Bangladesh Bank Governor Md Mostaqur Rahman has said he expects to receive funds from the finance ministry in July this year to liquidate six non-bank financial institutions (NBFIs).

He made the remarks at a meeting with senior journalists at the central bank on Sunday. "We expect that the funds required to liquidate the six financial institutions will be received from the finance ministry in July this year," he said.

A senior central bank official told TBS, "The finance division has informed us that the money will be released in two phases. In the first phase, Tk2,600 crore will be provided. Then, by June, another Tk3,000 crore will be released in the second phase."

He added, "As soon as we receive the first tranche, we will appoint administrators to the institutions concerned. Their primary task will be to repay depositors in the private sector. We will first settle individual depositors' funds and then apply to the court for liquidation of the institutions."

Earlier, on 27 January, the Bangladesh Bank board decided to liquidate six institutions. In the same meeting, three institutions were given three to six months' time.

The six NBFIs are FAS Finance, Premier Leasing, Fareast Finance, Aviva Finance, People's Leasing, and International Leasing.

The three institutions given time are Bangladesh Industrial Finance Company, GSP Finance Company, and Prime Finance and Investment Limited.

Currently, there are 35 non-bank financial institutions in the country, of which 20 have been identified as distressed by the central bank.

These 20 institutions have total loans amounting to Tk25,808 crore, of which Tk21,462 crore – about 83.16% – are defaulted. In contrast, the value of collateral stands at only Tk6,899 crore.

On the other hand, the 15 relatively healthy institutions have a default loan rate of just 7.31%. Last year, they made a profit of Tk1,465 crore and have a capital surplus of Tk6,189 crore.

Deposits in the 20 troubled institutions total Tk22,127 crore, of which net individual deposits amount to around Tk4,971 crore. The central bank believes that this amount may be required initially to support the liquidation and restructuring process.

The dollar was near a 10‑month high on Monday and heading for its biggest monthly gain since last July ​as mixed signals from Iran and the United States dimmed hopes of a possible quick end to the ‌Middle East conflict.

US President Donald Trump said that Iran's new leaders have been "very reasonable", as more US troops arrived in the region and Tehran warned it will not accept humiliation.

The yen hovered near the key 160 per‑dollar level, after hitting its weakest since July 2024 when Tokyo last intervened to shore up the currency, while ​the euro found some support from expectations of European Central Bank rate hikes.

Markets have been rattled this month after the Iran conflict effectively ​shut the Strait of Hormuz, a chokepoint for about a fifth of global oil and gas flows, driving Brent ⁠crude toward a record monthly rise.

The dollar has benefited from its safe‑haven status since early March, with higher oil prices hurting Japan ​and the euro zone but insulating the United States as a net crude exporter.

The US dollar index was roughly unchanged at 100.19. It ​hit 100.54 in mid-March, its highest level since May 2025, and was on track for its biggest monthly rise since July 2025.

Barclays said dollar sentiment was approaching "max bullish" levels on its index, according to traditional gauges including growth proxies, rate differentials and beta indicators.

"The playbook is to sell rallies in risk and ​maintain volatility hedges," said Chris Weston, head of research at Pepperstone.

Markets will closely watch US jobs data later in the week, which could ​affect expectations for the Federal Reserve policy path.

"In the eye of the storm, this week delivers a crucial run of US labour market data," said ‌Bob Savage, ⁠head of markets macro strategy at BNY.

"Given the weak February jobs report and a month of conflict in the Middle East, we’re keen to learn how the jobs situation has responded," he added.

Foreign aid disbursement to Bangladesh fell by 26 percent year-on-year during the July-February period of the current 2025-26 fiscal year, according to the Economic Relations Division (ERD).

Development partners and international lending agencies released $3.05 billion in loans and grants during this eight-month window, the ERD said in a report published on Monday..

This marks a sharp decline from the $4.13 billion disbursed during the same period in the previous fiscal year.

While the inflow of funds slowed, the burden of repayment continued to climb.

Between July and February, the government paid $2.90 billion in principal and interest on existing foreign debts.

In contrast, debt servicing stood at $2.64 billion during the corresponding months of the last fiscal year.

Economists and ERD officials attribute the slowdown to lingering economic instability following the political transition in 2024.

Bangladesh secured higher foreign loan commitments in the first eight months of the current fiscal year, yet actual disbursement fell by 26 percent compared with the same period last year, raising concerns about the country’s ability to use external funds effectively.

Between the July-February period, foreign loan disbursement dropped to $3.05 billion, down from $4.13 billion a year earlier, according to data released by the Economic Relations Division (ERD) yesterday.

The decline was driven largely by slower project aid, the primary channel for financing infrastructure and development projects.

Disbursement under project assistance fell to just above $3 billion in the first eight months of this fiscal year, compared with over $4.1 billion during the same period last year.

This slowdown comes despite nearly $40 billion in financing commitments from foreign lenders.

Analysts say the widening gap between pledged funds and actual disbursement reflects Bangladesh’s limited capacity to use external resources on time.

Foreign aid is crucial for roads, power plants, and social sector projects, but delays can reduce project benefits and increase costs.

The trend is particularly concerning as Bangladesh’s external debt servicing rises. During the July-February period, the country paid $2.9 billion in principal and interest, up from $2.63 billion a year earlier.

Deen Islam, professor of economics at Dhaka University, said the figures indicate a gradual shift from development financing to debt rollover.

“When a large portion of new external borrowing is used to service existing debt rather than finance productive investment, the net inflow of resources into the economy declines,” he said.

“Infrastructure and development spending may slow, while rising debt servicing puts additional pressure on foreign exchange reserves and the exchange rate,” Islam said.

He added that the situation could also fuel imported inflation. While not yet a crisis, he described it as a “warning sign”.

“If this trend persists, policymakers will face difficult trade-offs between taking on more debt and reallocating domestic resources away from development spending,” he said.

