Bangladesh recorded 6,729 road accidents in 2025, resulting in 9,111 deaths and 14,812 injuries, highlighting road safety as a pressing national concern.Third-party motor insurance, intended to provide financial coverage for those affected by such incidents, remains underutilised despite its potential as a social protection tool.

The Insurance Development and Regulatory Authority (IDRA) relaunched third-party motor insurance in August 2025 under the name "Motor Liability Insurance" on a pilot basis. Non-life insurers are allowed to sell the policy for one year and report statistics to IDRA after the period ends. Yet, six months into the pilot, uptake remains minimal.

Experts cite two main reasons: the policy is not mandatory, and premiums are relatively high.

How Motor Liability Insurance Works

The policy covers financial liability if a third party suffers death, injury, or property damage caused by an insured vehicle. Maximum compensation is Tk2,00,000 per person in the event of death or permanent total disability. Partial permanent disability is compensated as per a prescribed schedule, while serious injuries with recovery potential receive up to Tk20,000. Vehicle or property damage is covered up to Tk60,000, with legal, arbitration, and related expenses up to Tk10,000.

Previously, third-party insurance was abolished in December 2020, following the Road Transport Act 2018, which removed the mandatory requirement.

Customer reluctance

A visit to Dhaka's IDRA office revealed widespread unawareness among motorcyclists about the insurance. Those familiar with it are reluctant to purchase it since it is optional.

Golam Rasul, a private-sector employee who occasionally drives passengers via ride-sharing platforms, told The Business Standard, "I would take it if the government made it mandatory. Right now, I don't see the need to pay such high premiums. Careful driving should be enough to avoid accidents."

Insurer frustration

According to United Insurance Company Limited, around Tk48 crore in premiums were collected between January and September 2025, but none came from motor insurance.

Khawja Manzer Nadeem, Managing Director, told TBS, "No one is purchasing motor insurance because it is not legally required. Under the pilot, we haven't even issued a single policy yet. Unlike in other countries, there's no system to quickly determine compensation, so people don't see practical benefits."

Brig. Gen. (Retd.) Md. Shafique Shamim, MD and CEO of Sena Insurance Company, added, "Limited awareness and interest exist. The policy won't work unless it's mandatory. Premiums should also be reconsidered."

An anonymous insurance official noted that most companies are not actively marketing the policy, leaving sales stagnant.

IDRA's position

IDRA spokesperson Saifunnahar Sumi told TBS, "Motor insurance should be mandatory. We've discussed this with BRTA, transport owner associations, and other stakeholders. However, trust issues in the insurance sector mean agreement has not been reached yet. We are continuing to work on this."

Premiums and coverage

Under the new policy, a 150cc motorcycle requires a total premium of Tk1,006, a 350cc three-wheeler with four seats, Tk1,696, a private car (1,300cc, five seats including driver), Tk2,070, and a two-seat three-ton truck, Tk3,651.

In case of accidents, compensation follows IDRA circulars: Tk2,00,000 for death or permanent total disability, Tk20,000 for serious injuries, Tk60,000 for property damage, and Tk10,000 for legal or arbitration costs.

Practical challenges

Implementation of third-party motor insurance in Bangladesh faces several practical challenges. Many vehicle owners remain unaware of the policy or purchase it only for formality, without fully understanding its coverage or benefits.

Even when an accident occurs, claimants often have to navigate lengthy legal procedures to receive compensation, making the process cumbersome and time-consuming.

Experts also note that the current compensation limits, such as Tk2,00,000 for death or permanent total disability, are insufficient to cover the needs of affected families in today's economic context.

In addition, disputes frequently arise between insurers and policyholders, with claims sometimes denied due to unauthorised drivers, exceeding vehicle usage limits, or delayed accident notifications. Such disputes are generally resolved through civil courts or arbitration, a process that, while considered a risk management tool by insurers, can further delay compensation and add to the financial strain on victims.

Future steps

Experts suggest updating compensation limits, digitising claims settlement, increasing public awareness, and coordinating among government, regulators, and insurers. Improved road safety would also reduce accidents and ease the burden on third-party insurance.

Third-party motor insurance is not just a legal requirement; it is a critical social safety net. Given the scale of road accidents in Bangladesh, the system must become stronger, more transparent, and more effective.

A combined effort from the law, the insurance sector, and the public can transform motor liability insurance into a robust protection mechanism.

PRAN-RFL Group, a leading conglomerate in Bangladesh, is set to invest Tk 500 crore over the next three years to manufacture and market motorcycles and electric scooters.

The group aims to produce its own eco-friendly electric scooter brand, RYDO, while also taking over the manufacturing and distribution of the renowned Indian brand TVS in the local market, according to a press release.

The move is expected to create direct and indirect employment for 5,000 people.

A motorcycle assembly and manufacturing plant will soon be established at the Habiganj Industrial Park.

“Today, motorcycles and bicycles are not just modes of transportation for young people; they have become lifestyle products,” said RN Paul, managing director of RFL Group.

Under a recently signed memorandum of understanding (MoU), PRAN-RFL will invest Tk 400 crore in phases to produce “Made in Bangladesh” TVS motorcycles.

Mahmudur Rahman, chief operating officer of RFL’s bike business, said that marketing of TVS motorcycles will commence by the end of February, with full-scale production at the Habiganj factory starting within this year. The initial target is to produce 5,000 units a month.

RFL has already begun assembling RYDO scooters, which are electric vehicles, with an initial investment of Tk 50 crore.

“By 2027, we aim to offer high-quality RYDO electric scooters at around Tk 50,000,” Paul said, adding that the group plans to manufacture almost all components locally within the next year to ensure affordability.

To address charging infrastructure challenges, the group is installing fast-charging stations at its retail outlets in partnership with Glafit Bangladesh Limited.

The country’s motorcycle market is currently valued at Tk 7,000-Tk 8,000 crore, with annual growth of 16-17 percent. Industry experts expect national production capacity to reach one million units by 2027.

The Dhaka Stock Exchange (DSE) has reinstated two listed companies from the Z category to their respective categories after they completed the disbursement of declared dividends for the last fiscal year.

According to separate disclosures issued yesterday, textile manufacturer VFS Thread Dyeing Ltd has been upgraded to the B category, while pharmaceutical company Techno Drugs Ltd has been restored to the A category.

Both companies were earlier downgraded to the Z category for failing to disburse declared dividends within the stipulated timeframe.

