The Bangladesh Securities and Exchange Commission (BSEC) has removed LR Global Bangladesh Asset Management Company Limited from its position as asset manager of six mutual funds.

The decision was taken after allegations of violations of securities laws and mutual fund regulations, failure to perform fiduciary duties, and serious harm to the interests of unit holders were proven, according to regulatory sources.

The decision was made during a BSEC board meeting earlier this month. The funds managed by LR Global Bangladesh Asset Management Company Limited include DBH First Mutual Fund, Green Delta Mutual Fund, AIBL First Islamic Mutual Fund, LR Global Bangladesh Mutual Fund-1, NCCBL Mutual Fund-1, and MBL First Mutual Fund.

BSEC stated that the decision was taken to protect public interest and investors' money. Trustees of the respective funds have been instructed to take the necessary follow-up actions. The company's registration cancellation process is also ongoing.

Regarding the matter, BSEC Director and spokesperson Md Abul Kalam told TBS, "The asset manager, LR Global Bangladesh, has failed in its duties, violated securities laws and mutual fund regulations, engaged in money laundering, and seriously harmed unit holders' interests. Therefore, the appointment of LR Global Bangladesh as asset manager of the six funds has been cancelled. The company's registration cancellation process is also ongoing."

He added that trustees of the funds will be instructed via letters to take necessary legal action. The trustees will implement the actions accordingly. However, it is not yet confirmed which company will be assigned to manage these six funds. Sources say that the trustees are looking for a new asset manager, but no final decision has been made yet, as the funds need to be audited before they can be transferred to a new manager.

BSEC's review found that LR Global Bangladesh Asset Management Company Limited invested in 51% of Padma Printers & Colors Limited (later renamed Quest BDC Limited) from the six managed funds, buying each share at Tk289.48 for a total of about Tk23.6 crore. An additional Tk4,50,19,800 was invested as share money deposit, which was later converted into 2 crore 83 lakh and 50 thousand ordinary shares.

The commission noted that the investment was made without proper financial analysis, violating Mutual Fund Rules, 2001 (Rule 56), and securities laws, resulting in significant financial losses to unit holders.

BSEC further stated that although Quest BDC Limited was approved to issue shares at Tk10.60, LR Global purchased them at Tk15.88. Meanwhile, its sister concern LRG Venture Limited purchased the same shares at Tk10. The dividends from LRG Venture would go to LR Global, meaning unit holders of the six funds would not receive any profit. According to the commission, this is a clear case of conflict of interest and dual practice, violating mutual fund regulations.

Moreover, despite BSEC's instructions, more than 15% of a single company's paid-up capital was purchased from a single fund, causing financial losses to unit holders. Additionally, Brigadier General Sharif Ahsan was appointed as director and managing director of Quest BDC Limited from AIBL First Islamic Mutual Fund, with a monthly salary of Tk3 lakh while simultaneously serving as MD/CEO of Sonali Securities Limited. BSEC stated that this violated mutual fund regulations. The company also did not obtain trustee or commission approval for the appointment.

Regarding audits, LR Global cited a court status quo, but BSEC clarified that the order was valid only until December 3, 2025, and there was no legal barrier to auditing. Since 2022, investments in Quest BDC have yielded no profit, and being in the OTC market, share disposal opportunities are limited. As these funds are closed-end, selling the shares at maturity may face complications. BSEC noted that such investments demonstrate negligence in the responsibilities of the asset manager.

Overall, BSEC concluded that LR Global's mismanagement and regulatory violations failed to protect unit holders' interests, questioning the company's competence, efficiency, and accountability. Trustees are now looking for a new asset manager.

Earlier, on October 21, 2025, Quest BDC directors, LR Global's Chief Investment Officer Riaz Islam, and former BSEC Chairman Professor Shibli Rubayat-Ul-Islam were permanently banned from capital market activities. Riaz Islam and other officials were fined a total of Tk109 crore, and money laundering allegations were forwarded to the Anti-Corruption Commission.

A high-level delegation from the International Monetary Fund is due in Dhaka next month for talks with Prime Minister Tarique Rahman, as Bangladesh hopes to keep its multi-billion-dollar loan programme on track and unlock a delayed $1.30 billion disbursement.

A three-member IMF team will visit on 9-10 March and will be led by Krishna Srinivasan, director of the Fund's Asia and Pacific Department, according to finance ministry officials.

The IMF withheld a tranche last December during the interim administration, saying further disbursements will follow discussions with an elected government.

Officials at the ministry believe that if discussions with the IMF prove fruitful and the BNP government commits to implementing agreed conditions, Bangladesh will receive $1.30 billion by June, combining the pending December tranche with the next scheduled instalment.

They said the funds would help address the government's budget deficit at a time when revenue collection growth has slowed.

Following receipt of a formal letter from the IMF, the Economic Relations Division (ERD) has written to Principal Secretary ABM Abdus Sattar requesting that a one-hour meeting slot be allocated for the prime minister on either 9 or 10 March.

In a letter dated 23 February, the ERD said the IMF intends to meet with the prime minister to discuss and review the progress of reforms undertaken under its programme, assess their successful completion, and reaffirm continued cooperation with the new government.

A senior finance ministry official, speaking on condition of anonymity, said key IMF conditions – including revenue mobilisation targets – have not yet been met.

Other pending issues include the restructuring of the National Board of Revenue (NBR), ensuring greater independence for the Bangladesh Bank, and fully adopting a market-based exchange rate.

However, the official noted that the BNP, both in its election manifesto and after forming the government, has pledged to advance economic reforms, establish an Economic Reform Commission, abolish the Financial Institutions Division to strengthen Bangladesh Bank, and continue financial sector reforms.

One of the IMF's major conditions is reducing subsidies while expanding social safety nets. The new finance minister, Amir Khosru Mahmud Chowdhury, has already instructed officials to explore ways to rationalise subsidies, the official said.

The government has also prioritised expanding social protection coverage, beginning with the distribution of family cards. Recently, the finance minister also assured the central bank governor that ongoing banking sector reforms will continue.

"If the BNP implements its manifesto commitments, many IMF conditions will be fulfilled. On that basis, the government is waiting with a positive outlook to keep the IMF programme on track," the official said.

The IMF loan programme

Bangladesh signed a $4.7 billion loan agreement with the IMF on 30 January 2023, amid economic strain triggered by the Covid pandemic and the Russia-Ukraine war.

The programme included conditions such as revenue reform, banking sector restructuring, and subsidy reduction. The IMF later extended the programme by six months in June last year and added $800m, bringing the total package to $5.5 billion.

So far, Bangladesh has received $3.64 billion under five tranches: $476.3 million in February 2023, $681 million in December 2023, $1.15 billion in June 2024, and $1.33 billion in June 2025. That leaves $1.86 billion yet to be disbursed.