Meanwhile, Monzur Hossain, member (secretary) of the General Economics Division (GED) under the Planning Commission, said, “Loan disbursement is directly tied to project progress. When implementation slows, disbursement inevitably falls.”

He pointed to structural bottlenecks, particularly in investment projects.

“Many projects involve complex conditions, and meeting those requirements takes time. Land acquisition remains a major challenge in many cases,” Hossain said.

He also noted weaknesses in the execution of the Annual Development Programme (ADP) as a key factor. “Since most of these loans are linked to ADP projects, delays in overall project execution translate into slower disbursement,” he added.

During the period of the interim government, many projects were almost stagnant. However, Hossain expressed optimism about improvement in the coming months.

“Now, with a political government in place, monitoring has increased, projects are being prioritised, and delays are being scrutinised more closely,” he said.

“I expect the situation to improve soon, particularly in the final months of the fiscal year as measures taken by the Planning Commission begin to take effect,” he added.

The 14th Ministerial Conference (MC14) of the World Trade Organization (WTO) concluded early yesterday with no significant agreements, except promises to continue working towards consensus on disputed issues among member countries.

The four-day conference, which began on March 26, saw nearly 2,000 officials, including more than 90 ministers, debate key topics such as the moratorium on customs duties for electronic transmissions and broader WTO reform.

Originally scheduled to end on Sunday, the meeting stretched past midnight as ministers tried to bridge gaps on major issues.

DEADLOCK ON E-COMMERCE MORATORIUM

The WTO’s moratorium on customs duties for electronic transmissions expired yesterday after nearly three decades. Negotiations in Yaoundé continued late into the night but concluded without a final agreement.

Diplomats worked to reconcile differences between Brazil, which initially sought a two-year extension and later proposed a four-year extension with a mid-term review, and the United States, which pushed for a permanent moratorium to protect major companies such as Amazon and Apple from digital taxation.

A draft proposal for a four-year extension with a one-year sunset buffer, extending the moratorium to 2031, was also discussed but not agreed upon, reports Reuters.

Developing countries, including India, opposed a lengthy extension, arguing that the moratorium denies them potential tax revenue that could be reinvested domestically. Some 66 nations, however, agreed to an interim arrangement pending ratification.

WTO Director-General Ngozi Okonjo-Iweala said, “The e-commerce moratorium had expired, meaning countries could apply duties on electronic goods such as digital downloads and streaming. But we hope to be able to restore the moratorium and Brazil and the US were trying to reach agreement on it. They need more time and we didn’t have the time here.”

Cameroon Trade Minister Luc Magloire Mbarga Atangana, chair of MC14, added that WTO talks would continue in Geneva, expected in May.

Britain’s Business and Trade Secretary Peter Kyle called the failure to reach a collective decision in Yaoundé a “major setback for global trade.”

REFORM TALKS MAKE PARTIAL PROGRESS

Ministers and delegates made some progress drafting a plan for broader WTO reform, though no final agreements were reached, reports AFP. They were tasked with creating an action plan to revitalise the organisation, weakened by geopolitical tensions, stalled negotiations, and rising protectionism.

A draft reform roadmap outlining timelines and key issues, seen by Reuters, was close to agreement before the talks ended. Completion of any reform deal, however, will depend on resolving recurring issues, such as improving consensus-based decision-making and extending trade benefits to developing countries. Ministers also fell short of expectations on agriculture and other areas.

Ngozi Okonjo-Iweala welcomed progress in discussions on WTO reform, fisheries subsidies, and other issues.

KEY OUTCOMES

The WTO announced that ministers agreed to continue negotiations on fisheries subsidies, aiming to present recommendations at the 15th Ministerial Conference for comprehensive rules.

Two decisions were also adopted that had been previously endorsed in Geneva: improving the integration of small economies into the multilateral trading system, and enhancing the implementation of special and differential treatment provisions under the Sanitary and Phytosanitary Measures (SPS) and Technical Barriers to Trade (TBT) agreements.

The WTO director-general confirmed that members would return to Geneva with drafts of the Yaoundé Ministerial Declaration on WTO Reform and Work Plan, the Ministerial Decision on Electronic Commerce, the Ministerial Decision on TRIPS Non-Violation and Situation Complaints, and the LDC package.

As energy stress spreads across Southeast Asia, governments across the region are asking China to deliver on its pledges of closer energy security cooperation by freeing up now-banned exports ​of fertiliser and fuel.

But so far China has offered only vague statements and has yet to even publicly acknowledge the export bans reported by Reuters and others as it focuses ‌on insulating its own economy from the war in Iran.

Analysts don’t expect that to change, pointing to the tension between China’s stated ambition to be a bigger player in regional affairs and the realpolitik of its commitment to keep its own economy outpacing global growth.

China is the world’s second largest fertiliser exporter and also a large supplier of fuel. For many countries in Asia including Bangladesh, the Philippines and even Australia, Chinese imports are a major source of supply, now cut off by its export bans.

Dhaka earlier this month asked China to honour existing fuel contracts, while Thai diplomats will engage Chinese counterparts to keep fertiliser shipments from China flowing if needed, officials in Bangkok said.

In Malaysia, officials said last week the Chinese export ban would worsen fertiliser rationing, including in its oil palm industry, the world’s second-largest, and add a further blow on top of the war in Iran.

Even the Philippines has sought assistance despite the two countries’ disputes over the South China Sea.

On March 17, the Philippines minister of agriculture visited China’s embassy in Manila and said China had agreed to continue fertiliser shipments. Beijing’s one-sentence readout said only that they had discussed agriculture.

The same day Australia, which imported a ​third of its jet fuel from China last year, said it was discussing jet fuel exports with Beijing.

“China may offer some ceremonial assistance, but it’s highly unlikely, if not wholly improbable, that it will share any substantive amount of its food, energy, or other reserves with other countries,” said Eric Olander, co-founder of the China-Global South Project.

In addition, we’re talking about the impact of the war in the Middle East.