Under DSE listing rules, listed companies are required to disburse dividends within 30 days of shareholder approval. In a directive issued in May 2024, the Bangladesh Securities and Exchange Commission (BSEC) mandated that companies failing to pay at least 80% of the approved dividend within the specified time would be downgraded to the Z category.

VFS thread dyeing

VFS Thread Dyeing, which was listed on the bourse in 2018, was downgraded to the Z category on 24 September 2024 after failing to disburse its declared dividend for FY23 within the required timeframe.

The company declared no dividend for FY24. However, for FY25, its board announced a 0.25% cash dividend for general shareholders, excluding sponsors and directors. As per the declaration, general shareholders were entitled to receive Tk18.27 lakh as dividend.

Following approval at its annual general meeting (AGM) held on 30 December, the company completed the dividend disbursement. After receiving the dividend compliance report, the DSE upgraded VFS Thread Dyeing to the B category from the Z category, effective 15 February.

Techno drugs

Techno Drugs, which was listed in 2024, was downgraded to the Z category on 3 February for failing to disburse at least 80% of its approved dividend within the mandated timeframe.

For FY25, the company declared a 10% cash dividend for general shareholders, excluding sponsors and directors, amounting to Tk4.92 crore.

Although shareholders approved the dividend at the AGM held on 24 December, the company failed to complete the disbursement within one month.

Subsequently, after submitting the dividend compliance report to the DSE, the bourse reinstated Techno Drugs shares to the A category.

Gold prices rose more than 2 percent on Friday and were headed for a weekly gain as weaker-than-expected US inflation data reignited hopes for Federal Reserve rate cuts this year, offsetting concerns from stronger-than-expected jobs data earlier in the week.

Spot gold was up 2.1 percent at $5,022.06 per ounce as of 01:30 p.m. ET (1830 GMT), and up 1.2 percent so far this week. Bullion fell about 3 percent on Thursday, hitting its lowest in nearly a week.

US gold futures for April delivery settled about 2 percent higher at $5,046.30 per ounce.

“Gold, and particularly silver, is enjoying a relief rally after a mild January CPI reading eased nerves stoked by Wednesday’s strong employment report,” said Tai Wong, an independent metals trader.

CPI COMES IN LOWER THAN EXPECTED

Spot silver climbed 3.4 percent to $77.70 per ounce, snapping back from an 11 percent decline in the previous session. It was on track for a weekly loss of 0.3 percent. The US Consumer Price Index rose 0.2 percent in January, below economists’ expectations of a 0.3 percent increase, following an unrevised 0.3 percent gain in December, the Labor Department said.

Market participants currently anticipate a total of 63 basis points in rate cuts this year, with the first expected in July, according to data compiled by LSEG.

Non-yielding bullion tends to do well in low-interest-rate environments. Meanwhile, data on Wednesday showed the United States added 130,000 jobs in January, compared with analysts’ estimates of 70,000.

China’s gold demand stayed strong ahead of the Lunar New Year, while in India, the market flipped to a discount.

ANZ analysts raised their second-quarter gold forecast to $5,800/oz from $5,400, citing its appeal as an insurance asset, while noting that silver, though still supported by strong investment demand, may see its recent outperformance fade as industrial buyers balk at higher prices.

National Feed Mill Limited has recommended a marginal cash dividend of 0.10%—equivalent to 1 paisa per share—for the fiscal year ended 30 June 2025, marking its first dividend declaration in two years.

The decision comes after the company failed to recommend any dividend in the previous two fiscal years, a lapse that resulted in its classification under the Z-category, commonly known as junk stocks.

According to a price-sensitive statement filed with the Dhaka Stock Exchange (DSE) today (10 February), the cash dividend will be payable only to general shareholders, excluding sponsors and directors.

The date, time and venue of the annual general meeting, along with the record date, will be announced later.

The company reported earnings per share of Tk0.03 for FY25, a notable improvement from a loss per share of Tk0.71 in the previous year. Its net asset value per share stood at Tk11.09 at the end of June 2025, slightly higher than Tk11.07 a year earlier, while net operating cash flow per share remained unchanged at Tk0.12.

The firm disclosed that its sponsors and directors hold 28.38 million shares out of a total of 93.36 million shares. As a result, the total cash dividend payable to general shareholders will amount to Tk6.49 lakh.

Despite the dividend announcement, investor sentiment remained cautious, with National Feed Mill's share price falling by 5.41% today to close at Tk14 at the DSE.

The company was listed on the stock exchanges in 2015 after raising Tk18 crore through an initial public offering, issuing 1.8 crore shares with a face value of Tk10 each. The IPO proceeds were primarily allocated to repaying loans and supporting business expansion.

According to the fund utilisation plan, 40% of the proceeds were allocated to repaying loans, 45% to expansion, 5% to working capital, and the rest to IPO-related expenses. The issue was managed by ICB Capital and PLFS Investments.

However, concerns over the company's financial health persists. In its audit opinion on the FY24 financial statements, auditor Islam Quazi Shafique & Co flagged discrepancies in reported long-term loans. While the company disclosed Tk63.51 crore in long-term borrowings, the auditor was able to verify only Tk61.55 crore, citing non-responses from banks to confirmation requests.

Meanwhile, sources said Bank Asia attempted to auction National Feed Mill's assets in June 2025 to recover defaulted loans amounting to Tk47 crore, but the effort failed. The development underscores the company's persistent financial strain despite its latest dividend declaration.

The World Bank (WB) has approved $370 million in financing to improve sanitation and solid waste management services to reduce water pollution and restore rivers and canals in and around Dhaka.

The Metro Dhaka Water Security and Resilience Program aims to strengthen the capacity of local and national institutions to curb pollution in greater Dhaka, a region that generates one-third of the country’s GDP and half of its formal employment, according to a press release.

The program introduces a results-based system to help city corporations and the Dhaka Water Supply and Sewerage Authority (Wasa) deliver measurable improvements.

It is expected to provide safely managed sanitation services to 550,000 people and improve solid waste management to 500,000 people, focusing on communities most affected by service gaps.

“Waterbodies are the lifeline for millions of people in greater Dhaka. But rapid, unplanned urbanisation and industrial growth have outpaced the city's capacity to manage wastewater and pollution,” said Jean Pesme, World Bank division director for Bangladesh and Bhutan.

Currently, only about 20 percent of Dhaka residents have piped sewer connections, while over 80 percent of untreated wastewater is discharged into waterways. More than half of the city’s canals have disappeared or remain clogged.

The industrial sector also contributes significantly to the crisis. More than 7,000 factories release an estimated 2,400 million litres of untreated wastewater daily.

