Bangladesh Bank's new governor rolls out a to-do list focused on continued reforms to manage banking sector's distressed assets and reopen closed factories for economic pickup and job generation.

Bangladesh Bank will continue its reform programme to make banking services faster and more efficient for both the central bank and commercial banks, Governor Md Mostaqur Rahman told bankers Sunday.

He said the regulator would step up efforts to resolve distressed assets in the banking system--much of the money trapped in businesses and industries of embattled owners shut down amid political upheavals.

The governor made the remarks at his maiden meeting with the governing council of the Association of Bankers, Bangladesh (ABB), led by its chairman Mashrur Arefin, at the central bank headquarters.

Present at the conclave, close on the heels of reshuffle in the BB hierarchy, were 19 chief executives of commercial banks.

Mr. Arefin, managing director and chief executive officer of City Bank PLC and chairman of the ABB, billed the meeting constructive as the governor listened carefully to the concerns of bank executives while outlining his policy priorities.

"The governor was very cordial and chaired the meeting with humility and warmth," Mr Arefin told The Financial Express.

"He listened patiently to the views of all 19 CEOs and outlined several of his core priorities."

According to the leading banker, the business-tycoon-turned banking regulator emphasised the need to create a business- and manufacturing-friendly environment aimed at generating up to 10 million new jobs.

He also stressed the productive use of distressed assets arising from non-performing loans, including the reopening of closed factories.

The governor also highlighted the potential of a "one village, one product" initiative to promote entrepreneurship and exports.

Mr Arefin said citing the cheese produced in Ashtogram in Kishoreganj as a practical example, the new BB chief suggested that banks could help such locally specialised products reach global markets through district-based development initiatives.

The governor also made several commitments during discussion, according to ABB officials.

He quoted the central bank governor as saying that the executives should report any political pressure directly to him.

He also assured bankers that the central bank would respond more promptly to issues raised by ABB, with faster decisions aimed at reducing the cost of doing business.

The central bank also plans to move towards selective deregulation, beginning with allowing banks to negotiate rental and lease agreements independently within defined regulatory guidelines.

The governor also pledged efforts to facilitate the release of overdue funds related to export incentives, Export Development Fund (EDF) reimbursements and remittance incentives.

"We are professionals and we want the governor to succeed," Mr Arefin said, describing bank chief executives as key stakeholders in the reform process.

He added that bankers welcomed the governor's proposal for the central bank and commercial banks to jointly host a "Bangladesh Day" event for foreign correspondents and international lenders later this year.

ABB leaders also requested the central bank to expedite the release of remittance-related incentives and improve operational efficiency under the EDF.

Syed Mahbubur Rahman, managing director and chief executive officer of Mutual Trust Bank, who also attended the meeting, said bankers discussed the issue of lowering interest rates but stressed that borrowing costs alone would not revive investment.

"We argued that reducing interest rates is only one factor and it cannot revive the investment alone," Mr Rahman told the FE writer. "Reliable power and gas supply and other structural issues must be addressed to make business and investment more vibrant."

He said bankers also highlighted the importance of refinancing schemes, particularly for small and midsize enterprises, as a way of supporting entrepreneurs and stimulate economic activity.

The Bangladesh Bank plans to cut policy rate – a major shift from tight monetary policy after the appointment of new governor – aiming to reduce lending rate demanded by the business community.

Governor Md Mostaqur Rahman, who vowed to lower lending rates on his first day at office last week, has called a Monetary Policy Committee meeting for Wednesday, according to central bank sources.
The committee may propose a 50-basis-point cut to the policy rate from the existing 10%, as the new governor signalled on his first day in office, a senior Bangladesh Bank executive said.

However, economists and bankers said reducing rates while inflation remains elevated could reverse recent gains. They believe any cut should be limited and cautious if inflation is to be brought down.

Meanwhile, interest rates in the call money market and on all treasury bills and bonds fell below the 10% policy rate on Sunday, giving the central bank room to reduce the rate.

According to the Bangladesh Bank, the cut-off yields on 91-day, 182-day and 364-day treasury bills were 9.89%, 9.97% and 9.93% respectively, while the call money rate stood at 9.89% on Sunday.

The prospective shift in monetary policy comes as global energy markets face one of their gravest shocks in decades, following joint US and Israeli strikes on Iran and Tehran's retaliatory missile attacks, which could worsen inflationary pressures.

The Bangladesh Bank maintained a tight monetary policy during the interim government's tenure, raising the policy rate from 8.5% to 10% to contain inflation.

The latest monetary policy, announced by former governor Ahsan H Mansur just ahead of the February national election, kept the rate unchanged at 10% due to persistent inflation.

Under the tight stance, the central bank brought inflation down from double digits to single digits over the past year, although it remains above the desired level. The previous target was to reduce inflation to below 7%, but it is still above 8%.

According to Bangladesh Bank data, average inflation stood at 8.66% at the end of January, while lending rates ranged between 11% and 12%.

However, soon after taking office, Mostaqur Rahman, who is also a businessman, said he would prioritise reducing lending rates and supporting growth.

Speaking to The Business Standard, a senior central bank executive said inflation had not fallen to the expected level despite the tight policy.

He said the Bangladesh Bank is now considering easing its stance to support the supply side by injecting liquidity, arguing that increased production and supply could help ease inflationary pressures.

'Infrastructure problems must be resolved first'

Mutual Trust Bank Managing Director Syed Mahbubur Rahman said bankers also want lending rates to fall, but prevailing market realities make that difficult.

"At present, the government is the largest borrower. When the government is borrowing at 10% or more through treasury bills and bonds, it is extremely difficult for banks to reduce lending rates," he said.

He further explained that some banks are now offering up to 11% interest to mobilise deposits. "How can loans be offered at lower rates after borrowing at such high costs?"

He added, "Many say high lending rates are a major obstacle to investment. We also agree high rates are a barrier, but they are not the only or principal one."

He explained that when an investor decides to invest, the first considerations are gas, electricity and port facilities. "At present, shortages of gas, electricity and infrastructure are the main challenges for investment."

He suggested that to boost investment, infrastructure problems must be resolved first and the issue of lowering lending rates can then be addressed.

He hoped the new governor would continue the ongoing reform initiatives in the banking sector. If a firm message is not delivered at the outset, vested interests may try to return the sector to its previous state.

'Rate reduction should be cautiously limited'

Fahmida Khatun, executive director at Centre for Policy Dialogue, told TBS that bringing down inflation while simultaneously lowering interest rates would be highly challenging.

She said that during the Awami League government's tenure, inflation kept rising as interest rates were not increased to a rational level, allowing price pressures to intensify.

"The interim government took policy measures and raised interest rates, which helped contain inflation to some extent. However, in my view, if we are to bring inflation down to 5-6%, this policy stance needs to continue," she said.

She noted that there is some justification in the argument that lower rates are needed to stimulate credit growth. "Even if the central bank decides to reduce the policy rate at this stage, it should be done in a very limited and cautious manner," she added.