The IMF had been due to release another tranche last December but withheld it pending discussions with an elected government.

At the IMF-World Bank annual meetings in Washington last October, the lender informed then finance adviser Salehuddin Ahmed and Bangladesh Bank Governor Ahsan H Mansur that the next disbursement would follow talks with the elected administration.

After the IMF decided not to release a loan tranche, Salehuddin said in November that the Fund would also discuss how much loan support the elected government intends to seek.

What economists think about the visit

Zahid Hussain, former lead economist at the World Bank's Dhaka office, told TBS that the visit reflects the IMF's earlier position that future decisions would follow talks with an elected government.

He noted that the interim administration did not reissue the Bangladesh Bank Order and that the NBR split remains incomplete.

"Although Bangladesh Bank has said the exchange rate is market-based, the IMF has raised questions about the way it is purchasing dollars from the market. This is inconsistent with a contractionary monetary policy and has injected Tk65,000 crore into the market," he said.

The IMF may emphasise these issues during discussions, he added, and the government will need to demonstrate commitment to reform.

Towfiqul Islam Khan, additional director (research) at the Centre for Policy Dialogue (CPD), said most IMF reform demands align with the BNP's election manifesto.

However, he noted that the IMF had raised concerns in January over Bangladesh's debt sustainability, an issue not detailed in the party's manifesto.

He described banking sector reform as the government's biggest challenge under IMF conditions. While the BNP has pledged to return funds to depositors of troubled banks, it has not clarified whether repayments would cover only individual customers or institutional clients as well.

The IMF has also sought greater independence for the Bangladesh Bank. The new finance minister's proposal to abolish the Financial Institutions Division and strengthen the central bank could address that demand.

Subsidy management will remain another major challenge, economists say, given its links to gas and electricity pricing as well as export incentives.

"The IMF does not provide very large sums per tranche," Towfiqul said. "But other development partners' budget support is often linked to an active IMF programme. If the programme continues, others are more willing to lend."

He added that while many IMF-backed reforms align with domestic policy priorities, the government should seek technical support from the Fund and implement reforms in line with Bangladesh's own context.

The National Board of Revenue (NBR) has taken steps to facilitate tax return filing by Bangladeshis staying abroad.

In a statement released yesterday, the tax authority said it has introduced a special registration system for Bangladeshi taxpayers abroad so they can submit e-returns by receiving one-time passwords (OTP) through their email instead of mobile phones.

The NBR said taxpayers who have signed up for electronic tax return filing through biometrically registered phones but are currently abroad -- and therefore cannot reset their passwords using mobile OTP -- can now complete verification through their email.

To do so, taxpayers abroad are required to apply to the NBR from their own email address by providing copies of their passport, national identity card, and visa page, along with their foreign address, overseas phone number, and the date of their last departure from Bangladesh. The application must be sent to ereturn@etaxnbr.gov.bd for email verification.

After examining the application and verifying the information and email address, the NBR will send an OTP to the verified email, allowing taxpayers to reset their password and complete registration and e-return submission.

The tax administration’s move comes as the deadline for filing returns for the 2025-26 tax year is set to expire this month.

So far, nearly 39 lakh individual taxpayers have filed their income tax returns electronically.

Stocks edged lower today (24 February) as cautious investor selling pressure dragged the benchmark index into negative territory, despite sustained participation across sectors at the Dhaka bourse.

The DSEX, the broad index of the Dhaka Stock Exchange (DSE), shed 10 points to close at 5,542. In contrast, the blue-chip DS30 index managed to post a modest gain of 6 points to settle at 2,143, indicating selective buying in large-cap stocks.

Of the total issues traded, 119 advanced, 221 declined and 57 remained unchanged.

Turnover rose 15% from the previous session to Tk825 crore, reflecting active trading despite the market's downward drift.

According to EBL Securities in its daily market review, the capital market witnessed a modest pullback following the previous session's recovery momentum, as cautious selling resurfaced on the trading floor. However, the brokerage noted that sustained investor participation signalled underlying resilience in the broader market trend.

From the outset, the session was marked by range-bound trading, with the index failing to cross the 5,600 level as investors remained active on both sides. Selling pressure intensified in the final hour of trading, ultimately pushing the benchmark index into the red by the close.

Major index draggers included Islami Bank, Olympic Industries and Grameenphone, whose price corrections weighed heavily on the market.

Sector-wise, banking stocks accounted for the highest turnover at 26%, followed by pharmaceuticals at 11.5% and textiles at 9.5%. Most sectors posted negative returns, with paper declining 2.1%, ceramic falling 1.4% and general insurance losing 1.3%.

Meanwhile, IT gained 1.1%, services edged up 0.4% and tannery rose 0.2%.

Several loss-making companies led the gainers' chart. Ring Shine Textile rose 10%, Intech Limited gained 9.93% and Aziz Pipes advanced 9.71%. On the losing side, Miracle Industries fell 5.15%, GBB Power declined 4.76% and Saif Powertec dropped 4.54%.

TakaPay card, the first-ever national debit card, has failed to secure a significant foothold in the two years since its launch by the central bank, aimed at reducing dependency on global payment networks such as Visa and Mastercard.

Data from the Bangladesh Bank (BB) showed a recent uptick in issuance and transactions through the TakaPay card. However, the number of cards, transactions and the amount of transactions still remain very low.

In December last year, Bangladesh recorded Tk 50,281 crore in transactions through local and foreign currency cards, the highest in six months. Of that, transactions through TakaPay were Tk 189 crore, which was less than half a percent of the total card-based transactions during the month.

Initiated by the central bank, the TakaPay card was launched in early November 2023 by the deposed prime minister, Sheikh Hasina, to save foreign currencies
The month before, transactions using the TakaPay card were Tk 157 crore, which was 0.33 percent of total transactions of Tk 47,536 crore through local and foreign currency cards.

Initiated by the central bank, the TakaPay card was launched in early November 2023 by the deposed prime minister, Sheikh Hasina, to save foreign currencies, at a time when the country was struggling to contain the fall of forex reserves. On October 31, 2023, Bangladesh’s readily usable forex reserves were below $20 billion.

The initiative also came in line with other countries that have already issued their own currency cards. For example, Sri Lanka uses ‘Lankapay’, Pakistan has ‘Pakpay’, India employs ‘RuPay’ cards, and Saudi Arabia has ‘Mada’.

Initially, three banks -- BRAC Bank, City Bank PLC and Sonali Bank PLC -- joined the foray to issue the TakaPay card, which can be used for cash withdrawals from ATMs and point of sale machines, and e-commerce transactions.

Later, 14 more banks joined. Yet, progress in the adoption of the card has been slow, mainly due to low awareness of the card among people, lack of push from banks, limited usability, and lack of benefits or incentives offered by the authorities to encourage users.