In fact, analysts said Chinese policymakers were likely quietly congratulating themselves on the strategic foresight to begin stockpiling since the early 2000s, a policy that may have seemed excessive in peacetime but now looks decidedly practical.

People’s Daily, the Communist Party’s flagship newspaper, trumpeted China’s relative energy security in an editorial earlier this month ​and said the country’s foresight meant China held the “energy lifeline” in its own hands.

China’s Ministry of Foreign Affairs did not immediately respond to questions from Reuters.

‘A TRIED AND TESTED PLAYBOOK’

China’s flagship Belt and Road infrastructure initiative ‌has seen world leaders regularly congregate in Beijing to discuss ‘win-win’ cooperation but with the region now short on fuel and fertiliser, Southeast Asian capitals are instead looking for replacements from the likes of Russia.

“China won’t want to create expectations it can’t sustain. Beijing has no desire to be a regional energy backstop for an indefinite period of disruption,” according to Ruby Osman, a senior policy adviser at the Tony Blair Institute for Global Change.

Beijing will likely stick to its tried-and-tested playbook: imposing sharp, broad curbs on energy and energy-related exports before selectively resuming trade once officials are confident domestic demand can be met, she said.

Famine and ​scarcity remain deeply embedded in China’s political consciousness, ​with the trauma of Mao Zedong’s Great Leap Forward and Cultural Revolution still close enough to remember.

“Only if China gets more comfortable with its own exposure, then I would expect meaningful support,” said Max Zenglein, senior economist at the Conference Board Asia. “I expect any support will be very transactional. Not a good position to be in if ​you are one those countries, unfortunately.”

Wang Jin, a senior fellow at the Beijing Club for International Dialogue, a think tank under China’s foreign ministry, said Beijing could also benefit if the shock pushes trading partners to accelerate investment in green and nuclear energy, sectors where China leads after years of state-backed investment.

What is more, with no major aid donor such as Japan, or regional rival, stepping in to plug shortages, China faces little pressure to do so itself, analysts said.

Olander compared the situation to the Covid-19 pandemic, when officials across the region looked to India as Asia’s main source of ⁠vaccines, only for New Delhi to halt exports as infections surged at home.

Osman said China’s partners seeking concessions would do well to remind Beijing of its own commitments.

“Maybe the key is just to quote this new bit of the five-year plan back to Beijing: ‘strengthen international cooperation in food, energy, data, biological and sea passage security, counter-terrorism and other fields.”

Development organisation Sajida Foundation has got regulatory approval to raise Tk158.5 crore through a non-convertible, unsecured zero-coupon bond aimed at expanding financial inclusion and strengthening women-led enterprises and SME financing across Bangladesh.

The Bangladesh Securities and Exchange Commission approved this in a meeting held in Dhaka today (30 March).

The proposed instrument, titled "Sajida Orange Zero-Coupon Bond," is designed as a social impact financing tool to support long-term development initiatives. The bond will be issued through private placement and is intended to channel funds into women-focused economic empowerment programmes.

Earlier, Sajida Foundation raised Tk198 crore through a zero-coupon bond in 2024 and Tk100 crore through a green zero-coupon bond in 2021, reflecting its gradual shift towards capital market-based financing to reduce donor dependency and scale up development activities.

Zahida Fizza Kabir, chief executive officer (CEO) of Sajida Foundation, told The Business Standard, "The Orange bond is a vital tool that allows us to scale our impact by mobilising domestic capital to meet the essential needs of underserved women in Bangladesh."

He said, "By focusing on SME financing, secure housing, and food security, we are not just providing financial aid, we are investing in the resilience and leadership of women who are the backbone of our communities."

Zahida further said, "This is a watershed moment for Bangladesh's capital market. The Orange bond proves that purpose and profit are not in conflict; rather, they are complementary. The BSEC's approval signals that our market is ready to compete globally in sustainable finance, and we are proud to have pioneered this journey alongside Sajida Foundation."

Under the proposed structure, BRAC EPL Investments Limited will act as the issue manager, while DBH Finance PLC will serve as a trustee. The issuance will require approval from the BSEC and a no-objection certificate from the Microcredit Regulatory Authority.

The proceeds will be deployed under "eligible orange projects," focusing on women's empowerment, SME development, employment generation, agriculture, food security, and housing. A key priority is expanding access to affordable credit for women entrepreneurs, particularly in rural and underserved communities.

According to the allocation plan, around 32% of the funds will be directed to SME financing and employment generation, 20% to housing-related initiatives, and approximately 40% to agriculture and food security projects. The remaining portion will be used for microfinance operations, programme implementation, and technology-driven financial inclusion initiatives.

The bond is structured as a zero-coupon instrument, meaning investors will not receive periodic interest payments. Instead, they will purchase the bond at a discounted price and receive the full face value at maturity. The total issue size is Tk158.5 crore, while the indicative present value, based on an 11.5% discount rate, is estimated at around Tk127.99 crore.

Each bond carries a face value of Tk3,33,333, with a total of 4,755 bonds to be issued. Investors will have the option to choose tenors of one, two, or three years, with expected yields ranging between 7% and 11.5%, depending on market conditions.

The instrument will be listed on the Alternative Trading Board of the stock exchange, though secondary market liquidity is expected to remain limited. The repayment structure is designed on an equal annual basis, with portions of the bond redeemed each year to manage cash flow efficiently.

Sajida Foundation has received a long-term credit rating of AA+ and a short-term rating of ST-2 from Emerging Credit Rating Limited, reflecting a strong capacity to meet financial obligations and a stable outlook. However, the bond remains unsecured and carries no collateral backing.

To mitigate risk, the structure includes a rating-trigger mechanism. If the credit rating falls below investment grade (below BBB or ST-3), an additional premium of 0.25% to 1% will be added to the discount rate, offering partial protection to investors.

The bond does not include an early redemption option, meaning investors must hold it until maturity. In case of delayed payments, the issuer will be required to pay an additional 2% annual penalty on overdue amounts.