'Surge in credit demand could prompt BB to inject liquidity'

Mohammad A (Rumee) Ali, former deputy governor of Bangladesh Bank, said lending rates remain high due to elevated inflation and mounting default loans in the banking sector. He said lending rate reduction will make money easy creating more demand.

However, he warned that if rates are lowered without first containing inflation and ensuring productive use of credit, it could further fuel price pressures.

"Banks are constrained in their lending capacity because of high non-performing loans. A surge in credit demand could prompt the central bank to inject liquidity, increasing the risk of further inflation," said.

'Maintaining existing tight monetary stance more credible route'

Zahid Hussain, former lead economist at the World Bank's Dhaka Office, said easier credit and lower interest rates tend to boost import demand, placing added pressure on the taka.

Any depreciation of the currency then feeds directly, and often asymmetrically, into non-food inflation, he said.

Within this framework, he added, non-food inflation functions like core inflation. "It does not necessarily signal excess demand. Rather, it reflects how earlier food price shocks and exchange-rate pressures are transmitted across the economy."

Movements in the taka are quickly passed through to the prices of imported goods, energy, transport and other non-food items. Core-like indicators are therefore useful in tracking transmission effects, but they should not be read as evidence of overheating demand or expanded policy space.

He argued that maintaining the existing tight monetary stance, alongside exchange-rate stability and stronger competition in food markets, offers a more credible route to sustained disinflation than premature easing under the current inflation regime.

Business community gets priority to business oriented governor

Bangladesh Bank has appointed a new governor at a time when the banking sector faces a record 36% default loan ratio, sharply limiting lending capacity and disrupting normal operations.

Addressing the default crisis was not among the priorities he outlined on his first day in office. His appointment as a career businessman drew criticism within the industry over potential conflicts of interest. Of his 11 stated priorities, four focused on supporting the business community.

It is the first time a businessman with interests in garments and real estate has been made governor of Bangladesh Bank.

He himself had been a defaulter until two months ago, before obtaining loan rescheduling under a policy committee decision in December. He has also prioritised reopening closed industries to revive business activity.

With inflation still high, his focus on reopening factories has prompted speculation that loan rescheduling may be accelerated, as many closures stem from loan defaults.

A 10-year rescheduling package with a two-year grace period, introduced in September, faced strong resistance from banks, which questioned its effectiveness.

Of 1,500 applicants, only 300 received approval from the central bank's policy committee, and most of those cases remain unimplemented.

'Most banks unable to expand lending'

Speaking to TBS, a managing director of a private commercial bank, requesting anonymity, said the sector is in dire straits due to unusually high default loans.

Of 61 banks, no more than 12 are able to extend fresh credit. He said five banks have merged, around 10 are critically exposed, and another 20 remain vulnerable though not publicly identified.

Referring to large banks whose boards were reconstituted after the regime change, he said deposit inflow appears strong as confidence returned. In reality, however, capital has been eroded by default loans, restricting lending capacity.

Although liquidity has increased as deposits returned, most banks cannot expand credit without first rebuilding capital through lower defaults. In this context, the sector lacks the capacity to meet large corporate credit demand.

He warned that loan rescheduling promoted by Bangladesh Bank may not be recognised by global rating agencies or multilateral lenders.

The International Monetary Fund requires rescheduled loans to be classified as stressed assets alongside defaults, limiting any cosmetic improvement in ratios.

As a result, rescheduling alone may not lift the country's credit profile. He alleged that many firms seeking long-term rescheduling defaulted due to corruption and fund diversion.

Citing a major real estate group, he said inspections found fund diversion behind its default, despite a request for a 10-year rescheduling with a two-year grace period.

Many applicants, he added, have debt-to-equity ratios above 100% and would struggle without fresh equity. A grace period in such cases could strain banks' cash flows and deepen systemic weakness.

He also noted that the government faces a funding squeeze and is borrowing heavily from banks. Any policy rate cut to lower lending rates could spur credit demand, forcing the central bank to inject liquidity and heighten inflation risks.

Excess liquidity stood at Tk3.21 lakh crore at the end of last year, largely invested in treasury bills and bonds. Yet private sector credit growth remained at a historic low of 6%, reflecting weak expansion demand.

Treasury bill yields for all three tenures fell below the policy rate today (1 March) as liquidity in the banking sector improved significantly.

The yields on 91-day, 182-day, and 364-day treasury bills dropped to 9.90%, 9.98%, and 9.93%, respectively, according to the latest auction results. Just a week earlier, the yields stood above 10%, with the 91-day bill at 10.02%, the 182-day bill at 10.11%, and the 364-day bill at 10.07%.

Treasury bills are short-term government debt instruments issued for periods ranging from 91 days to 364 days.
The decline reflects a surge in liquidity across the banking system. Call money rates have also dropped by around 40 basis points between January and March this year.

Mohammad Ezazul Islam, director general of the Bangladesh Institute of Bank Management, said the fall in yields was mainly driven by two factors.

"The central bank has been purchasing foreign exchange reserves from commercial banks through auctions. As a result, liquidity has flowed back into the banking system," he said.

According to Bangladesh Bank data, the central bank has purchased $5.39 billion from commercial banks through auctions so far in the current fiscal year.

Ezazul Islam added that slower private sector credit growth was another major reason behind the increased liquidity.

Bangladesh Bank's latest data shows private sector credit growth stood at 6.03% in January.

A deputy managing director of a private bank said the "excess liquidity" in the banking sector has pushed treasury bill yields lower, noting that central bank dollar purchases have injected additional funds into the banking channel.

He also said deposit growth has strengthened liquidity conditions, as rising deposits increase banks' available funds.

Another deputy managing director said government borrowing demand has declined recently, partly due to slow implementation of the Annual Development Programme (ADP), further contributing to the fall in treasury bill yields.

The Bangladesh Securities and Exchange Commission (BSEC) has initiated the formulation of rules to ensure legal protection for whistleblowers, aiming to encourage greater disclosure of information about the capital market.

Market insiders say that these rules to protect whistleblowers and provide incentives are being introduced for the first time in the capital market's history.

In addition to providing protection, the draft rules propose that whistleblowers who provide information will receive 25% of the penalties as an incentive if the capital market regulator imposes fines on any capital market stakeholders.

To formulate the rules, the regulator published draft rules namely "Capital Market Related Information Disclosure and Whistleblower Protection Rules, 2026" in its website and sought public opinions within two weeks, by 15 March.

The draft rules define a whistleblower as any person associated with the board of directors, an executive member, trustee board member, auditor, or lawyer of any market intermediary registered with the BSEC, or of any listed company, mutual fund, alternative investment fund, or special purpose vehicle (SPV).

Protection of whistleblowers

The draft rules state that if a whistleblower discloses information, their identity shall not be revealed without their consent, unless disclosure is required by law.

If the whistleblower is an employee, no disciplinary or punitive action shall be taken against them under these rules for providing such information.

This includes demotion, unfavorable transfer, forced retirement, dismissal, reprimand, discriminatory treatment, or any other action that could cause overall, legal, or financial harm.