“Responses from customers have been slow. Not all banks are issuing the card,” said Md Shafquat Hossain, deputy managing director and head of retail banking at Mutual Trust Bank PLC.

MTB PLC encourages customers to opt for the TakaPay card during the opening of accounts through its agent banking outlets. “Its annual fee is lower than that of cards issued by global payment gateways,” he said.

A senior official of another private bank said the TakaPay card cannot be used for international transactions. So, customers who travel abroad or purchase from foreign markets will not take the card, he said. Besides, ATMs of all the banks are not configured to allow transactions through the TakaPay card.

“Not all the ATMs accept the card. This limits the usage of the TakaPay card,” he said. “To make the card lucrative, the authority should add some unique features to the card and motivate banks,” he said.

Md Mahiul Islam, deputy managing director and head of retail banking at BRAC Bank, said his bank is also issuing the card through its agent banking network in suburban areas.

“We are offering the card to those who do not want to do foreign transactions,” he said.

A senior official of the BB said the main rollout of the TakaPay card started in mid-2024. The progress slowed for six months after the political changeover in August of the same year. “We have been registering some progress for the last six months,” he said.

While e-commerce transactions cannot be done through the Takapay card yet, the BB wants to introduce this feature in the second half of this year, the official said.

“Once it is done, we expect a good impact,” he said. “We shall encourage banks to issue the card then.”

“As transactions through the Takapay card take place through the National Payment Switch of Bangladesh (NPSB), banks do not need to spend extra to facilitate payments,” the official said, adding that with increased usage of this card, the cost for banks will decline.

The United States imposed a new tariff from Tuesday of 10 percent on all goods not covered by exemptions, the US Customs and Border Protection said, the rate first announced by President Donald Trump on Friday rather than the 15 percent he promised a day later.

Reacting to the US Supreme Court ruling that threw out tariffs it deemed were illegally justified on grounds of an emergency, Trump initially announced a new temporary global tariff of 10 percent. He said on Saturday he would increase it to 15 percent.

But in a notice described as intended to "provide guidance regarding the February 20, 2026 Presidential Proclamation," CBP said that, aside from products covered by exemptions, imports would "be subject to an additional ad valorem rate of 10 percent."

Unclear why lower rate is imposed

The move added to confusion surrounding US trade policy, with no explanation offered in the notice for why the lower rate had been used. The Financial Times quoted a White House official as saying the increase up to 15 percent would come later. Reuters could not immediately confirm this.

"Remember that Trump is delivering the State of the Union address tonight, so it's possible we might get a better sense of the next steps on tariffs," Deutsche Bank said in a note.

"Net-net we still think the effective tariff rate will fall this year and that the world post-SCOTUS will see lower tariffs than the pre-SCOTUS world," its analysts said, using the acronym for the Supreme Court of the US.

Despite the fact that a 10 percent tariff is less punitive than had been expected, traders cited uncertainty about the trade outlook as one reason why European shares opened lower on Tuesday, although the pan-European STOXX 600 index was later trading flat.

The new tariffs took effect at midnight, while collection of the tariffs annulled by the Supreme Court was halted. They had ranged from 10 percent to as much as 50 percent.

It remains unclear whether and how companies will be refunded for tariff payments made under the regime annulled by the Supreme Court.

The Section 122 law allows the president to impose the new duties for up to 150 days to address "large and serious" balance-of-payments deficits and "fundamental international payments problems."

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Trump's tariff order argued that a serious balance-of-payments deficit existed in the form of a $1.2 trillion annual US goods trade deficit, a current account deficit of 4 percent of GDP and a reversal of the US primary income surplus.

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On Monday Trump warned countries against backing away from any previously negotiated trade deals with the US, warning he would hit them with much higher duties under different laws.

Japan said it had asked the United States to ensure its treatment under a new tariff regime would be as favourable as in an existing agreement. The European Union, Britain and Taiwan all indicated a preference to stick to their deals too.

Carsten Brzeski, global head of macro at ING, noted that even with the 150-day limit of the current set of measures, the trade uncertainty was unlikely to go away soon.

"Because the next thing that he (Trump) could do is always, with the interruption of one day, theoretically endlessly extend by 150 days," he said.

China meanwhile urged Washington to abandon its "unilateral tariffs", indicating it was willing to hold another round of trade talks with the world's largest economy, the country's commerce ministry said in a statement on Tuesday.

The country's garment manufacturers and exporters have sought the urgent release of outstanding cash incentives and a Tk14,000 crore low-interest "soft loan" to help factories pay workers' wages and bonuses ahead of Eid-ul-Fitr.

In a letter to Bangladesh Bank Governor Ahsan H Mansur, the Bangladesh Garment Manufacturers and Exporters Association said the support was needed to ease potential cash-flow pressure in the run-up to the festival.

A two-member BGMEA delegation – Senior Vice-President Inamul Haq Khan Bablu and Vice-President Shehab Udduza Chowdhury – handed the letter to the governor during a meeting today afternoon (24 February).

Speaking to reporters after the meeting, Shehab said around Tk5,700 crore in cash incentives for the ready-made garment sector remains unpaid.

"We have requested that the outstanding incentive funds be released quickly so that factories do not face difficulties in paying wages and Eid bonuses," he said.

In addition, the association has asked for a soft loan equivalent to two months' wages on easy terms.

According to BGMEA estimates, the sector's monthly wage bill stands at about Tk7,000 crore. That means factories would require roughly Tk1,400 crore to cover two months' wages – the amount mentioned in the letter as the proposed soft loan.

Shehab further noted that not all factories receive incentives equally. Woven and sweater factories, in particular, receive comparatively lower support, putting them under greater strain when it comes to paying wages.

He added that in February and March, nearly 25 out of 60 days were affected by public holidays and election-related closures. "Paying 60 days' wages after only 35 working days will be difficult for many factories," he said.

The governor has assured the delegation that he would speak to the relevant ministry regarding the quick release of incentive funds, according to BGMEA.

On the issue of salary support, he advised the association to approach the Ministry of Finance. The governor made no negative remarks and received the proposals positively, the BGMEA leaders claimed.

Call for priority for SMEs

The BGMEA has also called for special priority for small and medium enterprises, warning that SMEs may be deprived under the existing "first in, first out" system used in distributing incentives.

The association said a separate mechanism is needed for SMEs and has sent a letter to the relevant ministry proposing the creation of a dedicated fund for the sector.

It suggested that funds allocated from the budget should first be distributed to SMEs on a priority basis, with the remaining amount disbursed to other factories.

Shehab said the governor responded positively and instructed the relevant department to look into the matter. He expressed hope that the change could be implemented in the next round of incentive distribution.