The program will mobilise private sector participation to scale up industrial effluent treatment and water reuse.

Harsh Goyal, WB senior water supply and sanitation specialist, said the phase will prioritise a comprehensive water quality index and digital real-time monitoring for four major Dhaka rivers.

The first phase will cover selected areas in Dhaka and Narayanganj, focusing on upgrading recycling systems and enforcing pollution-control measures to stop solid waste dumping and direct sewage discharge.

Bangladesh Bank (BB) has fixed office hours from 9:30am to 4pm for all scheduled banks in the country during the month of Ramadan.

However, people will be allowed to make banking transactions from 9:30am to 2:30pm, according to a circular issued by the central bank today (10 February).

For bank staff, there will be a break of 15 minutes from 1:15pm to 1:30pm for Zuhr prayers.

The office and banking hours will return to the earlier time after Ramadan, said the BB's notice.

Experts have warned that Bangladesh's newly signed reciprocal tariff agreement with the United States sharply limits its ability to enter trade deals with countries such as China or Russia.

They said the pact includes a clause barring Bangladesh from concluding agreements with any "non-market economy", with violations risking the reimposition of a 37% reciprocal tariff first imposed by Washington in April last year.

The agreement states: "If Bangladesh enters into a new bilateral free trade agreement or preferential economic agreement with a non-market country that undermines this Agreement, the United States may, if consultations fail, terminate this Agreement and reimpose the applicable reciprocal tariff rate."

The US-classified non-market economies include China, Russia, Vietnam, Belarus, Tajikistan, Uzbekistan, Moldova and Azerbaijan.

Bangladesh has to raise US defence imports under trade deal. Find out what else the agreement says

Trade analysts said the clause could also block Bangladesh's entry into the world's largest trade bloc, the Regional Comprehensive Economic Partnership, as China is a member and accession would require separate agreements with all members.

They added that Bangladesh's current trajectory of engagement with China may no longer be viable.

Former WTO Cell director Md Hafizur Rahman and former Bangladesh Trade and Tariff Commission member Mostafa Abid Khan shared these views with TBS while analysing the agreement.

Commerce Adviser Sk Bashir Uddin and US Trade Representative Jamieson Greer signed the deal in Washington on 9 February. Under the pact, the reciprocal tariff on Bangladeshi exports has been lowered to 19%, while garments made from US cotton and synthetic fibres will qualify for zero reciprocal duty.

However, much of the 32-page text released by the Office of the US Trade Representative sets out obligations Bangladesh must meet to access limited tariff relief, they said.

A close reading shows that while most US tariffs remain intact, Bangladesh has agreed to eliminate or sharply reduce customs duties on most US product categories. Some goods will receive duty-free access immediately, while others will see tariffs halved and fully phased out within five to ten years.

"….customs duties on originating goods provided for in the items in staging category EIF shall be eliminated entirely, and these goods shall be duty-free on the date of entry into force of this Agreement…customs duties on originating goods provided for in the items in staging category A shall remain zero," reads the document, without specifying items under those categories.

The agreement is expected to take effect 60 days after both sides complete their legal procedures.

Potential impact on investment

The agreement allows the US to take action against companies operating in Bangladesh if they export goods to the US at below-market prices. It also permits action if a foreign firm exports to third countries at below-market rates and a US company claims injury as a result.

Hafizur said this could deter investors, particularly from China and other countries, who view Bangladesh as a low-cost production base for exports to the US.

Asked how "market rate" would be defined, Abid said the US would determine it, recalling that past anti-dumping cases used production costs plus a 20% profit margin.

Revenue collection, intellectual property

The agreement is expected to boost Bangladesh's garment exports by granting zero reciprocal tariffs on apparel made from US cotton. India and Pakistan, which rely on domestic cotton, will not receive similar benefits, potentially giving Bangladesh an edge.

The US will offer tariff concessions on 6,710 products, while Bangladesh will benefit on 1,638 items.

Hafizur said the US has cut duties on its exports by 50%, leaving only VAT and advance income tax, which could reduce Bangladesh's revenue and weaken protection for domestic industries.

On intellectual property, Bangladesh must accede to 13 treaties outside the WTO framework, a process both experts said would pose significant legal and economic challenges.

Reciprocal tariff deal with US allows exit with notice: Commerce adviser

Regulatory and labour obligations

Bangladesh has agreed to remove non-tariff barriers, licensing requirements and restrictions on US products, accept US certifications unilaterally, and comply with safety and emissions standards set by agencies such as the FDA.

It must also ease barriers for reinsurers, expand freedom of association for workers, resolve criminal cases against factory workers, establish a minimum wage review mechanism, and strengthen IP enforcement.

Bangladesh will also have to ratify or accede to a dozen global conventions, including the Berne Convention, within three to five years.

Commercial purchases for Bangladesh

Commercial purchase deals under the agreement include Bangladesh's acquisition of 14 Boeing aircraft, with an option to buy more, a long-term offtake of US liquefied natural gas valued at an estimated $15 billion over 15 years, procurement of at least 700,000 tonnes of wheat per year for five years, 2.6 million tonnes or $1.25 billion worth of soy and soy products over one year, and cotton worth $3.5 billion.

Regarding the Boeing aircraft, Commerce Adviser Sk Bashir Uddin told journalists that Bangladesh would spend between TK30,000 and 35,000 crore to purchase them, payable over 20 years, averaging roughly Tk1,500 crore per year.

Bangladesh to sign reciprocal tariff trade deal with US today

Security clauses

While protecting US business, Bangladesh must take precautions in trades with countries that face US economic or national security concerns.

The agreement states: "Bangladesh shall adopt or maintain a complementary restrictive measure, in accordance with its laws and regulations, in support of the US measure" if the US imposes a "border measure or other trade action" to protect its economic or national security.

The deal restricts Bangladesh's defence purchases. "Bangladesh shall endeavour to increase purchases of US military equipment and limit military equipment purchases from certain countries."

It also dictates which countries Bangladesh should do business with: "Bangladesh shall adopt measures to encourage shipbuilding and shipping by market economy countries."

Facilitating US investment

The deal also facilitates US direct investment in exploration and mining of critical minerals and energy resources in Bangladesh, as well as in power generation, telecommunications, transportation, and infrastructure, on terms no less favourable than those offered to local investors.

The agreement requires Bangladesh to stop subsidising state-owned enterprises producing commercial goods that may discriminate against US goods and services.