Any information disclosed by a whistleblower shall not be used as evidence in any legal proceeding. A whistleblower shall not be compelled to testify in any case arising from the disclosed information, nor shall any question be permitted during proceedings that may reveal their identity.

If any book, document, or record submitted as evidence contains details that could identify the whistleblower, appropriate measures must be taken to ensure that such information remains confidential when presented before the court.

Incentives

The draft rules state that if any monetary penalty or fine is recovered based on information provided by a whistleblower, the appropriate authority may, at its discretion, award the whistleblower a financial incentive or honorarium.

The Commission will determine, through periodic orders, the conditions, amount, and procedures for granting such incentives. However, the reward will not exceed 25% of the realised fine and, in any case, will be capped at Tk10 crore.

After the interim government took over, Ahsan Mansur was perhaps one of the few people who carried out some substantial and visible work. Those of us who closely observed and evaluated his actions tend to agree on one point: during the interim period, the economic sector was the only area where meaningful steps were taken. Compared to other sectors, this one saw concrete reform initiatives, particularly from the central bank.

If we look at the record, significant reforms were introduced in the banking sector. Changes were made to the boards of directors of several banks, and restructuring efforts began. The exchange rate situation improved, foreign reserves showed signs of recovery, and remittance inflows increased. These are not minor developments. I would suggest that during Dr Ahsan H Mansur's tenure, the economic sector experienced notable progress.

That said, it is also true that despite his goodwill and intentions, some reforms could not be completed.
For example, we cannot claim that full monetary discipline was established. Nor can we say that a strong structure of accountability, transparency, and responsibility was fully institutionalised. Still, leaving those limitations aside, I would argue that his tenure left behind considerable achievements.

Now, the question is why he had to leave so abruptly. When a political government is elected, it certainly has the authority to appoint a new governor. It can reshuffle ministries and bring in people it considers more suitable or capable. That is not unusual. What surprised many of us, however, was the manner in which Dr Mansur's departure took place.

As far as we know, he did not receive a formal termination letter. He reportedly learned about his removal through news channels. To me, this indicates that proper institutional due process was not followed. When he left, there was agitation among central bank staff, and he had to leave amid that unrest.

A newly elected government has every right to bring in new leadership, but there is also a matter of institutional etiquette. A proper and respectful transition would have reflected better on the system.

If we think about the monetary and banking reforms initiated during this period, important groundwork has been laid. Discussions had also begun on recovering embezzled funds that were laundered abroad. These were serious steps.

I would like to highlight three concerns about what might happen in his absence.

First, regarding reforms: Many of the recent monetary and financial reforms were undertaken on our own initiative. In the past, such reforms often came in response to directives from institutions like the IMF. This time, however, there was an effort to act proactively. Don't we want a financial sector that operates under a proper system? Don't we want transparency and accountability? Don't we want structural changes that strengthen the sector? Of course we do. These reforms had begun to move in that direction, and many of us appreciated that.

Second, we now have a newly elected government with many pressing political priorities. There are pending bills left by the interim administration, the referendum issue, implementation of the July Charter, and several other political commitments.

My concern is how high financial sector reform will rank among these priorities. There is always the possibility that some regulatory frameworks could be rolled back. Much will depend on how seriously the new government chooses to prioritise economic and financial reform.

Third, and perhaps most importantly, just before the interim government's tenure ended, the issue of granting full autonomy to Bangladesh Bank resurfaced. Dr Mansur raised the matter and placed it before the interim administration, leaving it for consideration by the newly elected government.

The future of many reforms depends heavily on this question of autonomy. Without real independence, the central bank risks functioning more as a department of the finance ministry rather than as the state's monetary authority. In such a scenario, vested interests could exert influence, and reform efforts could stall.

Ultimately, the future of banking and monetary reform in Bangladesh will depend largely on whether the central bank is allowed to operate as a truly autonomous institution. Without that foundation, sustaining meaningful reform will be extremely difficult.

Selim Jahan is a Professorial Fellow at the BRAC Institute of Governance and Development.

Bangladesh’s foreign debt servicing crossed the amount of loans it received from international lenders in the first seven months of the ongoing fiscal year (FY) 2025-26 amid the slow pace of foreign-funded projects executed under the Annual Development Programme (ADP).

The country repaid $2.67 billion in the first seven months of the current fiscal year, according to data released by the Economic Relations Division (ERD) of the finance ministry.

Meanwhile, foreign loan disbursement dipped 33 percent year on year to $2.4 billion during July-January of this fiscal year, which an economist said is a warning sign.

“The fact that debt servicing has exceeded fresh foreign loan inflows is a warning sign,” said Ashikur Rahman, principal economist at the Policy Research Institute (PRI) of Bangladesh.

“It indicates that Bangladesh is now transferring more resources outward than it is receiving, which tightens both fiscal and external liquidity conditions,” he said.

“This reflects not only maturing debt obligations but also weak project implementation, slower disbursements, and limited export dynamism. While it is not yet a crisis, it reduces policy space and highlights the urgency of strengthening revenue mobilisation, export competitiveness, and a prudent external borrowing strategy.”

Data by the Implementation Monitoring and Evaluation Division under the Ministry of Planning showed that in the July-January period of this fiscal year, the implementation of foreign-funded ADP was 36 percent, marginally higher than in the same period a year ago.

During this period, commitment by foreign lenders, namely the World Bank and the Asian Development Bank, as well as Russia, China, Japan, and India, declined 3 percent year on year to $2.27 billion.

The decline in both commitment and disbursement against a spike in the repayment of foreign loans comes at a time when revenue collection has continued to fall short of the target, and government borrowing from the banking system has risen.

Tax collection by the National Board of Revenue, the main generator of revenue for the state, increased 13 percent in the July-January period of this FY from a year ago. However, the NBR missed its target by 27 percent, a shortfall of Tk 60,110 crore, for the period, according to provisional data.

During the period, the government’s net borrowing from the banking sector crossed Tk 48,800 crore, nearly five times the Tk 10,558 crore it borrowed in the same period a year earlier, according to Bangladesh Bank’s provisional data.

“The borrowing for debt repayment increased significantly,” said Towfiqul Islam Khan, additional director (Research) at the Centre for Policy Dialogue (CPD), in a paper on macroeconomic benchmarks for the new government presented at a briefing of Citizen’s Platform for SDGs.

He said the government’s fiscal space -- the ability to provide resources for a desired purpose without jeopardising the sustainability of its financial position or the stability of the economy, and the ability to spend for unforeseen events -- is diminishing.

Bangladesh’s foreign debt repayment has been increasing for the last several years. It paid $7 billion to multilateral and bilateral lenders in FY25, up from $6 billion a year ago.

Rahman said structural economic reforms are no longer optional.

“Enhancing Bangladesh’s international competitiveness, diversifying exports, improving the investment climate, and mobilising domestic resources more effectively are fundamental to building a stable and resilient economic architecture,” he said.

“Without these reforms, external vulnerabilities will continue to resurface, constraining growth and macroeconomic stability.”