Responding to questions about why the association approached the central bank when incentive funds are allocated by the government, the BGMEA said it had already written to the Ministry of Finance and held meetings with the finance minister and finance secretary.

The meeting with the governor was part of regular policy coordination, it added.

Asked why such loan demands arise before Eid each year, the BGMEA leaders said the current situation is different.

They cited recent political unrest, protests, labour dissatisfaction, and the election climate as factors affecting industrial activity. They also said the export sector has come under pressure from tariff policies introduced by US President Donald Trump.

Export growth has remained negative for the past seven months, according to the association. In this context, the BGMEA said, quick support is needed to help sustain the industry.

Revenue collection in January grew by only 3.2% year-on-year – the weakest in recent months – signalling stress in trade flows and slowing economic activity.

With customs revenue remaining volatile and domestic demand softening, the slowdown threatens to complicate the new government's fiscal management in the months ahead.

The January figure marks a sharp deceleration from the robust growth recorded earlier in the fiscal year, when monthly collections expanded by 18% to 25% between July and September. Although revenue growth remained in double digits through much of the first half, January's modest increase indicates that the initial rebound in imports and domestic activity is losing momentum.

In January alone, revenue collection fell short of the target by Tk15,000 crore.

According to updated data released by the National Board of Revenue (NBR) today (23 February), revenue collection during the first seven months (July–January) of the current fiscal year fell short of the target by more than Tk60,000 crore.

Although revenue growth during the July–January period stood at around 13%, actual collection reached Tk2.63 lakh crore against a target of Tk2.83 lakh crore.

Breaking with convention after the last budget, the government revised the annual revenue target upward by Tk54,000 crore midway through the fiscal year, raising it to Tk5.54 lakh crore.

NBR data show that over the past seven months, average monthly revenue collection stood at slightly below Tk32,000 crore. To meet the revised target, however, the revenue authority would need to collect more than Tk66,000 crore per month on average for the remaining months of the fiscal year.

Experts say this is not realistically achievable.

Dr Fahmida Khatun, Executive Director of the Centre for Policy Dialogue (CPD), told The Business Standard, "The economy has not gained the kind of momentum that would allow the NBR to collect revenue at such a high rate. As a result, the government is heading towards another large shortfall this fiscal year."

She added that the new government under Tarique Rahman has incorporated additional spending commitments in its election manifesto, including family cards and agricultural loan waivers. If expected revenue is not realised, fiscal pressure on the new administration will intensify.

While revenue growth exceeded 15% in six of the seven months of the fiscal year, officials were unable to explain the sudden drop in January. When contacted, a senior NBR official said he could not specify the reason behind the sharp slowdown.

Data analysis shows that import tax collection in January actually declined by 1.31% compared to the same month last year. Value-added tax (VAT) collection grew by only 2.57%, while income tax recorded relatively better growth at 7%, though still modest.

Nearly 90% of import tax is collected through Chattogram Custom House. When contacted, Mohammad Shafi Uddin, Commissioner of Custom House Chattogram, said the customs house recorded 15% growth in January. Why overall growth remained weak despite this remains unclear.

Explaining the underperformance in revenue collection, Fahmida Khatun cited slow investment and sluggish economic growth as major factors. She also pointed to institutional capacity constraints within the NBR, saying the tax net is not expanding and tax evasion is not being effectively curbed.

"Necessary reforms to boost revenue collection have largely not been implemented," she said. "As a result, prospects for stronger revenue performance in the coming months also appear limited."

The general election held on 12 February has reduced near-term political and policy uncertainty in Bangladesh, a development that could bolster macroeconomic stability, according to Fitch Ratings.

However, in a report released on 22 February US time, the global ratings agency cautioned that the ultimate impact on the country's credit profile will depend on the new government's ability to execute critical reforms to address weak governance, banking-sector fragilities, and a fragile external liquidity position.

Fitch noted that the supermajority secured by the BNP-led alliance, coupled with a successful referendum, provides a clear mandate for constitutional and economic shifts.

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The BNP won 209 seats, while the Jamaat-e-Islami and its allies secured 77 of the 299 contested seats.

This two-thirds majority is expected to support the implementation of the government's policy agenda and reduce the risk of a political vacuum that could otherwise complicate economic decision-making, according to Fitch's report.

The ratings agency highlighted that the referendum approval could pave the way for institutional strengthening, including a shift to a bicameral legislative system, enhanced judicial independence, and the institution of term limits for the prime minister.

Despite these positive signals, Fitch warned that implementation remains complex and execution risks remain elevated.

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It also noted that political polarisation and the military's potential role in politics continue to pose lingering risks.

Fitch observed that the BNP's manifesto signals a commitment to continuing the economic and fiscal reforms initiated during the caretaker government period.

The agenda also points to higher social spending, which could, in Fitch's observation, add pressure to public finances if revenue‑mobilisation measures underperform, and would test the authorities' ability to balance growth and electoral commitments with fiscal consolidation.

Additionally, this agenda aligns with the $5.5 billion International Monetary Fund (IMF) programme running through 2026-2027 since 2023.

A centrepiece of this fiscal plan is a medium-term goal to raise the tax-to-GDP ratio to 10% through tax administration reforms and a broader tax base.

Bangladesh’s forex reserves rise to $29.86b

"This matters for credit quality because Bangladesh's structurally low revenue intake remains a key weakness," states the report.

Fitch currently projects government revenue-to-GDP to reach 8.6% by the 2027 fiscal year, up from 7.8% in FY25.

The agency further noted a pro-private-sector tilt in the new government's stance, aiming to lift foreign direct investment to 2.5% of GDP from a Fitch-estimated 0.4% in FY25.

The BNP's pledges to tackle non-performing loans and improve banking governance were also cited as essential steps to addressing constraints on the sovereign credit profile.

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On the external front, foreign-exchange reserves showed improvement, reaching $29.7 billion as of 10 February, compared to $22.3 billion in June 2024.

The Fitch report concluded that a manageable external debt repayment profile and the prevalence of government-backed debt help contain refinancing risks, but also underscore the importance of maintaining macro-stabilisation policies that keep external financing risks in check.

Far from being a source of relief, the Supreme Court's takedown of President Donald Trump's tariffs has infused new risks and uncertainties into trade policy, US debt and the dollar.

The Court made no decision on refunds, leaving open the possibility of a hole of around $170 billion in US finances. Trump's furious rush to impose replacement levies has already raised hackles in Europe and fresh confusion about trade policy.

The dollar slid through Monday in Asia, most notably against havens such as the Swiss franc and yen, while Treasuries have been stumped as markets struggled to come to grips with risks to the fiscal position and untangle the implications for inflation.

The clearest takeaway seems to be that Trump's replacement tariffs are lower and should ease short-term price pressures. But the Court has also crimped his power and the consequences of that for markets and the economy are unpredictable.