Founded in 1987, Sajida Foundation began as a privately funded family charity and has since evolved into one of Bangladesh's leading development organisations. It works across microfinance, healthcare, education, and social protection programmes, currently operating in 36 districts and reaching over 60 lakh people.

The organisation also maintains a strong financial base, including a 51% ownership stake in Renata Limited, a listed pharmaceutical company whose dividends significantly support its financial sustainability. In addition, Sajida Foundation collaborates with national and international development partners.

Market analysts note that the issuance reflects a broader shift in Bangladesh's development financing landscape, where non-government organisations are increasingly accessing capital markets to diversify funding sources. While the bond offers attractive returns and strong social impact potential, experts caution that its unsecured nature and limited liquidity may pose risks for conservative investors.

The Sajida Orange Zero-Coupon Bond represents a significant step towards integrating capital market financing with social development objectives, particularly in advancing women's economic empowerment and inclusive growth in Bangladesh, say analysts.

Foreign investors have continued withdrawing funds from Bangladesh's equity market over the past nine months through February this year amid persistent geopolitical tensions and macroeconomic uncertainties.

Political stability following the Bangladesh Nationalist Party's landslide victory in the February polls has failed to attract foreign investment, as intensifying conflict in the Middle East poses fresh economic challenges.

Md Akramul Alam, head of research at Royal Capital, said overall economic activity remained sluggish amid continued uncertainty, while the profitability of major listed companies stayed subdued due to high input costs.

"Persistent macroeconomic uncertainties and ongoing geopolitical tensions discouraged overseas investors from making fresh investments in stocks," he said.

Moreover, private sector credit growth fell to a historic low of 6.03 per cent in January, reflecting weak business confidence and tighter lending conditions, he added.

The ongoing US-Israel war involving Iran has already triggered volatility in global oil and gas prices, raising concerns about inflation and broader economic spillovers in Bangladesh.

"This has dampened the prospect of a sharp recovery in private sector credit demand and the much-needed spike in fresh investment," Mr Alam noted.

He also cited a confidence crisis, a high-value dollar against the local currency, and vulnerabilities in the banking sector as key deterrents to foreign investment.

Foreign investors typically seek a stable, predictable, and long-term policy environment under an elected government to ensure the safety of their investments with good returns.

The newly elected government has yet to outline a clear economic roadmap, while the intensifying Middle East conflict has added to global economic tension.

Ahsanur Rahman, chief executive officer of BRAC EPL Stock Brokerage, said foreign investors are seeking greater clarity. "They want more information and explanations," he told The Financial Express in a recent interview.

A limited number of investable securities and frequent policy changes have also discouraged foreigners from keeping funds in the Bangladesh equity market. The market has not seen any new listings for more than two years.

The impact on stocks is palpable. Foreign investors purchased shares worth Tk 18.25 billion in 2025 against sell-offs of Tk 20.95 billion; outflow outweighed inflow, according to data from the Dhaka Stock Exchange.

When it comes to investing in stocks in Bangladesh, foreigners usually prefer multinational companies. Currently, they are not interested in putting their money into these companies either, owing to lower-than-expected earnings in recent quarters.

Most multinational companies saw their profits decline in the nine months through September 2025 compared to the same period last year, largely due to high finance costs amid political uncertainty.

Grameenphone, the largest stock in terms of market capitalisation, reported its lowest annual profit of Tk 29.6 billion in 2025 in eight years, largely driven by cost pressures and a high tax burden.

What is more, GP projected a year-on-year decline in its financial performance for the first quarter of 2026, citing mounting pressures from global geopolitical tensions and domestic economic challenges.

Subsequently, foreign stakes in GP fell to 0.60 per cent in February this year from 0.98 per cent in June last year.

British American Tobacco (BAT) Bangladesh's profit also nosedived to Tk 5.84 billion in 2025, the lowest since its listing, due to lower sales, higher excise duty, and one-off costs for the Dhaka factory closure.

As a result, BAT's foreign stake dropped from 3.43 per cent to 3.24 per cent between June last year and February this year.

Olympic Industries experienced a similar trend. Its foreign stake fell to 30.26 per cent in February this year from 34.21 per cent in June last year.

Foreign shareholding in DBH Finance also dropped from 3.73 per cent to 0.44 per cent in the nine months through February this year.

However, BRAC Bank experienced a rise in foreign stakes from 33.80 per cent to 36.72 per cent during the period, while it reported record profits.

BRAC Bank's consolidated profit stood at Tk 15.36 billion for January-September 2025, surpassing its previous year's record annual profit.

Along with the record profit, BRAC Bank provided capital-gain opportunities in the secondary market, as its stock surged 78 per cent between June last year and February this year.

According to Akramul Alam, foreign investors are concerned about the high value of the dollar against the local currency.

Although the foreign exchange market has stabilised in recent months due to higher dollar inflows, supported by strong remittance and export earnings, the taka-dollar exchange rate remains as high as before.

"When the local currency weakens, foreign investors incur losses as the value of their assets falls even when share prices remain unchanged," Mr Alam said.

He also noted that many global fund managers have, in the meantime, rebalanced their portfolios, while others have shifted to gold to secure their investments instead of investing in equities.

"Foreign investors are closely monitoring Bangladesh. Portfolio investment may pick up again if geopolitical tensions ease," he added.

Bangladesh's apparel exports to the European market could face a carbon tax of about 5% if emissions are not reduced, a new study warns.

The European Union (EU), Bangladesh's largest export market, has introduced the Carbon Border Adjustment Mechanism (CBAM) to curb emissions across its supply chains. Apparel products could be brought under this mechanism by 2030.

If current emission levels in Bangladesh's garment sector persist, an additional 4.8% carbon tax may be imposed on apparel exports after 2030, according to the study.

The findings come from joint research by Professor Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), and Mohammad Imraj Kabir. The report was published on the CPD website on 29 March.