Bangladesh agrees to do all these to get some tariff relief in exchange for helping the US minimize its trade gap – roughly $6.1 billion in 2024 – with Bangladesh.

Limited tariff benefits

In return, the US has pledged to create a mechanism allowing a limited volume of Bangladeshi apparel and textile exports to enter duty-free, linked to the use of US cotton and man-made fibres.

Other Bangladeshi goods will face an additional ad valorem duty capped at 19%.

The White House said the agreement builds on the 2013 Trade and Investment Cooperation Forum Agreement and would provide "unprecedented access" to each other's markets.

USTR Jamieson Greer said the deal marked "a meaningful step forward" in opening markets and creating new opportunities for American exporters.

PRAN-RFL Group has entered Bangladesh's motorcycle market with a plan to invest around Tk500 crore over the next three years, aiming to set up a manufacturing and assembly facility at the Habiganj Industrial Park and create direct and indirect employment for about 5,000 people.

The country's leading conglomerate will operate in both conventional motorcycles and electric two-wheelers, combining the manufacturing and marketing of its own electric scooter brand, RYDO, with the local production and distribution of motorcycles under the popular TVS brand.

According to company officials, work on establishing the Habiganj plant will begin soon. Alongside manufacturing, PRAN-RFL will invest in building a modern nationwide marketing network and strengthening after-sales services, a segment industry insiders say is critical to sustaining growth in Bangladesh's competitive two-wheeler market.

PRAN-RFL has already started manufacturing and marketing RYDO electric scooters at its Habiganj facility, employing around 1,000 people directly. Once the factory reaches full capacity, another 1,000 direct jobs will be created, while an estimated 3,000 more positions are expected through suppliers, distributors and service centres.

RN Paul, managing director of PRAN-RFL Group, said the decision reflects changing consumer preferences, particularly among young people. "Motorcycles and bicycles are no longer just modes of transportation; they have become lifestyle products," he said, noting that PRAN-RFL's long experience in producing and marketing affordable bicycles provided a foundation for entering the motorcycle and electric scooter segments.

Taking over TVS operations

As part of its expansion, PRAN-RFL has taken over TVS motorcycles in Bangladesh under a recently signed memorandum of understanding between the two companies.

Paul said TVS motorcycles would soon be produced locally as "Made in Bangladesh" products at the Habiganj factory.

An investment of around Tk400 crore will be made in phases for TVS production, with technical support from the Indian manufacturer.

"Through new models, improved braking systems and better after-sales service, we aim to bring this brand back to the top," Paul said.

Mahmudur Rahman, chief operating officer of RFL's bike business, said marketing of TVS motorcycles through PRAN-RFL's network will begin by the end of February, while full-scale production at Habiganj is expected to start within this year. Initially, the factory will produce about 5,000 units per month, with plans to double capacity through expansion.

TVS Motor Company, one of India's leading motorcycle manufacturers, has had a visible presence in Bangladesh's two-wheeler market for years, with models such as the TVS Star City Plus, TVS Apache series and commuter bikes being popular among urban and rural riders alike.

Until recently, the brand's motorcycles were imported and distributed locally by Rangs Motors. However, fragmented distribution and inconsistent after-sales support have limited TVS's competitive edge against rivals with deeper retail networks. With PRAN-RFL now taking over marketing and future local production, the brand aims to strengthen its foothold in Bangladesh through expanded distribution.

Strong push for electric scooters

PRAN-RFL is placing particular emphasis on electric scooters, viewing them as vehicles of the future amid rising fuel costs and environmental concerns. Paul said electric scooters are already widely used in India, China and Vietnam, and Bangladesh has strong demand potential, although high prices have constrained growth.

By 2027, the company aims to offer RYDO electric scooters at around Tk50,000, targeting mass-market adoption. Production and assembly of RYDO scooters have already started at Habiganj with an initial investment of Tk50 crore. Currently, about 20% of components are manufactured locally, with plans to increase localisation to nearly 100% within a year through an additional Tk50 crore investment.

Mahmudur said the factory is now producing around 500 RYDO scooters per month, which will rise to 3,000 units once operations are fully scaled up.

Charging infrastructure remains a key challenge for electric two-wheelers. Addressing this, Paul said PRAN-RFL is installing fast-charging stations at its retail outlets in partnership with Japan-backed startup Glafit Bangladesh Limited, an initiative expected to support wider EV adoption.

Backward linkage push, steady growth strategy

Industry insiders estimate Bangladesh's motorcycle market at Tk7,000-8,000 crore, growing at 16-17% annually. Nearly 99% of motorcycles sold in the country are locally manufactured or assembled, driven by favourable government policies and rising urban and semi-urban mobility needs.

Motorcycle sales have nearly doubled over the past decade, rising from fewer than 2,00,000 units in 2015 to around 4,00,000 units annually. By 2027, industry capacity is expected to reach one million units.

PRAN-RFL also sees strong potential in backward linkage industries. Paul said components such as drive chains, seats, stands, wheels and batteries can be manufactured locally, leveraging RFL's experience in plastics, metal and consumer goods manufacturing.

Company officials said the first year will focus on stable growth, expanding dealer and service networks, and ensuring strong customer support, with a longer-term goal of emerging as a market leader in both conventional and electric two-wheelers.

Commerce Adviser Sheikh Bashir Uddin has said that Bangladesh can withdraw from the reciprocal tariff agreement signed with the United States by issuing a formal notice, should the next government choose to do so, as the deal includes an exit clause.

He disclosed the information at a press conference held at the Ministry of Commerce in the Secretariat today (10 February), a day after Bangladesh and the US signed the reciprocal tariff agreement.

The commerce adviser said the agreement contains a provision allowing either country to withdraw, if necessary, by serving an appropriate notice. "We were mindful of the next government while negotiating the deal. If a future government feels that the agreement is not suitable for any reason, this clause allows them to exit," he said.

Commerce Secretary Mahbubur Rahman said the agreement allows withdrawal with two months' notice, adding that the deal will come into force once both countries issue formal notifications.

On 2 April 2025, the United States imposed reciprocal tariffs on several countries at varying rates to reduce its trade deficit.

Initially, the Trump administration imposed a 37% reciprocal tariff on Bangladeshi products. After negotiations, the rate was reduced to 20% in August. Following nine months of talks, the two countries signed the agreement on 9 February, further reducing the reciprocal tariff to 19%.

Under the agreement, Bangladesh's main export item -- ready-made garments -- will enjoy zero reciprocal tariff if produced using US-origin cotton and man-made fibres.