"Uncertainty is back, and given the latest muscle-flexing by European leaders, the risk of escalation is now higher than it was a year ago," ING analysts said in a note.

For Treasuries, one risk is litigation in pursuit of refunds - something likely to spend months in lower courts.

Estimates for the revenue raised so far by tariffs run above $175 billion, a modest piece of total projected revenues of more than $5 trillion, but enough to risk extra fundraising.

Dan Siluk, head of global short-duration and liquidity at Janus Henderson, said refunds will mean higher debt issuance.

"At the margin, that raises the risk of further steepening pressure at the long end of the curve, particularly if refund-related issuance coincides with already elevated borrowing needs and ongoing QT (quantitative tightening)," he said.

Yields on 10-year Treasuries moved a touch higher to 4.1% on Friday but have come down from peaks above 4.5% in mid-2025, alongside signs of cooling inflation and expectations for Fed rate cuts. The curve has steepened, led by a drop in short-term yields.

On Monday, the cash market was closed in Asia owing to a holiday in Tokyo but the futures-implied yield was a fraction lower at 4.05%.

"Markets are currently focused on the short-term impact – namely, lower inflation and interest rates falling more quickly," said Alberto Conca, chief investment officer at LFG+ZEST in Lugano, Switzerland.

"I think that's rather short-sighted, though, because it increases an already enormous deficit, and yield curves ought to steepen more significantly given that the US government's finances are, effectively, out of control."

Revenue uncertainty

The Congressional Budget Office had estimated that Trump's tariffs would generate about $300 billion annually over the next decade for the world's largest economy.

Trump's 15% replacement tariff lasts only for 150 days and it is not yet clear exactly when or on whom it would be imposed. Some, including Britain and Australia, had 10% rates under the former rule, while many Asian countries had higher rates.

"The bond market faces the biggest concern," said Gene Goldman, chief investment officer at Cetera Investment Management, citing bigger issuance should the government be forced to issue refunds while also footing other stimulus bills.

To be sure, the market has not reacted significantly and there is a view that a longer-lasting fallout can be avoided.

Analysts at Morgan Stanley are in the camp that the debt market will not worry much about the fiscal deficit, both because Trump will find substitutes for tariffs and because any potential extra funding will be via shorter Treasury bills.

Trump also may not be able to fulfil his wish to give every American a $2,000 tariff dividend cheque, which would have been another source of some inflation.

Still, another round of policy and revenue uncertainty is underway. So far the reaction of the dollar has been to extend losses - it shed about 0.4% on the euro on Monday, for a drop nearing 12% since Trump's second term began in early 2025.

The outlook hinges on how traders look through the chaos. Barclays analysts said the Supreme Court's ruling could be seen as an example of checks and balances in operation, and should take some of the risk premium out of US assets and the dollar.

Others are focused on inflation.

"When you have this much liquidity and lowering of tariffs this all fuels growth and causes rates to rise," said Eddie Ghabour, CEO at Key Advisors Wealth Management in Delaware.

"These things can also cause inflation to accelerate in the months to come. I think the bond market is sniffing this out."

The National Board of Revenue (NBR) has started budget-related work for the fiscal year 2026-27 and has sought proposals from business bodies and other relevant organisations.

According to the NBR, letters have already been sent on 18 February from the budget-related departments asking them to submit their proposals and recommendations on the budget to the NBR by 15 March.

In a letter to the business bodies, signed by Barrister Badruzzaman Munshi, second secretary of the NBR's VAT wing, the agency said, "You are requested to send your organisation's opinions with the aim of rationalising the tax-to-GDP ratio, facilitating ease of doing business, and resolving procedural complexities."

Sources at the NBR said pre-budget discussions with business representatives and other stakeholders may begin by the last week of this month in preparation for the next budget. To this end, the NBR has also formed a committee, appointing a first secretary of NBR as the chief budget coordinator, sources said.

This will be the first budget for the new government led by the BNP. Although budgets during the previous two BNP governments were prepared under the leadership of late finance minister M Saifur Rahman, this time the budget will be prepared under the leadership of Finance Minister Amir Khasru Mahmud Chowdhury.

He has already provided preliminary directions during a meeting held last Saturday with officials from the NBR and other relevant departments regarding the budget, according to officials.

Foreign investment in the country's stock market weakened in 2025, with overseas investors pulling out a net Tk270 crore from equities amid economic fragility, market volatility and pre-election uncertainty, according to data from the Dhaka Stock Exchange.

The data shows that foreign investors sold shares worth Tk2,095.34 crore in 2025, while purchasing stocks valued at Tk1,825.07 crore, resulting in a net negative position of Tk270 crore for the year.

Analysts and insiders said foreign investors remained cautious in the capital market ahead of the February 2026 election amid political and economic uncertainty, continuing to withdraw funds throughout the year.

Reviewing the 2025 trading data, they believe that following the election, foreign investors' confidence in the market has improved, which is expected to turn their net position positive in the coming months.

A fortnightly data for February (1 to 15) showed that in the first 15 days, foreign trading year-on-year increased by 48% to Tk173 crore, which was Tk116.63 crore in the same time of 2025.

Ahsanur Rahman, CEO of BRAC EPL Stock Brokerage, a key brokerage house for foreign investors, told The Business Standard, "Foreign investors were more cautious in 2025 due to the upcoming election and economic uncertainty."

He said that following the election, investors' confidence increased. "In post-election trading, foreigners have turned more bullish in the market and they are concentrating on buying good and fundamental stocks."

He expressed hope that foreign investors' net investment position would turn positive in February, as their investments are likely to exceed their sales.

Md Ashequr Rahman, managing director of Midway Securities, also expressed hope that foreign investment in the capital market is likely to increase after the election, as he has observed fresh fund inflows into the market.

He said that due to various factors – including the prevailing economic conditions – foreign investors remained very cautious, which is why they continued to withdraw funds.

"If the capital market functions properly and the supply of quality stocks is ensured, foreign fund inflows may increase in Bangladesh, as many investors are now shifting towards emerging and frontier markets," he added.

Additionally, reform initiatives by the capital market regulator, the Bangladesh Securities and Exchange Commission, kept the market at a standstill as no IPO to raise funds, and some actions for manipulation led to market volatility.

The existing commission was formed by the interim government in August 2024 after the student-led uprising.

In 2025, foreign turnover in stocks – both buying and selling – slightly increased by 8% to Tk3,920 crore compared with 2024.

Foreign investors withdrew significant funds from stocks in 2024 as well, with their net investment position turning negative by Tk261 crore.

Over the past eight years, foreign investors' net investment position was negative in seven of those years, with 2023 being the only year with a positive position of Tk64 crore.

