congestion, speed up customs processes and improve investor confidence.

NBR sources said stakeholders were given time until the end of the week to submit written feedback, after which the guidelines and regulations will be finalised.

A senior manager from an RMG company attending the meeting said the initiative is welcome but requires further study.

"Air consignments are critical for the RMG sector, as most shipments involve finished products and must be delivered within one to two days. Buyers allow an ex-factory lead time of 25-35 days, making efficient airport customs clearance vital."

He suggested strengthening and fully automating the airport import inspection section, adding that officers should verify bank proforma invoices against commercial invoices and conduct physical inspections where necessary. He also proposed installing a large display screen in the import area highlighting fraud or document mismatches to deter violations.

The government increased its borrowing through short-term treasury bills in November, issuing Tk 31,289.13 crore worth of the instruments, a 4.3 percent rise from October, according to data from Bangladesh Bank (BB).

Treasury bills are short-term loans that the government takes from banks and other financial institutions to meet immediate funding needs. They are sold through auctions conducted by the central bank and are considered one of the safest investment options in the financial system.

BB's Money Market Dynamics report shows that four such auctions were held in November. The average interest rates paid by the government stood at 9.99 percent for 91-day bills, 10.03 percent for 182-day bills, and 10.01 percent for 364-day bills.

The interest rate, known as the cut-off rate, is the highest rate the government agrees to pay in an auction and reflects demand for the bills as well as overall liquidity conditions in the banking system.

For the 91-day treasury bills, the cut-off rate fell during the first three weeks of November, reaching a low of 10.07 percent, before edging up to 10.14 percent in the final auction.

According to the BB report, the rate in the first auction of the month was 10 basis points lower than the previous one.

In the case of 182-day bills, the cut-off rate jumped by 30 basis points in the second week of the month but declined gradually in the remaining auctions.

By contrast, interest rates on 364-day treasury bills rose steadily throughout November, climbing from 9.99 percent to 10.25 percent by the final auction.

Chattogram customs house, the country's largest revenue-collecting entity, posted a 9 percent year-on-year rise in revenue in the first five months of the current fiscal year, but still fell short of its target.

The house collected Tk 31,602 crore in revenue during the period, up from Tk 29,001 crore in the corresponding months of the previous fiscal year, according to official data.

Despite the increase, revenue collection was 13 percent below the target of Tk 36,260 crore set for the period.

Officials attributed the shortfall to reduced imports of certain goods and the impact of government duty exemption policies, which limited revenue growth.

Data showed that imports rose sharply during the period, increasing by 63.97 lakh tonnes, or 18.47 percent year-on-year.

According to the National Board of Revenue (NBR), total imports during the first five months of the current fiscal year stood at 4.10 crore tonnes of goods worth Tk 2.22 lakh crore, up from 3.46 crore tonnes valued at Tk 1.97 lakh crore a year earlier.

Around 4,500 types of products are imported through the Chattogram customs house. But nearly 45 percent of total customs revenue comes from just 30 key items, including diesel, palm oil, coal, apples, grapes, oranges, dates, crushed stone, cement clinker, steel products, and powdered milk.

Mohammad Tafsir Uddin Bhuyan, additional commissioner of the Chattogram customs house, said higher imports of food items ahead of Ramadan helped boost revenue collection.

Stricter monitoring to curb import irregularities and quicker completion of auction procedures also contributed to the increase.

"We are hopeful of achieving our revenue target if this momentum continues over the remaining months of the fiscal year," he told The Daily Star.

Bhuyan also said several measures have been taken to boost revenue collection, including preparing a list of importers and clearing and forwarding agents previously found to be evading taxes in order to intensify scrutiny of their consignments.

"If these plans are implemented properly, the Chattogram customs house will be able to meet its annual revenue target," he added.

US antitrust agencies have cleared Nvidia's investment in Intel, according to a notice posted by the US Federal Trade Commission.

While the notice did not specify the details of the transaction, Nvidia said in September it would invest $5 billion in Intel, throwing its heft behind the struggling US chipmaker in a deal that could pose risks for rival manufacturers, Taiwan's TSMC and US-based AMD.

India signed an economic partnership agreement with Oman on Thursday to boost bilateral trade and investment as it seeks to expand Middle East ties and diversify trade to beat steep US tariffs.