At the press conference, the commerce adviser said Bangladesh exports goods worth around $8 billion to the US, and has a trade surplus of $6 billion. Overall, he said, the 19% reciprocal tariff will apply to only around 10% of Bangladesh's exports.

Noting that the US economy is worth $36 trillion, the adviser said its import demand is enormous, creating vast export opportunities for Bangladesh.

He also noted that Bangladesh imports agricultural products such as wheat, maize, and oilseeds worth around $15 billion annually, adding that the notion that Bangladesh is fully self-sufficient in food is incorrect.

Commerce Secretary Mahbubur Rahman said the US has introduced a tariff benefit called "Potential Tariff Adjustment for Partner Countries," which will take effect on the day the agreement comes into force. This benefit will apply to partner countries that have signed reciprocal tariff agreements with the US.

Under the scheme, the US has granted duty-free benefits on more than 2,500 items. Among products Bangladesh produces, pharmaceuticals top the list, meaning all medicines and pharmaceutical raw materials will enjoy duty-free access. Other eligible items include certain plastic products, aircraft parts, plywood, particle boards, agricultural products, and fishery items.

The commerce adviser said the agreement will significantly benefit the textile, spinning, and weaving sectors by enabling double-stage transformation. He added that while Bangladesh had pursued a free trade agreement (FTA) with the US, Washington was not interested in signing one.

The commerce secretary said the agreement initially did not include enforcement or exit clauses, but Bangladesh successfully negotiated their inclusion.

Responding to a question on whether the agreement includes provisions requiring Bangladesh to reduce imports from third countries or meet additional US demands, the commerce adviser said no such conditions were included.

The commerce secretary added that while such issues were initially raised, Bangladesh refused to accept them. "We made it clear during negotiations that we could not include any provisions that would create sensitivity or discrimination against other countries," he said.

Before the July uprising, the main index of the Dhaka Stock Exchange (DSE) stood at 5,223 points, with a daily turnover of Tk208 crore. Investor confidence plummeted, and many withdrew from the market.

During this uncertain period, the responsibility of restoring stability fell on Khondkar Rashed Maksud, chairman of the Bangladesh Securities and Exchange Commission (BSEC).

Investors placed their trust in the commission, expecting substantial reforms to stabilise the market.

After the uprising, Maksud's commission saw the crisis as an opportunity to restore market discipline, increase transparency, and rebuild investor confidence. As part of active measures, a five-member special investigation committee was formed to probe irregularities and corruption in 12 listed companies, most of which had occurred during the previous government's tenure.

Based on the committee's findings, several companies, including Beximco, faced fines. However, these measures had a mixed impact, causing investor apprehension. Public protests demanding the chairman's resignation were held at Motijheel as confidence in the commission wavered.

During this period, the commission also withdrew floor prices set by the previous commission, though two companies retained their floor prices. Structurally, the BSEC introduced amendments to three key laws to strengthen the market framework. The Public Issue Rules amendments made the IPO process for new companies more transparent and verifiable.

Margin Rules amendments controlled investor leverage to reduce excessive trading risks. Mutual Fund Rules amendments tightened mutual fund management regulations to safeguard investor interests. These reforms were seen as crucial steps toward transparency, risk management, and rebuilding investor confidence.

However, the commission's refusal to approve long-term fund-raising led to the cancellation or withdrawal of 18 applications totaling nearly Tk1,000 crore. This hindered entrepreneurs from implementing business plans and delayed multiple projects. Additionally, 21 officials were temporarily suspended for breaching market discipline, creating anxiety within the regulatory workforce.

The interim government's chief adviser issued five directives to restore market stability. These included reducing government-owned multinational company shares in the market to increase liquidity, encouraging and incentivising large domestic private companies to get listed, completing market reforms within three months with foreign expert assistance to prevent manipulation, taking strict action against those involved in irregularities or manipulation, and encouraging heavily debt-dependent businesses to raise funds via bonds and equity instead of relying solely on bank loans. The current commission is working to implement these directives.

A finance ministry-formed committee recommended creating a Tk10,000 crore fund to boost liquidity in the capital market, alongside a Tk3,000 crore fund offering loans to small investors at a 4% interest rate.

The committee in its report also proposed raising institutional investors' share to 60% and encouraging participation through tax incentives, including tax-free dividend income up to Tk1 lakh. It further proposed cutting capital gains tax to 5%, offering a 20% tax rebate on asset-backed securities, and extending tax exemptions for mutual funds.

The report calls for broader capital market development, strengthening the BSEC, reinforcing the state-owned Investment Corporation of Bangladesh (ICB), and improving stock exchange governance.

The market remains volatile, with fluctuating indices, limited trading volume, and investor confidence yet to fully recover. Post-election, the market may see moderate stabilisation, but long-term recovery will require policy consistency and restored investor trust.

Overall, the period following the July uprising can be seen as a transformative phase for Bangladesh's stock market. BSEC's measures focused on strengthening structural foundations. Punitive actions, legal reforms, floor price withdrawals, and advisory directives aimed to ensure market transparency and discipline. Yet, political and economic challenges mean achieving full market stability and restoring investor confidence will remain a gradual process.

Leaders of the country's brokerage community have called on the newly elected government to demonstrate its commitment to capital market reform within the first 100 days in office, stressing that timely and decisive measures are crucial to restoring investor confidence and stabilising a fragile economy.

"We want to see what concrete measures the new government takes within its first 100 days to develop the capital market in line with its election manifesto," said Saiful Islam, president of the DSE Brokers Association of Bangladesh (DBA), in a conversation with The Business Standard.

The oath-taking of the newly elected members of parliament and the cabinet members of the new government is likely to take place on Monday or Tuesday.

The Election Commission issued a gazette notification on Friday for the 13th parliamentary election, officially confirming the winners for 297 out of 299 seats where polling had been held.

The BNP secured 209 seats in the 12 February polls while Jamaat-e-Islami secured 68 seats.

Saiful Islam clarified that market participants' expectations are not limited to short-term actions. "Our expectations are not for the short term, but for the next five years. The BNP chairperson himself said at a press conference on Saturday that they are going to assume responsibility at a fragile time for the economy," Saiful said.

According to him, to steer both the fragile economy and the battered capital market towards recovery, the new BNP-led government must embark on a path of massive development. "We want to see clear initiatives and a roadmap for economic and capital market development within the first 100 days," he added.

Minhaz Mannan Emon, director of the Dhaka Stock Exchange, echoed similar sentiments. He said that in response to long-standing investor demands, the BNP included a specific roadmap for capital market development in its election manifesto.