Analysing the 2025 data, in five out of the 12 months, foreign investors' net investment position was positive, meaning that in those months they bought more shares than they liquidated through sales.

From May to August 2025, foreign investors were particularly active in buying shares, which pushed stocks higher and lifted the DSEX significantly.

Since then, until December, they continued to sell off shares to withdraw funds.

Lack of good stocks

Market experts and investors said that in the local capital, there is a lack of quality and good stocks.

They advised that the new government take initiatives to make the capital market vibrant and to list state-owned, highly profitable firms on the market.

Over the last year under the interim government, there was much discussion to enlist the state-owned firms on the stock market, but not a single firm got enlisted.

Ahsanur Rahman said, "There is a shortage of quality stocks in the market to attract foreign investors. Only a handful of stocks meet their return expectations.

"To revitalise the capital market and draw foreign participation, we must list more fundamentally strong companies."

Bangladesh's export momentum braces for fresh headwinds as uncertainty over the fate of the United States' short-term 15% tariff—whether it will be extended, increased or withdrawn after five months—has prompted American buyers to pause fresh commitments.

Beyond the freeze in new orders, the tariff—imposed by President Donald Trump after the US Supreme Court scrapped reciprocal tariffs—has triggered renegotiations on existing shipments.

Several US buyers are now demanding 2% price cuts on goods already in the pipeline, following the reduction of the tariff from 20% to 15%. Exporters say the move threatens to further erode already thin margins.

Buyers 'sitting on the fence'

At least eight Bangladeshi exporters told The Business Standard that US clients are "sitting on the fence" amid rapidly shifting trade policies. Seven reported a clear pause in decision-making, warning that order flows will not normalise without long-term policy clarity.

Shovon Islam, managing director of Sparrow Group, said buyers are in observation mode.

"They are deferring decisions until the final tariff structure becomes clear. Without certainty, long-term planning is impossible," he said.

SM Khaled, managing director of Snowtex Group, echoed the concern. "Our current order book is secured until June, but there is deep uncertainty about what happens after the five-month window," he said.

For Khaled, whose annual exports exceed $200 million, the US accounts for 20% of total trade. The present volatility, he added, has created a procurement stalemate, with buyers reluctant to commit beyond immediate needs.

Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association, described the situation as "unpredictable".

"Buyers are in the dark about where the tariff rates will finally land," he said. According to him, customers are placing only minimum-volume orders, a conservative approach that could severely hurt Bangladesh's garment exports if prolonged.

Policy volatility weighs on trade

Economists say the stop-start nature of US trade policy is amplifying risk.

Professor Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue, pointed to the legal oscillation shaping US tariff measures.

"The Supreme Court struck down the initial reciprocal tariffs, but the administration quickly introduced new ones under different statutes," he noted.

Because President Trump retains the authority to impose targeted or "surgical" tariffs on specific products or countries, Mustafizur warned that buyers are operating in a vacuum of uncertainty—booking orders only when unavoidable.

The US remains Bangladesh's largest apparel market, absorbing around 20% of total garment exports.

Data from the US-based Office of Textiles and Apparel (Otexa) show that US imports from Bangladesh reached $8.18 billion in 2025, accounting for 11% of total US global apparel sourcing.

In April 2025, the Trump administration initially set a 37% reciprocal tariff on Bangladesh, later negotiated down to 20% by August. Exporters now fear that a uniform 15% tariff applied equally to all countries would wipe out Bangladesh's relative advantage.

"The earlier tariff structure gave us a head start over China and India," Khaled said. "We captured orders shifting out of China because of higher costs there. With a flat tariff, that incentive disappears."

Otexa data show that between January and November 2025, Chinese garment exports to the US fell 34%, while Bangladesh's shipments grew 12%, alongside gains by several other major apparel exporters.

A level tariff regime, exporters argue, could reverse that trend by intensifying competition.

Buying houses squeezed as buyers seek discounts

The reduction from 20% to 15% has sparked immediate renegotiation attempts.

The Business Standard has seen an email from a mid-sized US buyer requesting a 2% downward adjustment on already-placed orders that have yet to clear customs.

"Please note due to recent tariff changes, Charles is requiring a 2% adjustment to the DDP cost for any goods that have not cleared customs," the message reads, instructing compliance by close of business Monday (US time).

A senior official at a Dhaka-based buying house, speaking anonymously, said the burden of adjustment would fall on intermediaries.

"We cannot push manufacturers for further discounts. We have to absorb the cuts ourselves," he said. For his firm, which sends 90% of its shipments to the US, the financial exposure is significant.

Other agents said the weekend timing of Washington's tariff shift left them scrambling as the US business week began, anticipating further renegotiation requests.

Mohammad Hatem warned that more buyers are likely to follow suit.

Yet exporters argue that the 5 percentage-point tariff reduction should not be captured entirely by retailers. They say manufacturers had already slashed prices during the higher-tariff period to keep orders flowing and deserve to share in the benefit.

Shovon Islam said his group plans to seek a 1% share of the savings from buyers.

Khaled, however, struck a more sceptical tone. "The buyers are pocketing the entire benefit of the lower rates without offering us any concessions," he said.

For now, Bangladesh's garment sector finds itself caught between policy unpredictability in Washington and pricing pressure from its largest export market—waiting for clarity that may not come soon.

Extortion surged by up to 50 percent following the fall of the Awami League government in the 2024 mass uprising, while corruption in public offices persisted throughout the 18-month tenure of the subsequent interim government, claimed the Dhaka Chamber of Commerce and Industry (DCCI).

Businesses were being forced to pay the same level of extortion as before the fall of the Awami League government, and in many cases up to 50 percent more, said DCCI President Taskeen Ahmed.

“If extortion is not stopped, we will have to shut down our businesses,” he told reporters at a press conference titled “Expectations from the New Government to Address the Current Economic Situation” held at the chamber’s auditorium in Motijheel yesterday.

Ahmed urged the new government to tackle both extortion and corruption. Otherwise, he said, the government will not be able to achieve its goal of creating 1 crore new jobs.

The DCCI president said corruption at public offices had not decreased during the interim administration. “Not for a single day has corruption in public offices declined,” he said.

When asked who was responsible for extortion, Ahmed pointed to individuals linked to the ruling party, the police, and revenue authorities.

He said those demanding money often claimed to represent the party in power. “They come and say they are from the government party. Whoever is in office, they say they are from that party, and we have to pay. They demand money for events, for neighbourhood events.”

Calling extortion and corruption “embedded in our blood,” he said, “If extortion does not stop, we will have to close our businesses and leave.”

The DCCI president said payments were demanded to enter factories, offices, and even on the streets. He urged the new government to send a strong message against such practices.

Reviving the economy, he said, would require energising the private sector. He outlined four priorities.