Government authorities prepare to compensate the small investors in the five distressed private banks merged into Sammilito Islami Bank late last year, officials say.

Instructed by the high-ups of the new government, the Financial Institutions Division (FID) is now calculating how much money needed to compensate the investors who bought shares of the five banks from the stock market, they add.

Officials at the FID have prepared a preliminary list of the small investors who have been affected by the merger of the five banks, which had been extensively looted allegedly during the Awami League regime.

The mode of payment, whether the small investors will be compensated on the prices of shares on the last trading day or at face value, however, is yet to be finalised.

The FID will soon place the matter to Finance and Planning Minister Amir Khosru Mahmud Chowdhury for a decision and take further approval from the top of the government for securing funds to disburse the compensations.

A senior FID official has told The Financial Express they earlier placed the matter to then finance adviser Dr Salehuddin Ahmed, but he left office before giving a final decision.

The official also says soon after assuming office, the new finance and planning minister expressed interest in settling the issue shortly.

In this regard, he asked FID officials to submit a proposal detailing the number of shareholders eligible for compensation and the amount of money to be needed for the payoff.

"We will place the proposal to the minister soon as our paperwork is almost completed," says the official.

A Finance Division official familiar with the developments has told The Financial Express the finance minister is of the opinion that the share value of a company cannot be zero in any way.

He says the finance minister is convinced that the small investors who bought shares of the banks from the stock market had no role in the board of directors and management of the board, and thus, they had no responsibility for the deterioration in the financial health of the banks.

The official says the small investors bought the shares of the banks based on the financial statements, which showed the banks were making profit.

Thus, these small investors are eligible for compensation as the government itself has taken over the banks, the official says, noting that the matter of compensation may be finalised next week.

In November last year, the government formed Sammilito Islami Bank by merging five financially distressed Islamic banks under the Bank Resolution Ordinance 2025.

The five banks are First Security Islami Bank, Social Islami Bank, Global Islami Bank, Union Bank, and EXIM Bank.

The government allocated some Tk 200 billion as capital in favour of Sammilito Islami Bank from the exchequer.

Moreover, the central bank has released some Tk 120 billion from the deposit-insurance trust fund, from where each depositor is given Tk 0.2 million as compensation.

However, the small investors have yet to be given any compensation as then Bangladesh Bank governor Dr Ahsan H Mansur declared the share prices of the merged banks as zero and the stock-market regulator stopped the trading in the shares on the bourses.

Bangladesh's economy is expected to grow by 4.5 per cent this fiscal year, a little below earlier projections by Oxford Economics, as it believes the second-quarter growth ending December slowed alongside poor export growth in key markets.

However, the growth in fiscal year 2025-26 picks up above 3.49-percent mark determined for the past fiscal year by final official count.

Founded in 1981, Oxford Economics is a global economic advisory firm providing forecasting and analytical services covering more than 200 countries and a wide range of industries and cities.

"We've downgraded our GDP-growth forecast for Bangladesh to 4.5 per cent in FY2025-26 from 4.7 per cent previously," it said Thursday.

The agency predicts activity should continue to recover in FY2026-27, albeit at a relatively moderate pace of 5.7 per cent year on year.

Following a slowdown in FY2024-25, economic momentum improved temporarily in the third quarter of 2025, supported by stronger activity in manufacturing and construction.

However, it says trade data indicate a renewed loss of momentum in the fourth quarter ending December, with goods exports to the United States and Germany falling by 4.1 per cent and 12.8 per cent year on year, respectively.

Inflation remained stubbornly high, with price pressures intensifying since October despite the fact the central bank has been pursuing a tight monetary stance.

Consumer prices rose 8.6 per cent year on year in January.

"Although wage growth remained broadly stable at around 8.0 per cent, stronger remittance inflows provided some support to household incomes."

The Oxford Economics says February's general election, which delivered a decisive victory for the Bangladesh Nationalist Party (BNP), along with the passage of a constitutional reform referendum, could support business confidence.

The firm expects the new administration to maintain its reform agenda through continued engagement with the International Monetary Fund.

"A peaceful transition of power and policy continuity are expected to provide near-term support to economic sentiment," says Oxford Economics report.

However, the outlook for consumer spending remains uneven as wage increases continue to lag behind inflation, eroding real incomes.

Private investment is also likely to remain constrained by restrictive monetary policy.

Bangladesh Bank has kept policy rates unchanged, maintaining a tight stance aimed at containing inflation and rebuilding foreign-exchange reserves.

The restrictive policy environment has helped stabilise reserves, which have risen to about $30 billion, from roughly $17 billion in 2024, marking progress under the IMF-supported reform programme.

The central bank has indicated that inflation needs to fall below 7.0 per cent before policy easing can be considered.

External risks remain significant.

While lower US tariffs could support exports in the near term, the gradual erosion of trade preferences associated with Bangladesh's graduation from least-developed-country status poses a challenge to medium-term export prospects.

Some export orders may be front-loaded ahead of the transition.

Meanwhile, the country's economy expanded by 3.49 per cent in fiscal year 2024-25, as tight monetary policy and restrained government spending weighed on activity, while inflationary pressures remained elevated, says Bangladesh Bureau of Statistics (BBS).

According to final estimates released Thursday by the statistical bureau, gross domestic product (GDP ) reached US$456 billion, with growth slowing from 4.22 per cent in FY2023-24 and falling short of the provisional estimate of 3.97 per cent.

The weak performance followed an unprecedented mass uprising in July-August 2024 that disrupted economic activity and forced the temporary closure of many factories during the fiscal year.

Sluggish consumer demand and subdued private investment also damped growth, reflecting persistently high inflation and prolonged political uncertainty during the period under review.

"The disappointing end to the year largely reflected a self-inflicted drag from consumption and investment following higher inflation and political uncertainty," says Dr Zahid Hussain, an independent economist, about the deceleration reasons.

He adds that the contraction in public spending is expected to reverse by FY2027 as political uncertainty has been eased following polls just held this month.

The slowdown in output occurred alongside continued price pressures.

External projections had been more optimistic.

Global agency S&P Global Ratings forecast growth of 3.97 per cent for the year, while Moody's had projected around 4.5 per cent before revising its outlook downward.

Sectoral data show uneven performance across the economy.

Agricultural output expanded by 2.82 per cent, up 0.63-percentage points from a year earlier.

Industrial growth slowed to 3.35 per cent, down 0.63-percentage points, while the services sector contracted by 4.35 per cent, 0.16-percentage points lower than in the previous year.

Expenditure-based measures indicate weakening macroeconomic fundamentals.

The three main components of GDP -- investment, domestic savings and national savings -- all declined compared to the previous fiscal year.

Total investment fell to 28.54 per cent of GDP, from 30.70 per cent a year earlier.

Domestic savings declined to 21.98 per cent, from 23.96 per cent, while national savings, which include remittance income, dropped to 27.67 per cent from 28.42 per cent despite the fact that after the August 05, 2024 uprising the remittances were robust.