"Investors now want to see the successful implementation of that roadmap," he said.

Emon alleged that during the past 15 to 17 years under what he described as a "fascist government," the capital market was subject to widespread plundering and mismanagement.

"The market was pushed to the brink of destruction," he said, adding that thousands of investors were rendered financially devastated during this period.

He noted that affected and nearly bankrupt investors now have high expectations from the new government. "There are strong hopes and aspirations among affected investors. We want to see the successful implementation of the commitments made toward the stock market," Emon said.

He further urged the incoming administration to continue the reform initiatives undertaken by the interim government in the capital market. "At the same time, good governance and discipline must be restored in the market to encourage investors to return."

Emon also stressed the importance of merit-based appointments at the Bangladesh Securities and Exchange Commission. He said the new government should appoint the BSEC chairman and commissioners based on qualifications rather than political considerations.

"The stock exchanges should be allowed to operate independently without interference. The media must also be able to function freely so that it can report on manipulation, irregularities and corruption. This will enhance transparency in the stock market," he said.

Echoing Emon's concerns, Saiful Islam said he expects the new government to overhaul the BSEC and appoint honest and competent individuals. He pointed out that policy inconsistency and a lack of coordination among regulators have significantly harmed investors.

Citing an example, Saiful said that at one stage it was announced that nine non-bank financial institutions would be liquidated, but later the number was revised to six. "Because of such inconsistency, investors have lost hundreds of crores of taka," he said.

He described policy inconsistency and non-cooperation among regulators as very serious issues. "We hope the new government will take responsibility and resolve these problems," he said, adding that the administration should work closely with the stock market to ensure its sustainable development.

Market stakeholders have identified several persistent challenges facing the capital market. Regulatory reforms remain stalled, while the supply side has weakened significantly, with virtually no new initial public offerings in the past three years.

Governance and transparency have yet to improve meaningfully, and foreign investment participation remains low. In addition, a lack of effective coordination among regulators and frequent policy reversals has further eroded investor confidence.

Despite these structural weaknesses, the market showed a strong rally in the two trading sessions leading up to the national election. The benchmark DSEX index gained 170 points to reach 5,399, while market capitalisation rose by Tk9,800 crore. Daily turnover climbed to Tk790 crore, marking a four-month high.

Market participants believe this rally reflects optimism surrounding political stability and expectations of reform under the new government. However, brokers and exchange officials caution that without swift and visible policy actions, the renewed momentum may prove short-lived.

Bangladesh Bank Governor Ahsan H Mansur yesterday said that without effective implementation of good governance, meaningful results cannot be achieved in the insurance sector, stressing that accountability must be ensured across regulators, insurers and all stakeholders.

He made the remarks while speaking as the chief guest at the launching ceremony of the Insurance Development and Regulatory Authority's (IDRA) new website and digital insurance manual at the BIAM Foundation auditorium in the capital.

Mansur said the central bank would provide necessary support from the banking sector, but warned that the market cannot be allowed to function without oversight.

"There are comprehensive governance conditions. If these conditions are not fulfilled, desired outcomes will not be achieved," he said, adding that while the market may move at its own pace, regulators will not allow it to operate independently without responsibility.

Highlighting long-standing weaknesses in the insurance industry, the governor said investment, accounting and premium collection had taken place in many cases, but customer liabilities were not being paid due to poor fund management. He instructed chief executive officers and chief financial officers of insurance companies to manage funds properly so that claims and liabilities can be met on time.

The programme was presided over by IDRA Chairman M Aslam Alam. Special guests included Kazi Sakhawat Hossain Lintu, vice-president of the Bangladesh Insurance Association, BM Yusuf Ali, president of the Bangladesh Insurance Forum.

Mansur formally unveiled the upgraded IDRA website and the digital insurance manual, describing the initiative as a crucial step in restoring discipline and transparency in the sector.

He said reforms were the only way to rescue the insurance industry, which has long been plagued by governance failures, weak compliance and low public trust.

He also noted that Bangladesh's insurance sector remains small relative to the size of the economy, limiting its contribution to GDP.

The governor said the government can take certain initiatives, but product development and market expansion largely depend on private-sector participation. He emphasised that insurance coverage can be extended to both movable and immovable assets, and urged coordinated efforts to expand the market, warning that without growth the sector would remain constrained.

He also called on insurers to actively provide data through the regulator's new digital platform, cautioning that digitisation would be delayed without proper information flow.

Mansur encouraged insurers to move towards cashless transactions, saying reduced cash use would help increase government revenue. Bangladesh Bank, he added, would support this transition, while IDRA would prepare guidelines to ensure premiums are deposited through banks.

Concluding his speech, the governor said the sector had lost its way by prioritising short-term profits and must now be rebuilt as a productive and trustworthy industry.

IDRA Chairman M Aslam Alam said the digital insurance manual compiles all relevant laws, rules, regulations and circulars in an accessible format. Available as an e-book, HTML version and downloadable PDF, the manual is designed to be user-friendly.

He said if reforms are implemented properly, the insurance sector could see significant progress within five years, but warned that failure to act would deepen existing problems.

Shares of eight non-bank financial institutions (NBFIs) flagged for closure by Bangladesh Bank saw sharp gains today (9 February), with prices rising between 10% and 10.42% on the Dhaka Stock Exchange (DSE).

The central bank had in December last year announced plans to shut down nine NBFIs under the Bank Resolution Ordinance 2025, the country's first comprehensive framework for merging, restructuring, or liquidating failed banks and financial institutions. The nine included FAS Finance, Bangladesh Industrial Finance Company (BIFC), Premier Leasing, Fareast Finance, GSP Finance, Prime Finance, Aviva Finance, Peoples Leasing, and International Leasing.

The closure decision came amid persistent irregularities and weak management, with default loan ratios ranging between 75% and 98%. However, BB later excluded GSP Finance, Prime Finance, and BIFC from the closure list, granting them three to six months to improve financial indicators.

Market insiders said investors reacted to the possibility that a new government after the upcoming election might reconsider or delay the closures, triggering strong buying interest. Earlier, the announcement of the closures had sent share prices of these institutions plunging, causing heavy losses for investors.

Today, FAS Finance rose 10.31%, BIFC 8.33%, Premier Leasing 9.78%, Fareast Finance 10%, GSP Finance 10%, Prime Finance 10%, Peoples Leasing 10.42%, and International Leasing 10.42%.