Those are improving law and order to stop extortion, eliminating corruption to restore investor confidence, allowing non-wilful loan defaulters to return to business with support if needed, and reducing bank lending rates to a reasonable level.

He said that the BNP government has assumed office amid deep structural weaknesses and growing economic pressures.

Private sector credit growth fell to 6.49 percent in fiscal year 2024-25, the lowest in 22 years, he said.

According to the president of the chamber, private investment declined to 22.48 percent of gross domestic product, while credit growth slipped further to 6.10 percent in December 2025. Export growth slowed to roughly 0.5 percent during the same month.

“These challenges are caused by structural weaknesses, including stress in the banking sector, rising import costs, energy shortages, and an unstable law and order situation,” he said.

Turning to monetary policy, the business leader argued that holding the policy rate at 10 percent had failed to tame inflation and instead driven lending rates above 16 percent.

“As a result, bank borrowing has become costly and unviable for businesses,” he said, urging authorities to cut the policy rate or provide subsidised credit lines for productive sectors.

He said non-performing loans (NPLs) have climbed to nearly Tk 6.5 lakh crore, and added that not all classified loans reflect wilful default.

“A large number of SMEs became classified due to working capital shortages caused by Covid-19, global conflicts, around 41 percent currency depreciation over two years, and high interest rates,” he said.

The trade leader called for a clear distinction between large wilful defaulters and firms affected by external shocks, and for targeted support to viable businesses.

He also suggested reducing dependence on banks by strengthening the capital market and listing large state-owned enterprises on the stock exchange.

Turning to energy and revenue issues, the DCCI president said the country faces a daily gas shortfall of around 30 percent, disrupting industrial production. Gas prices for new industries are set at Tk 40 per unit and Tk 42 for captive power plants, adding pressure on manufacturers.

Although installed generation capacity stands at 27,000 megawatts, actual output is much lower, leading to high-capacity payments. Ahmed called for a modern and integrated energy policy, noting that the last comprehensive update was in 1996.

He recommended differential pricing to encourage off-peak electricity use.

On tax policy, he welcomed the BNP government’s plan to raise the tax-to-GDP ratio to 8 percent but said full automation of the National Board of Revenue (NBR) is essential.

“The tax administration system is still partly manual, which leads to inefficiency and corruption. Automation is now necessary,” he said, adding that the turnover tax should fall from 1 percent to 0.6 percent, as businesses continue to recover from prolonged economic shocks.

Ahmed criticised a 41 percent average tariff increase by the Chittagong Port Authority, despite its surplus in fiscal year 2024.

With roughly 88 percent of trade passing through Chattogram Port, he said that the hike would raise costs and called for an immediate review. He also pressed for full implementation of the Bangladesh Single Window system to simplify trade procedures and cut time and costs.

The chamber’s president welcomed the decision to defer Bangladesh’s graduation from least developed country status by three years to allow better preparation. He also advised careful evaluation of a recent US trade agreement.

“If necessary, the agreement should be renegotiated to ensure a win-win outcome,” he said.

Dhaka Stocks has lost momentum after an initial post-election rally, as institutional investors adopted a cautious stance amid growing expectations of a leadership change at the capital market regulator – a long-standing demand of retail investors.

The newly formed government has already begun searching for a new Bangladesh Securities and Exchange Commission (BSEC) chairman, as the existing commission, formed during the interim administration and headed by Khondoker Rashed Maqsood, failed to restore investor confidence.

The regulator is also likely to undergo restructuring, according to officials familiar with discussions at the finance ministry, as policymakers seek broader structural reforms in a market that has underperformed relative to the country's economic growth, frustrating both local and foreign investors.

Finance ministry sources said several private-sector professionals, along with a professor from the University of Dhaka, have shown interest in leading the commission. However, capital market stakeholders said they favour market-oriented leadership from the private sector due to bitter past experience.

The benchmark DSEX index climbed 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 initial investor optimism over the new government.

The upward trend, however, proved short-lived. The market turned negative from the very next session amid uncertainty over whether the existing commission would remain in place.

Finance Minister Amir Khosru Mahmud Chowdhury also hinted at restructuring the regulator in a recent comment, saying the current upward trend may reflect expectations of a democratic government, but stressing that only sustainable, structural reforms can ensure long-term stability.

Speaking to journalists at his residence in Mehedibag, Chattogram, on Friday – during his first visit to the port city after taking the oath as a minister in the new government – Khosru said temporary gains driven by sentiment would not bring fundamental change to the capital market.

The minister said the government planned comprehensive reforms, including amendments to laws and regulatory frameworks, while strengthening the role of the BSEC. He stressed the need to improve regulatory effectiveness, enhance transparency and adopt a zero-tolerance stance against irregularities.

Khosru also said efforts would be made to bring fundamentally strong and profitable companies to the stock market and attract both domestic and foreign investment funds to improve liquidity and rebuild investor confidence.

Investors seek market-friendly leadership

A senior banker at a private commercial bank told The Business Standard that the sharp rise on the first trading day after the election reflected investor confidence, particularly as shares linked to BNP-aligned business groups recorded notable gains.

Wishing not to be named, the banker said investors are expecting a restructuring of the commission, as the current chairman is seen as not market-friendly and has been unpopular from the outset due to creating distance from stakeholders.

"The government should appoint someone market-oriented to lead the regulatory body, either from market participants or from academia, like a finance professor," the official said.

Former banker Khondoker Rashed Maqsood assumed office as BSEC chairman following the regime change on 5 August 2024. During his roughly one-and-a-half-year tenure, he faced repeated protests from investors who accused the regulator of failing to revive market performance.

Stakeholders said trading activity weakened as key market players distanced themselves from the regulator, resulting in persistently low turnover. Moreover, no new initial public offerings (IPOs) entered the market under his leadership, further straining merchant banks.

Maqsood's commission also imposed what many described as unrealistic fines totalling nearly Tk1,000 crore on various companies and individuals over past corruption and market manipulation, creating negative sentiment among investors.

Longstanding governance concerns

While Asian frontier markets have grown rapidly, Bangladesh has lagged behind over the past 15 years under the leadership of former BSEC chairmen M Khairul Hossain and Shibli Rubayat Ul Islam, who critics say failed to establish proper governance in the market.

Both were finance professors at Dhaka University and faced allegations of corruption and collusion in market manipulation with certain stakeholders.

Shibli Rubayat, who resigned in August last year following the regime change, was arrested in February in a corruption case filed by the Anti-Corruption Commission (ACC).

He was also permanently barred by the BSEC from all capital market activities over his involvement in a share price manipulation scheme linked to Padma Printers and Colour.

Khairul Hossain, who led the regulator from 2011 to early 2020, was criticised for approving numerous financially weak companies for IPOs, often at inflated prices, which analysts say eroded investor confidence despite strong macroeconomic growth at the time.