Oman has offered zero-duty access on over 98% of its tariff lines, covering nearly all Indian exports, including gems and jewellery, textiles, pharmaceuticals and automobiles, the Indian trade ministry said in a statement.

India, in turn, will cut tariffs on about 78% of its tariff lines, covering nearly 95% of imports from Oman by value.

India and Oman have annual trade of more than $10 billion.

The relationship is important for New Delhi as the Gulf nation is a gateway to the narrow Strait of Hormuz between Oman and Iran, a major transit point for global oil shipments.

"This (pact) will set a new pace of our trade, add new trust to our investments and open doors to new opportunities in many sectors," Indian Prime Minister Narendra Modi said in an address in Oman today.

The pact, India's second after one with the United Kingdom this year, will help Indian goods enter new markets as exporters intensify diversification efforts to defy US President Donald Trump's punishing tariffs.

Oman's first bilateral agreement since 2006

This is Oman's first bilateral agreement since its 2006 deal with the United States.

After talks fell apart, Trump doubled duties on Indian goods to 50% in late August, the highest in the world. The hike included a 25% levy that was in retaliation for India's purchases of Russian oil.

Despite negotiations, New Delhi has been unable to close a deal with the U.S. or the European Union this year, as initially intended.

The deal is "as much about geopolitics and regional presence as it is about tariffs," said Ajay Srivastava, founder of the Global Trade Research Initiative.

The pact will boost gem and jewellery exports which could rise from $35 million to about $150 million over the next three years, said Kirit Bhansali, chairman of Gems & Jewellery Export Promotion Council.

Sensitive items including dairy, tea, coffee, rubber and tobacco have been kept out of the pact. The pact also offers an opportunity in Oman's $12.5 billion services import market, in which India currently holds just a 5.3% share, the statement said.

Foreign investors pulled more money out of the stock market in the first four months of fiscal year (FY) 2025-26, as political uncertainty made them cautious about putting fresh funds into shares.

Net foreign investment in listed stocks stood at minus $66 million during the July-October period, according to Bangladesh Bank (BB) data, meaning overseas investors sold more shares than they bought.

In the same four-month period a year earlier, net outflows were much smaller at minus $9 million.

Market insiders say concerns over the financial sector have added to uncertainty around the country's political landscape.

Saiful Islam, president of the DSE Brokers Association of Bangladesh (DBA), said foreign investors are worried that stress in parts of the banking sector could spread more widely.

He said only four to five banks are relatively stable, while the rest are under pressure. This has weakened confidence in financial stocks.

The central bank is merging five listed banks after their conditions were found beyond repair. The BB is also working on liquidating nine non-bank financial institutions, eight of which are listed. These developments have added to investor nervousness.

At the same time, Islam said high inflation has hurt consumer spending, limiting the earnings potential of consumer goods companies and reducing their appeal to foreign funds.

According to him, foreign investors have also found limited reasons to stay in the market due to a lack of new and attractive companies.

"Some listed firms are performing reasonably well, but many have weak dividend records," said Islam, also a director of the BRAC EPL Stock Brokerage.

Most of all, no large, well-run companies have entered the market in recent times, which could draw fresh foreign interest, he added.

In the last one year, no initial public offering (IPO) has been approved, although the chief adviser of the interim government in May asked the authorities for listing state-owned enterprises.

Islam, whose brokerage house deals with foreign investments, also pointed to poor communication and weak governance at many listed firms.

Foreign investors often do not get timely updates or meaningful access to company management, which discourages long-term

investment.

Meanwhile, some other market operators say foreign investors are cautious partly because of earlier policy moves that disrupted trading.

Mohammed Rahmat Pasha, chief executive and managing director of UCB Stock Brokerage, said the political atmosphere around the next national elections is a key concern.

"Until a democratically elected government takes charge, most long-term foreign investors prefer to stay away," he said, citing fears of unrest and sudden economic disruptions.

According to Pasha, investors are also still wary after the imposition of floor prices in 2020 and again in 2022, which kept prices artificially high. The policy made much of the market illiquid, as many shares became hard to trade.

As a result, foreign investors faced losses and compliance issues with their own regulators, who discourage investment in illiquid markets, said the UCB Stock Brokerage MD.

He said that although floor prices were lifted after the new commission took office in August last year, confidence has yet to fully return.

The BB data show foreign investors pulled out $150 million from the stock market in FY 2024-25. The outflows in FY 2023-24 amounted to $343 million.