Per-capita income under the final estimate stood at $2,769, reflecting the slower pace of economic expansion.

After eight consecutive years of losses and steadily declining sales, GQ Ball Pen Industries has surprised the market as its share price surged more than 200% in the eight months since June, raising eyebrows among investors.

Despite weak business fundamentals — low sales and persistent losses — the company's market capitalisation has climbed to about Tk476 crore, even though its annual sales are only around Tk2 crore.

According to data from the Dhaka Stock Exchange (DSE), GQ Ball Pen's share price rose from Tk169.6 on 30 June last year to Tk523.9 on Thursday (26 February).

The company manufactures various types of ballpoint pens and distributes them to stationery shops through distributor networks as well as to institutional buyers through its sales team.

GQ Ball Pen has a paid-up capital of Tk8.93 crore, divided into 89.28 lakh shares, around 60% of which are held by general investors.

Sales slump

A decade ago, the company's business was significantly larger. In 2015, GQ Ball Pen reported annual sales of Tk22.28 crore, a 23% increase from the previous year, although it still incurred a loss of Tk1.04 crore with a per-share loss of Tk1.17.

In the following fiscal year, 2016-17, the company posted a profit of Tk1.47 crore despite declining sales.

However, the company's performance has deteriorated since then. From FY2018 onward, the company has been incurring losses for eight consecutive years.

Industry observers say the once-popular Econo brand has struggled to remain competitive in a market increasingly dominated by imported and modern refill-style pens.

Sales hit bottom last year

In FY2025, GQ Ball Pen's sales fell to just Tk1.85 crore, while the company reported a loss of Tk1.63 crore, translating to a loss per share of Tk1.83.

Responding to questions about the business downturn, Uzzal Kumar Saha, managing director of GQ Ball Pen Industries Ltd, told The Business Standard that production has been affected by ongoing factory modernisation.

"Due to the ongoing Balancing, Modernisation, Rehabilitation and Expansion (BMRE) at our factory, production has declined significantly, which has limited product supply in the market," he said, adding that sales are expected to improve once the BMRE work is completed.

During FY2024-25, the company operated on a limited scale, resulting in sales dropping to Tk1.85 crore from Tk5.43 crore a year earlier. Most of the sales during the period came from selected institutional buyers.

In its annual report, the company cited two main reasons for the continued losses – aging machinery and shifting customer demand from traditional direct-fill pens to modern refill-style ball pens, reflecting the need for modernisation.

Pays regular dividend despite losses

Despite recording losses for the past eight years, GQ Ball Pen has continued to pay cash dividends to shareholders.

Over the years, the company has declared cash dividends ranging from 2.5% to as high as 12.55%. In FY2025, it paid a 10% cash dividend to general shareholders.

From market pioneer to struggling player

Founded in 1981, GQ Ball Pen Industries once revolutionised handwriting in Bangladesh with its popular Econo brand ballpoint pens.

For nearly three decades after its establishment, the company enjoyed strong business growth. However, since around 2012 it has gradually lost market share amid rising competition and changing consumer preferences.

Today, the company is attempting to revive its business through factory modernisation and product upgrades, hoping to regain a foothold in the competitive ballpoint pen market.

Bangladesh’s private investment fell for the third consecutive year, reaching 22.03 percent of Gross Domestic Product (GDP) in the fiscal year 2024-25, the lowest level in 11 years, amid a weak investment climate and macroeconomic stress.

Public investment as a share of GDP, a measure of the final value of goods and services produced in the economy over a period, also declined for the third year due to slow implementation of the Annual Development Programme (ADP).

It stood at 6.51 percent of GDP in FY25, the lowest since at least FY13, down from 6.74 percent a year earlier, according to the Bangladesh Bureau of Statistics (BBS).

Economists say that the falling investment trend indicates the creation of fewer jobs than required, especially for the growing number of young workers entering the labour market each year.

According to them, the investment decline also threatens future growth.

“It is very concerning, especially at a time when we need to accelerate investment to create employment and boost exports,” said M Masur Reaz, chairman and founder of Policy Exchange Bangladesh.

The investment-to-GDP ratio comes alongside an estimated economic growth of 3.49 percent, the lowest since the Covid year 2020, driven mainly by private consumption. The decline suggests overall investment has not kept pace with the growth of the economy.

Reaz attributed the fall in private investment to three main factors.

“Our investment environment is weak, and it was identified nearly a decade ago,” he said, citing Bangladesh’s ranking in the World Bank’s ease of doing business at 176 out of 190 economies.

“From that day, comprehensive and targeted reforms were necessary. But they were implemented in an isolated and fragmented manner.”

The economist added that investment depends on multiple factors, including licensing, policy predictability, land, energy, and trade facilitation.

The macroeconomic crisis that began to unfold from 2023 further dampened investment sentiment, he said. Weak domestic demand, import contraction caused by the dollar shortage, and political instability ahead of the election all played a role.

“Foreign investors perceive a country as high risk when a country suffers from a macroeconomic crisis,” he said, noting that uncertainty increased after the mass uprising in July 2024 that led to the ousting of the Sheikh Hasina government.

“We have seen demonstrations and unrest, and they have affected the policy environment too. The whole fiscal year 2024-25 was full of uncertainty. The declaration of the general election date came in August of this fiscal year.”

Reaz added that the recent demonstration at the Bangladesh Bank over the removal of the central bank governor could create a negative international perception, signalling fragility in decision-making and discipline.

Ashikur Rahman, principal economist at the Policy Research Institute (PRI) of Bangladesh, identified a weak business climate, infrastructure bottlenecks, and waning competitiveness in international markets as production costs rose amid supply-side constraints.

He said governance breakdown in the banking sector since around 2020 has severely distorted credit allocation.

“Instead of channelling funds toward productive small and medium-sized enterprises, the financial system became increasingly captured by entrenched economic oligarchs. Large-scale loan irregularities and weak oversight eroded confidence and crowded out genuine entrepreneurs.”

Rahman added that small and mid-sized firms, traditionally the backbone of the employment generation, found themselves sidelined from access to affordable finance.

“This created a perverse incentive structure in which politically connected borrowers benefited, while real sector innovators were marginalised.”

He added that the decline in private investment as a percentage of GDP has profound implications for the country’s economic development.

“Investment is the engine of productivity growth, job creation, and structural transformation. A sustained decline weakens the economy’s capacity to generate employment, particularly for a young and expanding labour force.”

Rahman said it also limits technological upgrading and diversification beyond traditional sectors.

“Moreover, without robust private investment, growth becomes increasingly consumption-driven and fiscally strained. This is not sustainable, especially as Bangladesh approaches LDC graduation and faces tighter external financing conditions. Weak investment today translates into slower growth tomorrow, and slower growth amplifies challenges such as unemployment, underemployment, and poverty,” he added.

Syed Akhtar Mahmood, former global lead for regulatory reforms at the World Bank Group, said the low investment rate is caused by a mix of short and long-term issues. While governments have tried to improve the investment climate, many fundamental problems remain, including regulatory hurdles and limited access to credit.