His successor, Shibli, who took charge in 2020, was accused of shifting focus away from strengthening the primary market and instead fostering alleged collusive ties with certain market players and insider traders, prioritising short-term gains in the secondary market over long-term stability.

Following what stakeholders describe as unsuccessful leadership by academic appointees, market participants are urging the government to choose a chairman with both technical market knowledge and public policy understanding.

A merchant banker, speaking on condition of anonymity, said investor distrust in the existing commission was evident in market performance during the interim government period.

He added that while university professors may have theoretical expertise, they often lack the practical experience of private sector players. He suggested the new commission should include a mix of academics and private sector professionals to help restore investor confidence.

The US Customs and Border Protection agency said it will halt collections of tariffs imposed under the International Emergency Economic Powers Act at 12:01 am EST (0501 GMT) on Tuesday, more than three days after the US Supreme Court declared the duties illegal.

CBP said in a message to shippers on its Cargo Systems Messaging Service that it will de-activate all tariff codes associated with President Donald Trump's prior IEEPA-related orders as of Tuesday.

The IEEPA tariff collection halt coincides with Trump's imposition of a new, 15% global tariff under a different legal authority to replace the ones struck down by the Supreme Court on Friday.

China is making a "full assessment" of the US Supreme Court's tariff ruling and urged Washington to lift "relevant unilateral tariff measures" on its trading partners, the Chinese commerce ministry said in a statement on Monday.

The comments came days after the highest US court dealt President Donald Trump a stinging defeat by striking down many of the tariffs he has used in a global trade war, including some against rival China.

Within hours of the ruling, Trump said he would impose a new 10% duty on US imports from all countries starting on Tuesday, which he raised to 15% on Saturday.

"US unilateral tariffs ... violate international trade rules and US domestic law, and are not in the interests of any party," the Chinese ministry added.

The ministry said it noticed the US planned to maintain tariffs on trading partners through alternative means including trade investigations.

"China will continue to pay close attention to this and firmly safeguard its interests," the ministry said.

Trump will travel to China from 31 March to 2 April for a highly anticipated meeting between the leaders of the world's two biggest economies.

The US Customs and Border Protection agency said it will halt collections of tariffs imposed under the International Emergency Economic Powers Act at 12:01 a.m. EST (0501 GMT) on Tuesday, more than three days after the US Supreme Court declared the duties illegal.

The agency said in a message to shippers on its Cargo Systems Messaging Service (CSMS) that it will de-activate all tariff codes associated with President Donald Trump’s prior IEEPA-related orders as of Tuesday.

The IEEPA tariff collection halt coincides with Trump’s imposition of a new, 15 percent global tariff under a different legal authority to replace the ones struck down by the Supreme Court on Friday.

CBP gave no reason why it was continuing to collect the tariffs at ports of entry days after the Supreme Court’s ruling, and its message offered no information about possible refunds for importers.

The message noted that the collection halt does not affect any other tariffs imposed by Trump, including those under the Section 232 national security statute and the Section 301 unfair trade practices statute.

“CBP will provide additional guidance to the trade community through CSMS messages as appropriate,” the agency said.

Reuters reported on Friday that the Supreme Court decision made more than $175 billion in US Treasury revenue generated by the IEEPA tariffs subject to potential refunds, based on an estimate by Penn-Wharton Budget Model economists. Their estimate from a ground-up forecasting model showed that IEEPA-based tariffs were generating more than $500 million per day in gross revenue.

Goldman Sachs raised its Brent and West Texas Intermediate crude forecasts for the fourth quarter of 2026 by $6 to $60 and $56 respectively, citing lower OECD stocks, even as it continued to assume no Iran-related supply disruption and maintained its view of a surplus this year.

For the year, it now expects Brent to average $64 a barrel, up from $56 previously, and WTI to average $60, up from $52.

Oil prices fell about 1 percent on Monday as the US and Iran prepared for a third round of nuclear talks, easing fears of an escalating conflict.

Brent crude futures were trading around $71 a barrel at 0641 GMT, while US WTI crude futures were at $65.75 a barrel.

In a note dated Sunday, Goldman said its $60 Brent price forecast reflected a gradual fading of a $6 risk premium estimate assuming that geopolitical tensions ease and a $5 decline in the fair value price on rising stocks in the Organisation for Economic Co-operation and Development (OECD).

The bank maintained its 2026 surplus forecast of 2.3 million barrels per day (bpd), assuming no major supply disruption and no Russia-Ukraine peace.

The bank said its 2026 surplus reflects offsetting 0.2 million bpd downgrades to supply and demand on slightly softer growth in Asia.

The bank downgraded its 2026 supply outlook for Kazakhstan, Venezuela, Iran, and Iraq due to realized production misses, while it upgraded supply expectations for the Americas and in core Opec countries with spare capacity.

The bank said it expects Opec+ to begin gradually increasing production in the second quarter of 2026, given that OECD inventories have not built up.

Goldman, however, expects downside risks of $5 for Brent and $8 for WTI for the fourth quarter of 2026 if potential sanctions relief for Iran or Russia accelerates landed stock builds and unlocks higher supply in the longer term.

It expects Brent and WTI to average $65 and $61, respectively, in 2027 and to rise to $70 and $66 by December 2027 on the back of solid demand and slowing supply growth.

Gold climbed to a three-week high on Monday as uncertainty stoked by the US Supreme Court's decision to strike down a vast swathe of President Donald Trump's tariffs pressured the dollar and pushed investors to the safety of bullion.

Spot gold climbed 1.1 percent to $5,158.29 per ounce by 0558 GMT, having earlier hit its highest since January 30. US gold futures for April delivery were up 2 percent at $5,180.40.

"The court's tariff ruling has, aside from earning the ire of the US president, added another layer of uncertainty to global markets, with traders again turning to gold as a defensive play," said Tim Waterer, chief market analyst at KCM Trade.

The US Supreme Court struck down Trump's sweeping tariffs that he pursued under a law meant for use in national emergencies, handing the Republican president a stinging defeat in a landmark ruling on Friday with major implications for the global economy.

After the court ruling, Trump said he would raise a temporary tariff from 10 percent to 15 percent on US imports from all countries.

"Whether gold can claw its way back above $5,400 in the near-term may rest on how long tariff uncertainty lingers and whether the US engages in military action against Iran," Waterer said.

Iran has indicated it is prepared to make concessions on its nuclear programme in talks with the US in return for the lifting of sanctions and recognition of its right to enrich uranium, as it seeks to avert a US attack.

Meanwhile, data on Friday showed that underlying US inflation increased more than expected in December, and signs are pointing to a further acceleration in January, which would strengthen expectations that the Federal Reserve won't cut interest rates before June.