Brokers say many foreign funds now see value in several stocks at current prices, but cheap valuations alone are not enough.

According to them, a steady return of foreign investment will depend on political stability, predictable market rules, better company governance and a pipeline of quality new listings.

Brokers said market participants said if a credible election is held and policy direction becomes clearer, foreign investors are expected to come back gradually rather than in one rush.

The Bangladesh Securities and Exchange Commission (BSEC) has approved Eastern Bank PLC's proposal to issue a Tk800 crore subordinated bond, paving the way for the private commercial bank to further strengthen its capital base under the Basel III framework.

The approval was granted at a commission meeting held on Wednesday, according to a press release issued by the securities regulator.

With the green light from the BSEC, Eastern Bank will now be able to raise long-term funds through the capital market to reinforce its Tier-2 capital and support future business growth.

According to the press release, the bond will be unsecured, non-convertible, fully redeemable and coupon-bearing, with a floating interest rate structure. The coupon rate will be set at a reference rate plus a margin of 3%. Each bond will have a face value of Tk10 lakh.

Eastern Bank plans to issue the bond through private placement, targeting corporate entities, high net worth individuals, banks, non-bank financial institutions and insurance companies.

The bond will also be listed on the Alternative Trading Board (ATB) of the stock exchanges, allowing for secondary market trading.

DBH Finance has been appointed as the trustee of the bond, while EBL Investment Limited will act as the arranger for the issuance.

The bond issuance comes at a time when Eastern Bank has been reporting solid financial performance. On a solo basis, the bank reported a profit of Tk627 crore in the first nine months of 2025, representing a 20% growth compared to the same period of the previous year.

According to the bank's disclosures, a strong emphasis on asset quality has enabled Eastern Bank to maintain a non-performing loan (NPL) ratio of 3.07% as of September 2025, significantly lower than the industry average.

The bank has also maintained excess provisions of Tk144 crore over the required loan loss provisions to enhance its shock-absorbing capacity under stressed scenarios.

Eastern Bank's operational efficiency also remained strong, with a cost-to-income ratio of 41.17%, reflecting prudent cost management practices.

For the year 2024, the bank declared a 17.50% cash dividend along with a 17.50% stock dividend. In that year, it reported a consolidated net profit of Tk660 crore and earnings per share of Tk4.86.

Shares of Eastern Bank closed at Tk23.30 on the Dhaka Stock Exchange today.

The Bangladesh Securities and Exchange Commission (BSEC) has initiated a wide-ranging investigation into mutual funds and special purpose vehicles managed by Bangladesh RACE Asset Management PCL, citing long-standing allegations of irregularities, weak governance and risks to investors' interests.

To conduct the probe, the market regulator has formed six investigative committees tasked with scrutinising the operations, transactions and governance of the funds managed by RACE, which collectively oversee assets worth around Tk3,500 crore.

According to BSEC officials, the Market Intelligence and Investigation Division issued a formal order on 27 November, although the committees began their work only last week. The investigation teams have been instructed to complete their inquiries and submit separate reports to the Commission within 60 working days.

BSEC Spokesperson Abul Kalam told TBS that the original three-member committee, formed on 10 November, was dissolved and replaced with six larger committees. These committees will submit their reports to the Commission within 60 days, after which BSEC will take the necessary follow-up actions.

In a letter to the company, the BSEC noted that two shareholder-directors, Chowdhury Nafeez Sarafat and Hasan Taher Imam, are under investigation by the Anti-Corruption Commission (ACC) for alleged corruption, embezzlement, and financial irregularities. Travel bans have also been imposed on them. This situation has raised serious concerns about corporate governance and the safety of the funds under the company's management.

According to the BSEC, under such circumstances, the funds managed by RACE are in a vulnerable and uncertain position. To protect the interests of the capital market, investors, and unit holders, a comprehensive investigation into the company's mutual funds has become necessary. As part of this, all funds, including the EXIM Bank First Mutual Fund and First Bangladesh Fixed Income Fund, are under investigation.

AKM Mamunur Rashid, executive vice president of the company, told this newspaper, "We are aware of this matter. We are trying to cooperate with the investigation committee.

As per BSEC's Terms of Reference (ToR), the investigative committees will review all bank accounts – active, dormant, and closed – of the mutual funds to identify any unauthorised or illegal transactions. Additionally, all block market trades executed on the Dhaka and Chittagong stock exchanges from 1 January 2017 to the present will be examined.