This additional tax may come at a time when Bangladesh is set to lose its duty-free trade benefits in the EU market due to graduation from least developed country (LDC) status.

The study notes that the loss of duty-free access could result in an average tariff of about 12%, and with the added carbon tax of 4.8%, the total tariff burden could rise to nearly 17%.

"The carbon tax on Bangladesh's exports of apparel to the EU, using the EU-CBAM methodology, is estimated to be 4.8%," the report titled "EU Carbon Tax: Possible Implications for Bangladesh's Apparel Export" states.

"If the average EU-MFN import duty on apparel is taken to be 12.1%, the total import tariff comes to about 16.9% (12.1%+4.8%)," it adds.

This scenario could emerge after Bangladesh graduates from the LDC group in November 2026. Even if the EU extends duty-free access until 2029, the apparel sector could still face a 4.8% CBAM tax during 2026–2029 if apparel is included in the mechanism.

Professor Mustafizur Rahman told TBS, "We estimated this based on the level of carbon emissions in Bangladesh's apparel sector."

However, industry leaders are not overly concerned. They say many factories have already begun adopting environmentally friendly production processes, including renewable energy, to reduce emissions, and others are expected to follow.

Mahmud Hasan Khan Babu, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told TBS, "We have already started preparing to use 30% renewable energy in line with EU requirements. Many of our factories have begun implementing green practices, including renewable energy."

He added that smaller and medium-sized factories are also being supported to meet these requirements in collaboration with the government.

Bangladesh has one of the highest numbers of green-certified factories by the US Green Building Council (USGBC), with nearly 300 such facilities.

However, Mustafizur Rahman noted that existing green factories do not fully meet all EU requirements, though this still represents significant progress.

The EU introduced CBAM in July 2021 to encourage exporters to reduce emissions and penalise those who do not. Initially, it applies to products such as cement, fertiliser and steel from January 2026. However, the EU plans to eventually include all imported goods by 2030.

Given that apparel accounts for more than four-fifths of Bangladesh's exports – and the EU takes more than half of those exports – this development is highly significant for the country.

Need to prioritise clean energy

The report stresses that Bangladesh must increase the use of clean energy in production to avoid potential carbon taxes in the EU market. It recommends a range of policy measures, including incentives for adopting green technologies.

Suggested steps include fiscal incentives such as reduced import duties on energy-efficient technologies, financial support like subsidised loans for setting up ETPs, and institutional measures such as enforcing emission-reduction policies and building technical capacity.

Other recommendations include developing a monitoring mechanism for CBAM, engaging with the World Trade Organization (WTO), introducing a domestic carbon pricing system, strengthening renewable energy policies, and ensuring that CBAM is not used as a protectionist trade tool.

The government is considering a strategic diesel allocation plan for the ready-made garment sector based on recommendations from trade bodies to ensure factory generators remain operational during periods of load-shedding.

The move comes amid a worsening global energy crisis triggered by the Iran war, which has driven up fuel and LNG prices and disrupted supply chains. Iran's move to halt tanker traffic through the Strait of Hormuz has further tightened global supply.

According to officials and industry sources, the proposed mechanism will allow factories to receive diesel strictly in line with certified daily requirements provided by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

Both organisations have already begun collecting data from member factories on generator capacity and fuel demand. In a letter issued on Sunday, the BGMEA asked its members to submit details of generator usage, capacity and diesel requirements by 2 April, while the BKMEA issued a similar request.

BGMEA President Mahmud Hasan Khan said factories rely on standby generators during power outages, which require a steady diesel supply. He noted that discussions with the government are under way to ensure equitable fuel distribution during the ongoing global crisis.

He added that, under an initial plan, diesel allocation would be based on the amount required to run generators for up to four hours a day, as extended load-shedding beyond that duration is not anticipated.

BKMEA President Mohammad Hatem said the association is gathering daily fuel demand data from its members and will issue certifications accordingly. He added that a meeting with the power and energy minister was scheduled for late yesterday to finalise the arrangement.

BKMEA Executive President Fazlee Shamim Ehsan said discussions have already taken place with the energy minister and local administrators in Narayanganj and Gazipur, with positive responses.

He expressed hope that fuel supply based on organisational recommendations would begin soon, depending on the evolving situation.

Under the proposed system, factories will be allowed to collect diesel once daily from nearby filling stations, which will supply fuel upon verification of BGMEA or BKMEA certification, sources said.

Data from the Bangladesh Petroleum Corporation indicate that the country consumes around 13,000 to 14,000 tonnes of diesel per day, with about 5% used by industrial factories. The bulk of diesel is consumed in transport, irrigation and power generation.

Bangladesh, which is heavily dependent on fuel imports from Middle Eastern countries such as Saudi Arabia and the United Arab Emirates, has not received crude oil shipments since the war started.

Imports of refined fuel and LNG – primarily sourced from countries including Qatar and Oman – have also been affected, with LNG prices nearly doubling.

Diesel remains critical for transport, agriculture, power generation and industrial operations, while LNG is widely used in electricity production and factory boilers. The ongoing global shortage has already begun to affect domestic supply, with consumers facing difficulties in obtaining fuel in line with demand, industry insiders said.

A rapid expansion of solar energy is essential to protect Bangladesh from escalating global fuel price shocks triggered by the Iran war, according to a new study.

The report by Lion City Advisory highlights how surging global energy prices have intensified pressure on Bangladesh's already strained power sector, exposing its heavy dependence on imported fossil fuels.

Within just four weeks, Brent crude prices jumped from $67 to over $100 per barrel, while liquefied natural gas (LNG) prices surged from $10 to $22.51 per MMBtu, the report noted.

As a result, Bangladesh's monthly import bill for oil, LNG and coal has increased by an estimated $760-830 million, with LNG alone adding $363-400 million in additional monthly costs.

Analysts warn that if elevated prices persist for more than six months, the country could face significant fiscal strain due to rising subsidy requirements.