High interest rates, bank liquidity issues, and greater risk aversion have reduced the supply of credit.

“Even if investors were willing to borrow at the higher interest rates, they are not getting financing. Many investors, especially some large ones, have over-leveraged themselves by borrowing heavily when interest rates were low. These companies may not be in a position to take on large loans even if they see good investment potential,” he said.

Mahmood added that energy shortages and political uncertainty have further dampened investor confidence.

“Low investment means our production capacity is not augmented while our existing capacity is under-utilised,” he commented.

According to Mahmood, this affects both current growth and future growth prospects. It also limits technological upgrading, research and development, skills development, and new product creation, all of which are necessary to enhance productivity and diversify the economy, including exports.

“When investors are struggling to carry out even basic investments, they are unlikely to invest in things that make our economy more competitive,” he said.

The Dhaka Stock Exchange has experienced a volatile yet gradually stabilising trend during the first eight trading sessions after the BNP assumed office, reflecting investor optimism alongside uncertainty over regulatory reforms and policy direction.

On the day the BNP officially formed the government on 17 February, the benchmark DSEX index of the Dhaka Stock Exchange closed at 5,570 points with turnover at Tk1,222 crore, indicating strong investor participation. However, the rally quickly lost steam.

The following session on 18 February saw the index fall to 5,519, with turnover dropping to Tk936 crore. The downward trend continued on 19 February, the day Ramadan began, when the DSEX declined further to 5,465 and turnover fell sharply to Tk560 crore.
The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

Trading hours were shortened by 40 minutes for Ramadan, contributing to lower turnover in subsequent sessions. On 22 February, the index marginally recovered to 5,467 with turnover of Tk568 crore.

Momentum improved on 23 February as the DSEX climbed to 5,553 and turnover rose to Tk718 crore. The market slipped slightly again on 24 February, closing at 5,542 with turnover increasing to Tk825 crore.

On 25 February, the index edged up to 5,554 while turnover declined to Tk565 crore. By 26 February, the DSEX regained strength to close at 5,600, accompanied by a strong rebound in turnover to Tk947 crore.

The overall performance suggests that while initial euphoria faded quickly, the market has shown resilience amid ongoing discussions about regulatory restructuring and reform.

Finance Minister Amir Khosru Mahmud Chowdhury recently hinted at restructuring the securities regulator, stating that although the current upward trend may reflect optimism surrounding the democratic transition, only sustainable and structural reforms can ensure long-term stability.

Speaking to journalists during a visit to Chattogram, he emphasised that sentiment-driven gains would not bring fundamental change and that comprehensive reforms, including amendments to laws and regulatory frameworks, are under consideration.

He also stressed the importance of strengthening the Bangladesh Securities and Exchange Commission, enhancing transparency and adopting a zero-tolerance stance against irregularities.

The government has already begun searching for a new BSEC chairman, as the current commission, formed during the interim administration and led by Khondoker Rashed Maqsood, has struggled to restore investor confidence.

Finance ministry officials indicated that the regulator may undergo broader restructuring as part of efforts to address long-standing weaknesses in a market that has lagged behind the country's overall economic growth.

Stakeholders say that several private-sector professionals and at least one academic from the University of Dhaka have shown interest in leading the commission. However, many market participants favour leadership from the private sector, citing experience and the need for market-oriented reforms.

The DSEX had initially surged nearly 200 points to a five-month high on 15 February, the first trading session after the BNP's landslide victory in the 13th national election, reflecting investor optimism. That enthusiasm, however, was tempered by uncertainty over the regulatory leadership and broader policy direction.

Minhaz Mannan Emon, director of the DSE, said the BNP's election manifesto included a specific roadmap for capital market development, raising expectations among investors. According to him, thousands of investors who suffered heavy losses in the past decade are now looking to the new government for meaningful reform and accountability.

Notable gainers over the eight-session period included National Bank, S Alam Cold Rolled Steels, Shinepukur Ceramics Limited, Beximco Pharmaceuticals, BIFC, Prime Finance, GSP Finance and Fareast Finance.

Market insiders noted that several stocks that had remained under pressure during the interim government due to production closures and liquidation risks rebounded sharply following the political transition.

As the market moves forward, analysts say sustained improvement will depend less on short-term sentiment and more on the implementation of credible reforms aimed at strengthening governance, boosting liquidity and rebuilding trust among domestic and foreign investors.

To help the economy recover from its current challenges, investment should be boosted by increasing taxes on a priority basis, Finance and Planning Minister Amir Khasru Mahmud Chowdhury said today (27 February).

"Our priority is to increase taxes. We need to enhance investment by increasing taxes. Through this, the tax-to-GDP ratio can be increased," he told journalists while visiting the site of a proposed government hospital in the Patenga area of Chattogram city.

The minister made the remarks in response to questions from reporters regarding the government's priorities for overcoming the ongoing economic difficulties and the focus areas of the upcoming national budget.

Khasru said employment generation remains one of the key priorities outlined in the BNP's electoral programmes, emphasising that investment is critical to creating jobs.

"If there is no investment, where will employment come from? That is why we are emphasising domestic and foreign investment. And we have also pledged to make changes in healthcare and education," he added.

He said that employment generation would be the central focus of the next national budget, and the government would take all necessary measures to achieve that goal.

Earlier, the finance minister inspected the designated land in the Jelepara area under Patenga Police Station in Chattogram for the construction of the proposed government hospital.

Bangladesh's economic growth slowed for a third consecutive year in the 2024-25 fiscal year, falling to 3.49% – the weakest performance since the immediate recovery from the Covid-19 pandemic.

The Bangladesh Bureau of Statistics published the final GDP figures on its website today (26 February), showing that the country's economic growth stood 48 basis points lower than the provisional estimate of 3.97% for the last fiscal year to June 2025.

Economists describe the slowdown as inevitable, noting that growth was stifled by mounting pressure from falling investment, contractionary monetary policy, and weakening domestic demand.

The latest data show a steady deceleration in growth over three years. GDP growth stood at 7.10% in FY22 before falling to 5.78% in FY23 and 4.22% in FY24. During the height of the Covid-19 pandemic in FY20, growth had dropped to 3.45%.
Infographics: TBS
Infographics: TBS

The new reading suggests the economy is again hovering close to that low point.

According to the final BBS estimates, Bangladesh's GDP at current prices reached $456 billion in FY25, up from $450 billion in FY24. Per capita income rose to $2,769, after declining for two consecutive years.

Agri, service sectors slowed

Sectoral data show mixed trends, with agriculture and services slowing, while industry recorded a modest improvement compared with the previous year.

Agriculture grew by 2.42% in FY25, compared to 3.30% in the year before. The services sector's growth fell to 4.35% from 5.09% during the same period.

However, industries recorded 3.71% growth in FY25, slightly higher than the past year's 3.51%.

Investment, savings declined

The BBS data also show a broad weakening in investment and savings indicators.

In FY25, the investment-to-GDP ratio stood at 28.54%, down from 30.70% in FY24. The domestic savings-to-GDP ratio fell to 21.98% from 23.96%, while the national savings-to-GDP ratio declined to 27.67% from 28.42%.