The committees will also review all Beneficiary Owners (BO) account transactions and portfolio statements. Investments, excluding Best Holdings Limited, will be checked for compliance with relevant laws and regulations. Corresponding cash flows, income, and current performance of the investments will be verified, and it will be assessed whether the Net Asset Value (NAV) has been overstated due to impaired or non-performing assets.

The investigation will also verify interest and dividend income from investments, dividend distribution to unit holders, and profits from term deposits held with banks and financial institutions. Furthermore, the committees will examine whether the asset manager, trustee, custodian, independent auditor, and other relevant parties have properly discharged their duties.

The six newly formed committees include BSEC officials at the level of additional director, joint director, deputy director, and assistant director. Each committee will separately investigate the various mutual funds under RACE. Additional Director Mohammad Rokibur Rahman will coordinate among the committees, while the Market Intelligence and Investigation Division will provide necessary support.

Market observers noted that in the past, despite allegations of irregularities and legal violations against various mutual funds, strict actions were rarely taken. However, following recent political and administrative changes, the Commission is now attempting to restore order in the mutual fund sector. Investors hope that through this investigation, the true extent of alleged irregularities at RACE will be revealed and, if wrongdoing is confirmed, legal action will be taken against the responsible parties.

The International Monetary Fund said Friday that its board has approved $206 million in emergency financing for Sri Lanka, to help in the country's recovery from the devastating Cyclone Ditwah.

The natural disaster killed more than 640 people, and affected more than 10 percent of Sri Lanka's population. Floods and landslides caused by the cyclone left extensive damage throughout the South Asian island nation.

"The disaster has created urgent humanitarian and reconstruction needs, generating significant fiscal pressures and balance-of-payments needs," IMF deputy managing director Kenji Okamura said in a statement.

The IMF's emergency aid -- which comes under the Washington-based lender's rapid financing instrument -- is meant to help address these pressures, he added.

The announcement comes a day after Sri Lanka's government unveiled plans for $1.6 billion in additional spending next year to fund cyclone recovery.

While it is still early for a firm assessment, the fund's mission chief for Sri Lanka, Evan Papageorgiou, flagged a likely hit to economic activity in the short-term.

"Agriculture and tourism are key sectors in Sri Lanka's growth and are being hit the hardest," he told reporters in a briefing.

"Inflation is likely to rise due to supply disruptions, and the current account deficit will likely widen over the next year," he added.

The government had also secured a World Bank agreement to repurpose $120 million from an ongoing project for disaster recovery spending.

Separately, it got a $200 million loan from the Asian Development Bank to finance water management, the first such funding since the cyclone.

The IMF said Friday that Sri Lankan authorities are still committed to their economic reform program aided by support of around $3 billion.

A further tranche of this rescue package known as the Extended Fund Facility was coming up when the cyclone hit.

The IMF said it has deferred the fifth review of the package, with a team set to visit Sri Lanka in early 2026 to resume discussions.

It noted this deferment took place due to the time needed to assess the cyclone's economic impact and examine how an IMF-supported program can best support Sri Lanka's recovery and reconstruction efforts -- while preserving policy priorities.

The Bangladesh Securities and Exchange Commission (BSEC) has given additional time to seven more market intermediaries to ensure compliance with provisioning requirements for unrealised losses and adjustments to negative equity.

The extension will take effect after December 31, when the current deadline for compliance expires.

Under the new arrangement, some institutions have been given one more year, while others have been allowed two additional years. In certain cases, extensions have been granted all the way through 2032.

The regulatory decision came at a meeting of the BSEC on Wednesday, chaired by its Chairman Khondoker Rashed Maqsood.

According to the BSEC, the extensions were granted based on the action plans submitted by the affected intermediaries -- stockbrokers, dealers, and merchant banks -- which were subsequently endorsed by their respective boards.

The firms are Shyamol Equity Management, Synthia Securities, Mika Securities, Eminent Securities, Meghna Life Securities & Investment, BDBL Securities and SIM Capital.

BSEC spokesperson Md Abul Kalam said the market intermediaries with comparatively lower levels of negative equity would have a shorter period to regularise their positions, while those with greater levels of negative equity would have longer extensions.