Bangladesh Bank said a total of Tk15,370 crore in deposits remains stuck in these nine institutions, including Tk3,525 crore from individual depositors and Tk11,845 crore from banks and corporate entities. Among individual deposits, Peoples Leasing holds the largest amount at Tk1,405 crore, followed by Aviva Finance (Tk809 crore), International Leasing (Tk645 crore), Prime Finance (Tk328 crore), and FAS Finance (Tk105 crore).

Seven of the nine NBFIs currently report a negative net asset value per share of Tk95, meaning shareholders would receive nothing if assets were liquidated.

Experts said years of weak oversight, related-party lending, failure to recover defaulted loans, and inflated asset valuations left many of these institutions effectively insolvent.

GQ Ball Pen Industries, a publicly listed company, posted a 4.62% year-on-year rise in sales in the first half of the current fiscal year, while its losses narrowed during the July–December period, according to its latest financial statements.

Sales increased to Tk1.13 crore in H1, up from Tk1.08 crore in the same period of FY25. The company reported a net loss of Tk78 lakh, translating to a loss per share of Tk0.87. In the corresponding period a year earlier, it had posted a larger net loss of Tk1.27 crore, with a per-share loss of Tk1.43.

Explaining the continued losses, the company attributed the negative earnings per share (EPS) primarily to higher raw material and input costs, a stronger US dollar, and subdued sales amid weak market demand. These factors led to a significant operating loss during the period, which weighed on overall earnings.

Despite recording a per-share loss of Tk1.83 for FY25, the company declared a 10% cash dividend for general shareholders, excluding sponsor-directors.

Following the dividend payout, the Dhaka Stock Exchange upgraded GQ Ball Pen's listing status to Category A from Category B. The company's shares closed at Tk491.80 on the latest trading day, down 2.05% from the previous session.

The UK's NatWest Group said on Monday it had agreed to buy Evelyn Partners in a deal valuing one of Britain's largest wealth managers at 2.7 billion pounds ($3.68 billion), including debt.

Evelyn's private equity shareholders, Permira and Warburg Pincus, kicked off a sale of Evelyn last year, drawing interest from Barclays, NatWest, Lloyds and the Royal Bank of Canada, Reuters had reported.

The deal creates Britain's largest private banking and wealth management business and transforms NatWest Group's savings and investment offering for its 20 million customers, the British lender said.

NatWest expects the deal to generate about 100 million pounds in annual cost savings and also announced a 750 million pound share buyback.

Bangladesh’s foreign exchange reserves crossed $29 billion for the first time since the central bank began calculating the stock in line with the International Monetary Fund (IMF) method.

Yesterday, reserves stood at $29.47 billion, up from $29.23 billion recorded on February 5, according to Bangladesh Bank (BB).

This is the highest level since July 12, 2023, when the BB started computing reserves under the sixth edition of the IMF’s Balance of Payments and International Investment Position Manual (BPM6) — a global framework that reflects readily available reserves to clear import bills and other international obligations.

Thanks to rising remittances and moderated import demand, reserves have been gradually replenishing for more than a year.

The turnaround began after the fall of the Awami League government in August 2024, as remittance inflows increased.

The BB said gross reserves reached $34.06 billion yesterday, the highest since November 2022. Continued purchases of the greenback also supported the rebound.

Previously, the BB had sold dollars to support the taka’s value, but at the start of the current fiscal year, it began buying US dollars from banks to curb depreciation and stabilise the exchange rate.

The central bank reported purchasing $4.3 billion during this fiscal year from the interbank market through transparent auctions to build reserves.

In its monetary policy for January-June, the BB said it will maintain a focus on exchange rate flexibility, leveraging strong remittance inflows and improved reserves to buffer against external shocks.

Bangladesh’s gross reserves had crossed $48 billion in August 2021 for the first time. They later declined due to a sharp spike in imports following the removal of Covid-19 curbs and rising global commodity prices amid the Russia-Ukraine war.

By May 2024, overall dollar holdings had fallen to $24 billion.

Gold and silver extended gains on Monday, with the yellow metal trading just above $5,000 per ounce as the dollar dipped, while investors awaited key US jobs and inflation data due later in the week to gauge the interest rate trajectory.

Spot gold rose 0.9 to $5,004.61 per ounce by 0748 GMT after a 4 percent climb on Friday. US gold futures for April delivery gained 1 percent to $5,026.30 per ounce.

“This could be the very short-term intraday correlation between the dollar and silver as well as gold (driving the metals up),” said Kelvin Wong, a senior market analyst at OANDA.

The US dollar was at its lowest level since February 4, making greenback-priced metals cheaper for overseas buyers. The yen strengthened after Japanese Prime Minister Sanae Takaichi swept to victory in Sunday’s election.

“Bargain-hunting is (also) pushing gold back above the $5,000 level,” said KCM chief analyst Tim Waterer.

Investors await monthly reports on employment and consumer prices this week, and expect at least two 25-basis-point rate cuts in 2026, with the first one expected in June. Non-yielding bullion tends to do well in low-interest-rate environments.

“Any softness in the jobs data could help gold’s rebound efforts. We are not expecting a rate cut from the Fed until mid-year, unless the jobs data really starts to drop off a cliff,” Waterer said.

San Francisco Federal Reserve President Mary Daly said on Friday she thinks one or two more interest rate cuts may be needed to counteract weakness in the labour market.

Spot silver climbed 3.7 percent to $80.89 per ounce after a near 10 percent gain in the previous session. It hit an all-time high of $121.64 on January 29.

“Unless silver is able to clear above that key resistance at $92.24, I’m not so convinced in terms of a probability perspective of a medium uptrend,” Wong said.

The reciprocal tariff for Bangladesh to the USA has been fixed at 19 percent, down from the existing 20 percent, as Bangladesh and the USA tonight signed a trade agreement, Commerce Secretary Mahbubur Rahman told The Daily Star after the signing.

The USA has granted duty-free or lower duty access to 2,500 Bangladeshi products, while Bangladesh allowed 4,400 American products either duty-free or at lower duty, the commerce secretary also said.

Garment items made from imported American cotton are allowed zero duty on export to the USA, Rahman added.

Pharmaceutical products, fisheries, particle board, and all kinds of food items will also enjoy duty-free access to the US market.

On the Bangladesh side, the signatories were Commerce Adviser Sheikh Bashir Uddin and National Security Adviser Khalilur Rahman, while on the US side Ambassador Jamieson Greer, US Trade Representative, signed the agreement, according to a statement released by the Chief Adviser’s Office.