Private investment dropped to 22.03% of GDP in FY25.

Per capita income rose to Tk334,511 ($2,769) from Tk304,102 ($2,738) in FY24. In nominal terms, this represents an increase of Tk30,409, or $31, year-on-year.

Slowdown not unexpected

Masrur Reaz, chairman and chief executive of Policy Exchange, said the slowdown, while concerning, was not surprising.

"For the past few years, Bangladesh's economy has been caught in a slow-growth cycle. The fall in GDP growth in FY25 is worrying but not unexpected," he said.

"Since FY2022-23, the economy has faced multiple challenges. High inflation and a decline in demand have reduced domestic output. At the same time, the central bank's high interest rates and contractionary monetary policy have reduced private sector loan demand and credit growth."

He added that the investment-to-GDP ratio has been declining steadily over the past few years. "This drop in growth is not surprising. High inflation, high interest rates and weak domestic demand have reduced output in industry and services, affecting overall economic output."

Masrur said the lack of new investment was another key factor. "Private sector investment has fallen to just 22% of GDP. The year following the political transition was also not supportive for the economic environment."

He noted that after August 2024, public investment also declined, with the Annual Development Programme reportedly at its lowest level in two decades. Law and order instability, protests, supply chain disruptions, and minor natural disasters also affected economic activity.

Disruptions in public administration and regulatory services further weighed on production and investment, he added.

"These four main factors – reduced domestic demand, high interest rates and falling credit growth, lack of new investment, and political and administrative instability – have together affected growth in FY2024-25. Overall, the final GDP figures reflect a slowdown that is quite normal and predictable under the circumstances," Masrur said.

'Economy in a sluggish phase'

Mustafa K Mujeri, executive director of the Institute for Inclusive Finance and Development (InM), said the outlook was not encouraging.

"In terms of growth, the picture is not very positive. In FY2024-25 the economy was largely stagnant or sluggish," he said.

He explained that industry – particularly manufacturing – and services are the main drivers of growth. "Agriculture usually grows by only 2% to 3%; structurally it is a low-growth sector. Overall GDP growth mainly depends on industry and services. But sustaining and expanding these sectors requires large-scale investment."

He said both domestic and private investment had stagnated. "The private sector carries out most production activities, yet credit flow to this sector has fallen significantly. Recent data show private sector credit growth has dropped to around 6% to 6.5%, the lowest in several years."

Mujeri further said, "When investment falls, production does not increase, employment does not grow, and economic activities do not gain momentum. As a result, growth slows. Various economic indicators suggest the economy is currently going through a phase of stagnation, which is reflected in the GDP figures."

He noted that creating an investment-friendly environment was essential to reverse the trend. "To increase both domestic and foreign investment, policy stability, an environment of confidence, discipline in the financial sector, and stronger infrastructure support are needed."

He described this as a major challenge for the current government: how quickly it can restore momentum in the private sector. "If investment increases, production will rise, employment will grow, and overall economic growth will accelerate again," Mujeri added.

Japan aims to help transform India's Northeast into a geopolitical gateway to Southeast Asia by strengthening connectivity to the Bay of Bengal and the Indian Ocean, Deputy Foreign Minister Horii Iwao said on Thursday.

Speaking in Shillong, Horii said Japan remains "firmly committed" to the region's development and views it as a "powerful engine of growth" when integrated into a broader economic grid spanning Nepal, Bhutan, Bangladesh and Southeast Asia, says the Hindu.

The initiative forms part of Japan's Free and Open Indo-Pacific (FOIP) policy, under which Tokyo is working to establish an "Industrial Value Chain" linking India's Northeast to maritime routes. Officials say the objective is to promote holistic regional development by improving connectivity and supply chains.

Under the administration of Prime Minister Sanae Takaichi, Japan is expanding cooperation with India beyond infrastructure projects to include private-sector collaboration in strategic sectors such as semiconductors, economic security and clean energy.

Horii also highlighted renewed efforts to strengthen people-to-people ties between Japan and the Northeast, including social and cultural exchanges.

The push follows recent high-level diplomatic engagements. Indian Prime Minister Narendra Modi met Takaichi, Japan's first female prime minister, at the Group of 20 summit in South Africa in November 2025.

In January 2026, India's External Affairs Minister Subrahmanyam Jaishankar hosted Japanese Foreign Minister Toshimitsu Motegi for talks aimed at deepening the bilateral partnership.

ChatGPT developer OpenAI has secured $110 billion in fresh funding from a group of major technology firms led by Amazon, pushing the company's pre-money valuation to $730 billion.

OpenAI co-founder and CEO Sam Altman said yesterday (27 February) that Amazon has committed $50 billion to the round, while Nvidia and SoftBank will each invest $30 billion.

He added that more investors may join as the funding process continues.

'Unbelievably dangerous': ChatGPT Health may miss life-threatening emergencies, finds study

Amazon will initially invest $15 billion, with the remaining $35 billion to be released over the coming months under certain conditions.

Altman said the partnerships will help expand OpenAI's global reach, strengthen infrastructure and improve financial stability, enabling the company to bring advanced AI tools to more users and businesses worldwide.

He noted that ChatGPT now has over 900 million weekly active users and more than 50 million paying subscribers. According to Altman, AI is entering a new stage where cutting-edge research is rapidly turning into everyday tools used at a global scale.

As part of a multiyear deal, OpenAI and Amazon will introduce new AI capabilities for enterprises, with Amazon Web Services becoming the exclusive third-party cloud provider for OpenAI Frontier.

The two firms will also expand their existing agreement by $100 billion over eight years.

OpenAI said it is also deepening ties with Nvidia, while stressing that its long-standing partnership with Microsoft remains unchanged and central to its strategy.

Reliance Insurance PLC reported an 8% year-on-year decline in net profit to Tk88 crore in 2025, reflecting higher claims and depreciation expenses despite growth in premium income.

The general insurer disclosed its annual financial results after the board approved the accounts at a meeting held on 26 February, according to company sources.

Earnings per share fell to Tk8.42 in 2025, down from Tk9.12 in the previous year. The company said in a price sensitive statement that the decline in profit was mainly due to an increase in claims settlement and higher depreciation costs during the year.

However, the insurer's balance sheet indicators showed improvement. Net asset value per share stood at Tk78.95 with revaluation and Tk75.43 without revaluation, compared to Tk69.59 under both measures a year earlier. The rise in net asset value was attributed to higher retained earnings.

Net operating cash flow per share rose sharply to Tk6.84 in 2025 from Tk1.66 in 2024. The company said stronger cash flow was driven by increased premium income during the year, which helped offset pressure from higher claims expenses.

The board of directors has recommended a 30% cash dividend for shareholders for the year 2025, maintaining the same payout ratio as the previous year.

To secure shareholder approval, the company has scheduled its annual general meeting for 30 April, with 31 March set as the record date.