So far, the BSEC has extended deadlines for 56 market intermediaries to adjust negative equity under board-approved roadmaps

"Some other market intermediaries with negative equity will need to submit their action plans by the end of this year," Mr Kalam said.

In April, the BSEC instructed stockbrokers, dealers, and merchant banks to submit implementable roadmaps by September, outlining strategies for addressing long-standing negative equity issues that have impeded market growth for over a decade.

As of October, outstanding negative equity against margin loans stood at Tk 150 billion.

Under the regulator's latest approval, the institutions must complete full provisioning and negative equity adjustment within the extended deadlines.

The BSEC said intermediaries receiving additional time must submit quarterly progress reports until the issue is fully resolved.

The firms are also required to disclose their negative equity and unrealised losses in their financial statements based on IFRS accounting standards.

The regulatory order also imposed several restrictions, including a bar on share purchases in beneficiary owner (BO) accounts with negative equity. Only share sales will be allowed in margin accounts for adjustment during the extended period.

No interest will be charged on margin loans, nor will management fees be collected from BO accounts with negative equity. Intermediaries are also prohibited from declaring or distributing dividends during this period.

Moreover, no new negative equity may be created. If unavoidable circumstances lead to negative equity, full provisioning must be completed within the relevant financial year. Any information requested by the securities regulator must be provided within seven days.

The regulator, however, relaxed a provision relating to net-worth shortfalls arising from provisioning for unrealised losses or adjusting negative equity.

"The market intermediaries that fail to keep provisions for unrealised losses and negative equity adjustment within this given timeframe will face regulatory action," said Mr Kalam.

The central bank has a plan to raise foreign exchange reserves to $35 billion within this year, Bangladesh Bank Governor Ahsan H Mansur said today.

Bangladesh's foreign exchange reserves stood at $32.48 billion as of December 17 this year, but under the International Monetary Fund's BPM6 method, the figure was $27.81 billion, according to the latest Bangladesh Bank data.

The governor said steps taken by the central bank have helped stabilise the overall financial sector, adding that governance weaknesses remain a major concern in the banking sector.

The banking regulator has been able to keep the banking sector stable and maintain public confidence despite persistent structural challenges, he said at a seminar titled "Banking Sector Reform: Challenges and Way Forward," organised by the Economic Reporters Forum in Dhaka.

"Several banks are facing huge capital shortfalls and high levels of non-performing loans (NPLs)," he said, adding that Bangladesh currently has the highest NPL ratio in the world.

However, Mansur said he hopes the situation will begin to improve soon.

"Within December, NPLs are likely to come down," he said, adding that restoring sound governance in banks is a priority, though it will take time to deliver sustainable results.

The BB governor also addressed recent consolidation moves in the sector, saying depositors of the five merged banks would get their money back soon.

He expressed hope that the merged banks would be able to make profits within their first year of operation.

On the non-bank financial institution (NBFI) sector, Mansur said nine NBFIs would be liquidated under the regulator's resolution plan.

"Shareholders of those institutions will not receive anything, but depositors will get their funds back," he said.

Fahmida Khatun, executive director of the Centre for Policy Dialogue, and Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank, also spoke at the event.

The World Bank said on Friday that it has approved $700 million in financing for Pakistan under a multi-year initiative aimed at supporting the country's macroeconomic stability and service delivery.

The funds will be released under the bank's Public Resources for Inclusive Development - Multiphase Programmatic Approach (PRID-MPA), which could provide up to $1.35 billion in total financing, the lender said.

Of this amount, $600 million will go for federal programs and $100 million will support a provincial program in the southern Sindh province.

The approval follows a $47.9 million World Bank grant in August to improve primary education in Pakistan's most populous Punjab province.

In November, an IMF-World Bank report, uploaded by Pakistan's finance ministry, said Pakistan's fragmented regulation, opaque budgeting and political capture are curbing investment and weakening revenue.

Regional tensions may surface over international financing for Pakistan. In May, Reuters reported that India would oppose World Bank funding for Pakistan, citing a senior government source in New Delhi.

Inflow of remittances witnessed a year-on-year growth of 14 percent reaching US$2007 million in the seventh days of December, according to the latest data of Bangladesh Bank (BB) issued.

Last year, during the same period, the country’s remittance inflow was $1,760 million.

During the July to Dec 17, 2025 of the current fiscal year, expatriates sent remittances of $15,045 million, which was $12,898 million during the same period of the previous fiscal year.