Despite installed power capacity jumping from 5,245MW in 2005-06 to 28,919MW in 2026, around 63% of capacity remains idle. Yet, the government continues to pay around Tk38,000 crore annually in capacity payments – largely to oil-based plants – compounding financial stress.

With almost 87% of electricity still generated from fossil fuels, Bangladesh remains highly exposed to global commodity volatility.

Solar seen as fastest shield

The study identifies solar energy as the quickest and most scalable way to reduce this exposure, recommending nationwide adoption of Solar Home Systems (SHS), particularly in urban areas.

In Dhaka alone, nearly 3.5 million households rely on diesel generators, costing an estimated $530 million annually. Mandatory SHS adoption could significantly cut these expenses while reducing fuel imports and easing pressure on the national grid.

Rooftop solar also presents a major opportunity. Although the current installed capacity stands at around 245MW, the report suggests this could expand rapidly if policy barriers are removed.

"Solar is not just a climate solution – it is now a fiscal necessity," the report states, emphasising that solar power eliminates dependence on imported fuels and shields the economy from global price shocks.

Unlocking investment through policy reform

A key bottleneck remains the suspension of Implementation Agreements (IAs) for new solar independent power producers (IPPs), which has stalled more than 5,200 MW of planned projects.

Without IA-backed guarantees, developers cannot secure financing from global lenders such as the International Finance Corporation, the Asian Development Bank, and the Japan International Cooperation Agency.

The report urges immediate reinstatement of IAs for projects above 50MW, with fiscal safeguards. Unlike conventional IPPs, solar projects operate on an energy-payment model – meaning the government pays only for electricity actually generated, avoiding the costly capacity payments that currently burden the system.

Tariffs offered by solar developers – around $0.08/kWh – are described as globally competitive and cheaper than oil-based generation.

Cutting costs at source

Beyond solar expansion, the report outlines immediate steps to reduce system costs.

One major recommendation is the removal of import duties on solar equipment, currently ranging from 14-28%, which could lower project costs by up to 20%.

It also calls for simplifying net metering approvals – currently taking up to 90 days – through a 30-day automatic approval mechanism, alongside penalties for utility delays.

At the same time, renegotiating and gradually retiring expensive HFO and diesel-based plants could save around Tk18,000 crore annually, with funds redirected toward renewable energy investments.

Efficiency gains and gas supply concerns

Industrial energy efficiency is identified as another immediate opportunity. Waste heat recovery systems in factories could save around 50 billion cubic feet of gas annually – equivalent to $1.13 billion in LNG imports at current prices.

Describing this as "effectively free LNG," the report says such measures can provide short-term relief while renewable capacity is expanded.

The study also notes a decline in domestic gas production – from around 2,700 MMcfd in 2018 to 1,700 MMcfd in 2026 – urging an emergency drilling programme by Bangladesh Petroleum Exploration and Production Company Limited to accelerate the completion of 34 planned wells.

However, it cautions that gas alone cannot resolve the crisis and recommends prioritising domestic gas for high-value sectors such as fertiliser, while shifting power generation towards solar energy.

Long-term resilience

The report proposes allocating 50,000 acres of marginal land for solar parks and expanding solar irrigation to replace almost 1.5 million diesel pumps that currently consume around $1.5 billion annually.

It also calls for reforms in green financing, including simplifying Bangladesh Bank's approval process to enable faster, low-cost funding for renewable projects.

Underlying all recommendations is a clear message: Bangladesh must move away from a fuel-import-driven power system toward one based on domestic, renewable energy.

"The current crisis is a warning," the report concludes. "Solar energy, backed by policy reform and investment certainty, offers Bangladesh the most viable path to reduce price exposure, stabilise subsidies, and secure long-term energy independence."

Overseas credit card spending by Bangladeshis declined by 5.74%, falling to Tk463 crore in January from Tk491.2 crore the previous month, according to the latest report of the Bangladesh Bank.

However, Bangladeshis spent the highest amount using credit cards in Thailand in January 2026, totalling Tk69.4 crore, reveals it.

The central bank's report titled "An Overview of Card Usage Patterns Within and Outside Bangladesh" showed that spending in Thailand increased from Tk64.9 crore in December.

After Thailand, the United States was the second most popular destination, where spending stood at Tk67.5 crore in January, slightly down from Tk68.2 crore in December.

The United Kingdom ranked third with Tk38.4 crore in spending, also decreasing from Tk44.4 crore a month earlier.

Spending in Singapore rose slightly to Tk38.3 crore while expenses in India dropped significantly to Tk28.5 crore from Tk35.1 crore in December.

According to the report, India had been the top destination for Bangladeshi credit card spending until August 2024. However, stricter visa policies have reduced travel to India, shifting spending to other countries.

The report also showed debit card usage abroad, with the UK, US, China and India topping the list.

Bangladesh’s pharmaceutical industry is facing mounting pressure as the ongoing US-Israel war on Iran disrupts global supply chains, threatening the availability of raw materials, pushing up freight costs and raising concerns over production stability.

The issue was highlighted at the inaugural session of the 17th Asia Pharma Expo 2026 and Asia Lab Expo 2026, held at the Bangladesh-China Friendship Exhibition Center in Dhaka’s Purbachal yesterday.

Health Minister Sardar Md Sakhawat Hossain, who inaugurated the three-day exposition as the chief guest, said the government is closely monitoring the evolving situation and stressed that ensuring access to quality medicines remains a top priority.

He also reiterated a zero-tolerance stance on corruption and irregularities in the sector.

Industry leaders said the Gulf region unrest has already started to affect the import of active pharmaceutical ingredients (APIs) and other essential inputs, many of which rely on complex shipping routes through the Middle East.

“The war has disrupted logistics, increased freight costs and caused shipment delays,” said Abdul Muktadir, president of the Bangladesh Association of Pharmaceutical Industries (BAPI).

“Rerouting of sea and air cargo is making imports more expensive and unpredictable.”