Negotiations on the agreement spanned nine months since April last year, the statement read.

Ambassador Greer lauded Chief Adviser Muhammad Yunus for his overarching leadership of the negotiation process and praised the Bangladesh negotiating team for its "incredible efforts.”

“This agreement will fit Bangladesh into US trade policy,” he said.

After the signing, the commerce adviser, who led the Bangladesh side in negotiations, said: “The agreement marked a historically new level in our bilateral economic and trade relations. It will provide substantially enhanced access for Bangladesh and the US to each other's respective markets.”

The US will further reduce the reciprocal tariff to 19%, which was originally set at 37% and later reduced to 20% in August last year.

In addition, the US committed to establishing a mechanism for certain textile and apparel goods from Bangladesh using US-produced cotton and man-made fiber to receive zero reciprocal tariff in the US market.

“The reduction of reciprocal tariff will grant further advantage to our exporters, while zero reciprocal tariff on specific textile and apparel exports from Bangladesh using US inputs will give substantial added impetus to our garments sector,” said National Security Adviser Rahman, who was Bangladesh's chief negotiator.

The agreement was approved by the Council of Advisers and will be operational once notifications are issued by the two sides.

Present during the signing were the commerce secretary of Bangladesh and Assistant US Trade Representative Brendan Lynch.

The Bangladesh Bank (BB) kept its policy rate unchanged at 10 percent yesterday, citing persistent high inflation ahead of the national election this week.

The policy rate, or repo rate, is a key tool used to influence credit demand and money circulation, aiming to contain demand-driven inflation. The central bank said it would maintain its tight monetary stance throughout the January-to-June period.

In line with this approach, the BB has kept the double-digit policy rate since October 2024.

Despite this monetary tightening, inflation rose for the third consecutive month, reaching 8.58 percent in January.

Rising food prices ahead of Ramadan, the month of fasting for Muslims when demand for certain food items usually ticks up, contributed to the increase, according to the state statistical agency BBS.

The 12-month average inflation in January stood at 8.66 percent, well above the BB’s target of reducing the price pressure below 7 percent.

While unveiling the monetary policy, BB Governor Ahsan H Mansur said many objectives had been achieved, but inflation remained above target. He highlighted broader economic improvements, especially in governance and stabilising the banking and financial sector.

“However, inflation remains slightly behind target. The goal was to bring it down to around 7 percent, but it is still about 8.5 percent,” Mansur said, adding that monetary policy alone cannot achieve all outcomes, and that it must be coordinated with fiscal measures.

In the Monetary Policy Statement, the BB reduced the Standing Deposit Facility (SDF) rate, at which commercial banks park excess liquidity with the central bank, by 50 basis points to 7.5 percent.

Amid weak private-sector credit growth, the adjustment is intended to discourage banks from holding funds at the BB and encourage lending to the private sector.

Credit to the private sector fell to a historic low of 6.1 percent in December, while public-sector lending rose to 28.9 percent. However, the projection for private-sector credit growth was at 7.2 percent and public-sector growth at 20.5 percent.

Mansur noted that government borrowing heavily influences the money market, tightening liquidity and keeping interest rates high, which crowds out private-sector lending.

“Total credit has grown, but a large portion has gone to the government rather than the private sector, creating distribution pressure,” he said.

In the Monetary Policy Statement, the BB projects public-sector credit growth to reach 21.6 percent in the second half of FY26, driven by pre-election fiscal spending and post-election administrative expenditures during the government transition.

Besides, the government’s budget target of borrowing Tk 1,18,000 crore from the banking system was factored into this projection.

The governor said domestic credit expansion is strong, but private-sector lending could have grown faster if government borrowing were lower.

Mansur said persistent government demand in the money market keeps pressure on overall demand and prevents interest rates from falling rapidly.

He said high rates, though restrictive, have helped stabilise the exchange rate and supported foreign reserve accumulation.

“Earlier, Bangladesh repeatedly failed to meet IMF reserve targets, but since August 2024 all quarterly targets have been achieved or even exceeded, even before receiving IMF funds,” Mansur said.

Gross foreign exchange reserves stood at $34.06 billion yesterday, up from around $26 billion a year earlier. Under IMF calculations, reserves were $29.47 billion according to the BPM6 model.

The policy statement noted that economic activity remained broadly stable, supporting a positive growth outlook. “However, political developments, soft industrial output, persistent inflation, and global headwinds may undermine growth prospects,” it added.

Inflation has moderated, but at a slow pace, suggesting expectations are not yet firmly anchored around the target. “This development underscores the need for continued policy tightening, which should cool inflation further by the end of this fiscal year,” the statement said.

Syed Mahbubur Rahman, managing director of Mutual Trust Bank, told The Daily Star that the policy rate alone cannot curb inflationary pressure, given supply-chain constraints and other factors.

He said that most loans in Bangladesh are corporate, with only 10 percent in retail, so interest rate hikes do not affect consumers immediately. Private-sector loan demand would not rise sharply even after the election.

Birupaksha Paul, professor of economics at the State University of New York in Cortland, said the 10 percent repo rate remains appropriate but is contributing to cost-push inflation.

“Private credit growth was 6.1 percent in December 2025 and is projected to be 8.5 percent in June 2026. While that part is tightened with the aim of reducing inflation, public-sector credit growth, projected at 21.6 percent, will be the main driver of sustained high inflation.”

He noted that the projection is ambitious, given that public-sector credit reached 28.9 percent in December 2025. Additional spending on new pay scales could make reducing it to around 22 percent difficult.

Paul, a former chief economist of BB, added that the economy may gain momentum after the election, but its strength will depend on improvements in law and order.

Ashikur Rahman, principal economist at the Policy Research Institute, said the BB’s cautious stance is justified as inflation remains stubbornly high. The recent rise in prices appears partly driven by electoral dynamics, which boost consumption ahead of national elections.

Fahmida Khatun, executive director at the Centre for Policy Dialogue (CPD), said contractionary monetary policy is appropriate given persistent inflation, but fiscal policy also needs tightening, and market monitoring should be strengthened.

She added that a prolonged tight stance is unfavourable for investment, but controlling inflation must take priority.

In a reaction, the Dhaka Chamber of Commerce and Industry expressed concern over the BB’s decision to maintain a contractionary stance solely to control inflation.

“The reality, however, tells a different story. Despite prolonged tight monetary conditions, inflation has not been effectively contained, proving that this tool has largely failed while inflicting serious damage on productive economic activities,” the chamber said.