Listed on the Dhaka Stock Exchange PLC in 1995, Reliance Insurance closed at Tk73.90 on Thursday, with a market capitalisation of Tk770.83 crore.

According to its January shareholding report, sponsors and directors hold 67.95% of the company's shares, while institutional investors own 4.48%. The remaining 27.57% is held by general shareholders.

Gold prices edged up on Thursday as uncertainty over US tariff policy boosted the metal’s safe-haven appeal, while investors awaited further details on US-Iran talks later in the day.

Spot gold was up 0.4 percent at $5,190.01 per ounce, as of 0816 GMT. Bullion had hit a more-than-three-week high on Tuesday.

US gold futures for April delivery were down 0.4 percent at $5,206.80.

The US dollar eased, making dollar-denominated commodities more affordable for holders of other currencies.

“Iran-US persisting tensions and the uncertainty surrounding the global economy with (President Donald) Trump’s tariffs are a bullish catalyst,” said Carlo Alberto De Casa, external analyst at banking group Swissquote.

US envoy Steve Witkoff and Trump’s son-in-law Jared Kushner are due to meet an Iranian delegation for a third round of nuclear talks later in the day in Geneva.

Trump briefly laid out his case for a possible attack on Iran in his State of the Union speech on Tuesday, saying he would not allow a country he described as the world’s biggest sponsor of terrorism to have a nuclear weapon.

Non-yielding gold is seen as a safe store of value during times of geopolitical and economic uncertainty.

The US tariff rate for some countries will rise to 15 percent or higher from the newly imposed 10 percent, US Trade Representative Jamieson Greer said on Wednesday, without naming any specific trading partners or giving further details.

Gold prices scaled a record high of $5,594.82 on January 29 and were up 20 percent so far this year.

“The global gold rush does not seem to be over... Overall the sentiment remains positive with strong buys coming from Asia and from Central Banks,” De Casa said.

On the data front, investors await the weekly US jobless claims data, due later in the day.

Stocks maintained strong upward momentum today (26 February) as trading activity surged at the Dhaka bourse following the appointment of a new governor at Bangladesh Bank, with turnover soaring 68%.

The benchmark DSEX of the Dhaka Stock Exchange advanced 45 points, or 0.81%, to close at 5,600, regaining the key psychological level after recent volatility. The blue-chip DS30 index rose 17 points, also 0.81%, to finish at 2,169.

Market breadth remained firmly positive, as 239 issues advanced, 93 declined and 59 remained unchanged, reflecting broad-based buying.

Turnover climbed sharply to Tk947 crore, signalling renewed investor participation and improved liquidity. Market capitalisation also increased, supported by gains in large-cap stocks.

Major contributors to the ryesally included Islami Bank Bangladesh, Beximco Pharmaceuticals, City Bank, Eastern Bank and Robi Axiata, whose price appreciation lifted the indices.

Mostaqur Rahman FCMA was appointed governor of Bangladesh Bank for a four-year term on Wednesday, replacing Ahsan H Mansur.

Market observers noted that Mostaqur's prior experience as a board member of the Chittagong Stock Exchange between 1998 and 2000 underscores his familiarity with the capital market.

Minhaz Mannan Emon, director of the DSE and managing director of BLI Securities Limited, told The Business Standard that the day's rally and transaction growth had no direct correlation with the governor's appointment.

However, he voiced optimism about the new governor's integrity and longstanding engagement with national economic affairs, suggesting such factors could bolster investor confidence.

He also said the formation of a new government by the Bangladesh Nationalist Party has generated expectations of administrative changes across key institutions.

Speculation regarding potential leadership changes at the Bangladesh Securities and Exchange Commission may also be shaping investor sentiment, he added.

According to EBL Securities' daily market review, the capital market extended its recovery from a brief correction phase, driven by broad-based buying.

While mid-session profit-taking briefly slowed the rally, renewed buying interest in the latter half pushed the indices higher by the close.

Sector-wise, banking stocks dominated turnover with a 22% share, followed by pharmaceuticals (18.7%) and telecom (9.1%). All sectors ended in positive territory, led by ceramic (up 3.1%), IT (2.3%) and travel (2.3%).

City Bank, Robi, Orion Infusion, Khan Brothers PP Woven Bag and BRAC Bank topped the turnover chart.

Several loss-making firms featured among the gainers, including Familytex, BIFC, Union Capital and ICB Islamic Bank, each posting the maximum 10% rise.

Meanwhile, the Chittagong Stock Exchange PLC also closed higher. The CSCX index gained 69 points to 9,587, while the CASPI advanced 128 points to 15,597.

Turnover at the port city bourse stood at Tk19.54 crore, reflecting positive sentiment across both trading floors.

Stocks featured in EBL Securities Ltd's 2026 watch list have posted robust gains in the first two months of the year, slightly outperforming the broader market amid rising optimism over political clarity and improving macroeconomic conditions at the Dhaka Stock Exchange.

According to the brokerage, its recommended stocks generated an average return of 15.8% between 30 December 2025 and 26 February 2026. Over the same period, the benchmark DSEX index climbed 15.1%, rising from 4,865 points at the end of December to 5,600 points on 26 February.

Leading the watch list was Confidence Cement, which surged 42% from Tk49.2 to Tk69.8. City Bank advanced 35.2% to Tk33, while Beximco Pharma gained 29% to Tk131.6. Bank Asia rose 20.3% to Tk21.9, and Prime Bank increased 18.8% to Tk34.1. IDLC Finance returned 18.8%, followed by Eastern Bank with 18.1% and BSRM Steels with 17.3%.

Large-cap stocks also supported overall performance. Walton and BAT Bangladesh each added 10.4%. Olympic Industries rose 14.8%, while Reliance Insurance gained 13.3%. Sena Insurance advanced 15.9%, and Bangladesh Submarine Cable climbed 15.3%. Robi increased 16.7%, while Berger Paints Bangladesh, Eastern Housing, and Envoy Textile recorded moderate gains. Even relatively conservative stocks such as MJL Bangladesh, ITC, and Matin Spinning delivered positive returns.

Rayhan Ahmed, senior research associate at EBL Securities, told The Business Standard that the market is witnessing a broad-based resurgence after four subdued years. He attributed the recovery to political clarity and supportive macroeconomic tailwinds, noting that the firm's "Yearly Market Update 2025 and Outlook 2026" watch list has returned around 16% so far this year.

He added that disciplined, fundamentals-driven stock selection combined with timely assessment of market sentiment can generate superior returns, and expressed optimism that a growth-oriented fiscal stance and greater regulatory certainty under the newly elected government will help sustain the market's momentum.

The per capita income in Bangladesh rose by 1 percent year-on-year to $2,769 in the 2024-25 fiscal year, according to final data from the Bangladesh Bureau of Statistics.

The per capita income was $2,738 in 2023–24.

In local currency, the figure stood at Tk 334,511 in 2024-25, up from Tk 304,102 in the previous year.

In FY25, the size of the Bangladesh economy increased to $456 billion from $450 billion a year earlier, although it was lower than the earlier estimate of $462 billion.