The disruption is particularly significant for Bangladesh, which remains heavily dependent on imported raw materials despite its strong domestic manufacturing base. Prolonged instability could drive up production costs and put pressure on medicine prices in the coming months, industry insiders said.

According to BAPI, the industry now meets nearly 98 percent of domestic demand and exports medicines to more than 120 countries, reflecting steady expansion over the past decade.

Bangladesh currently exports around $300 million worth of medicines annually and is emerging as a growing player in the global pharmaceutical market.

However, sustaining this momentum will depend on the sector’s ability to navigate external shocks and ensure an uninterrupted supply of inputs.

Muktadir stressed the urgency of accelerating the development of a domestic API industry to reduce reliance on imports.

“The current situation highlights our vulnerability. Policy support is essential to strengthen local capacity,” he said.

He warned that if the conflict persists, rising freight costs and supply uncertainties could erode profit margins and disrupt production cycles, with smaller manufacturers likely to face greater pressure.

Despite the challenges, Bangladesh has so far managed to keep medicine prices relatively lower than in neighbouring countries, supported by strong local production and regulatory oversight, he added.

Md Shameem Haidar, director general of the Directorate General of Drug Administration, said the industry continues to maintain quality and effectiveness, although global disruptions pose new risks.

Industry insiders estimate the market size has already exceeded $3.5 billion, which could surpass $6 billion by 2026, driven by annual growth of 15 to 18 percent.

However, they cautioned that geopolitical tensions could test the sector’s resilience in the near term.

The country’s merchandised shipments of processed foods and agricultural products to Gulf nations are facing a serious shock from the war in the Middle East, with freight charges soaring fourfold and new orders plunging.

Before the US and Israel launched the war on Iran on February 28, sending a container of processed foods cost around $1,500. Manufacturers say rerouting has now pushed the price to roughly $6,500.

“Besides, the volume of orders from Middle Eastern markets has declined by around 40 percent compared to pre-war levels,” said Ahsan Khan Chowdhury, chairman and chief executive officer of PRAN-RFL Group.

Bangladesh exports a wide range of products to the Gulf, including spices, biscuits, puffed rice, chanachur, noodles, mustard oil, beverages and other snacks. The main customers are Bangladeshi migrant workers in the region and members of the diaspora.

Official data puts the size of the market at more than $100 million. Major destinations include Saudi Arabia, the United Arab Emirates, Oman, Qatar, Kuwait and Bahrain.

Chowdhury, the CEO of PRAN-RFL Group, one of the largest food and beverage brands in Bangladesh, said shipments to Middle Eastern countries were previously routed through five to six ports.

“But after the Strait of Hormuz was closed and other ports came under retaliatory attacks, exporters were left with only Jeddah port operational,” he said. “This pressure on the Saudi Arabian port on the Red Sea has largely contributed to the rise in freight charges.”

Apart from these issues, he added that sending products to Middle Eastern markets now takes longer.

“Although factory production has not yet been affected, if the current situation persists, a reduction in production will likely become unavoidable in the near future,” he commented.

Rezaul Hoque Khondaker, manager for international marketing at local food processor Bombay Sweets and Company Limited, said the company suspended Middle East orders and halted production in late February, anticipating further escalation after the attack on Iran.

“At that time, only one shipment had already left Chattogram via Colombo for Qatar, and recalling it was not viable,” he said. “Despite shrinking margins, we proceeded with delivery to minimise losses and sought partial compensation from importers.”

Sayedul Azhar Sarwar, head of business at Danish Foods Ltd, a concern of Partex Star Group, said rising freight rates have introduced a new “war cost” that is significantly increasing overall expenses.

“Importers are increasingly reluctant to accept deliveries as higher costs erode competitiveness, particularly for goods already in transit,” he said.

He estimated that overall costs have risen by at least 15 percent, prompting many buyers to delay orders in the hope of more stable conditions.

He also said that job uncertainty among migrant workers is beginning to affect consumption, which could dampen demand for non-essential food items.

Luthful Kabir Shaheen, director for business development at City Group, said shipment schedules had become increasingly unpredictable, causing delays not only in the Middle East but also in Europe and the US, with transit times extending by around 10 days.

He, however, said production remains broadly stable, with companies adapting by routing goods through alternative Gulf hubs such as Dubai. “Despite steady demand for essential food items, the export process has become more complex, requiring greater operational flexibility.”

Similar to City Group, Sameera Rahman, head of export at Meghna Group of Industries, said their output for Middle Eastern markets remains steady.

“Our manufacturing operations are fully functional, supported by coordinated supply chains and careful resource planning,” she said. “But logistics remain under strain.”

She added that many shipping lines have paused new bookings and cancelled existing ones, disrupting dispatch schedules, while rising risk premiums were further driving up costs.

“War risk surcharges have nearly doubled freight costs on some routes, including shipments to Oman,” added Rahman.

According to the Export Promotion Bureau (EPB), processed food exports to the Middle East stand at $40-$45 million annually, while the broader agricultural sector earned $65.24 million in the fiscal year 2024-25.

Sixty-six World Trade Organization (WTO) member countries, representing 70 percent of global trade, have adopted a pathway to bring into force electronic commerce (e-Commerce) agreement through interim arrangements.

The adoption to bring the agreement into force via interim arrangements took place on March 28 at the 14th WTO Ministerial Conference (MC14) in Yaoundé, Cameroon.

Bangladesh has yet to officially clarify its stance, with Commerce Minister Khandakar Abdul Muktadir saying nations attending the summit offered varying opinions. While some favoured a four-year extension of the moratorium and others two years, very few sought a permanent moratorium.

Bangladesh has not spoken on this issue yet, he added.

Under the interim mechanism, participating members will begin applying the rules among themselves once 45 of the 66 signatories ratify the deal.

“This step marks a significant milestone. With digital transactions accounting for over 60 percent of global Gross Domestic Product (GDP), there is an urgent need to implement global digital trade rules that allow businesses and consumers to seize the benefits of digital trade,” the WTO said in a joint statement.

The agreement encourages legal frameworks that recognise electronic transactions and treat electronic and paper-based information as legal equivalents.

It also seeks to establish common principles for the interoperability of e-invoicing and the legal recognition of electronic transferable records, such as bills of lading and promissory notes.

Data from the WTO and the Organisation for Economic Co-operation and Development suggest that failing to implement the agreement leaves approximately $159 billion worth of trade “on the table” annually. If implemented globally, the pact could boost global GDP by $8.7 trillion by 2040.

Major economies that have accepted the interim agreement include Singapore, Australia, Japan, the European Union, Canada, and China.

“By moving forward with the E-Commerce Agreement, participating economies are helping to establish a shared regulatory framework that can lower costs and unlock new opportunities,” WTO Director-General Ngozi Okonjo-Iweala said in the statement.

The agreement is not applicable to Bangladesh as the country remains in favour of continuing the long-standing moratorium on imposing customs duties on electronic transmissions, said Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue (CPD), who is attending the conference.

“It means only the signatory countries will apply the agreement among themselves. Non-signatory countries like Bangladesh will continue to enjoy the moratorium until the agreement is adopted by the majority of WTO members,” he said.

Rahman said Bangladesh should cautiously observe the development before making a decision, adding that with the massive digitalisation of global trade, a significant volume of transactions now occurs digitally.

As a major importer and exporter of commodities and services, the withdrawal of the e-commerce moratorium could increase business costs for Bangladesh, he said.

The issue of electronic commerce was first raised at the Second Ministerial Conference in 1998, where members adopted a declaration to not impose tariffs on digital transmissions. At the 13th Ministerial Conference in Abu Dhabi in 2024, members had agreed to maintain the moratorium until MC14 or March 31, 2026.

Bangladesh’s exports have become a powerhouse for its economy, increasing by some $10 billion over the last six years. But when it comes to its immediate South Asian neighbours, the outward trade has remained trapped in a narrow range, failing to grow by even a billion dollars throughout.

Total global export earnings reached $43.6 billion in fiscal year 2024-25 (FY25), up from $33 billion six years ago, Bangladesh Bank (BB) data shows.

Meanwhile, exports to seven member countries of the South Asian Association for Regional Cooperation (Saarc) stood at just $1.9 billion in FY25, a mere 4.4 percent of the total. The figure was $1.4 billion in FY19.

A recent report by the central bank on the country’s economic engagement points out that while Bangladesh’s relationships with major partners in the European Union, the United States and the Middle East are well documented, “its economic linkages within Saarc remain surprisingly underexplored yet vitally important.”

Experts identify persistent non-tariff barriers, limited connectivity, logistical bottlenecks and weak regional cooperation frameworks as major constraints to expansion.

ONE MARKET, ONE BASKET

Even within Saarc, the trade is heavily concentrated, with India alone absorbing nearly 89 percent of Bangladesh’s regional exports, making the bloc effectively a one-market story.

Pakistan, Sri Lanka, Nepal and Bhutan remain peripheral, their combined share too thin to move the needle. While exports to Pakistan and Sri Lanka have shown some improvement, their scale remains too small to shift the overall trajectory. Nepal, meanwhile, has seen declining exports.

The concentration poses a huge risk – any policy shift or demand shock in New Delhi ripples immediately through Bangladesh’s entire regional trade position.

The export basket is equally narrow, dominated by ready-made garments, pharmaceuticals and leather goods.

The central bank notes that this lack of diversification limits growth prospects, especially in markets where production structures are similar and competition is high. Unlike Bangladesh’s global trade, which has gradually moved into higher-value segments, regional exports have seen little structural transformation.

The limitations of regional exports are also evident in the widening trade imbalance. Bangladesh bought $10.5 billion worth of goods from Saarc nations last fiscal year, more than five times what it sold, yielding a trade deficit of $8.6 billion.

India supplied over 90 percent of those imports, covering essential commodities and industrial inputs. Bangladesh is far more integrated with its neighbourhood as a buyer than as a seller.

THE ROADS NOT TAKEN

Policy experts point to infrastructure as the primary constraint. Except for India, Bangladesh has no direct land links with its South Asian neighbours, pointed out Khandker Golam Moazzem of the Centre for Policy Dialogue (CPD). This makes trade with the neighbours less lucrative.

For instance, he said, “Exporting to Hong Kong can sometimes cost less than trading with India, a reflection of poor logistics, inadequate land ports and inefficient customs systems.”

Outdated Safta (South Asian Free Trade Area) negative lists and persistent non-tariff barriers add further friction, he added.

Moazzem stressed the need for improved port facilities, modernised land ports and digitalised one-stop border services. He also highlighted the importance of sub-regional initiatives like BBIN and BIMSTEC to enhance connectivity through India.

Ahsan Khan Chowdhury, chairman of Pran-RFL Group, which exports nearly $100 million annually to India, identified demand mapping in each market as a prerequisite for expansion. “Saarc countries hold significant trade potential, but identifying demand in each market remains crucial for expansion.”

He flagged the “northeastern Indian states as a particular opportunity” for Bangladesh, while noting that trade became harder to sustain during the interim government period due to strained bilateral ties.

Chowdhury also called for upgrading Bangladesh’s standards testing infrastructure to meet Indian requirements and proposed an ASEAN-style duty-free framework for the bloc.

At the same time, he emphasised the need to negotiate with India to reduce trade barriers and improve port efficiency.

The contrast with ASEAN (Association of Southeast Asian Nations) -- which has built integrated regional value chains sustaining high intra-regional volumes – illustrates the scale of South Asia’s failure to deepen economic ties.

Sub-regional frameworks such as Bangladesh-Bhutan-India-Nepal (BBIN) initiative and Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (Bimstec) offer a partial path forward, but analysts say physical connectivity remains the essential precondition for any meaningful expansion.

Economists have urged the government to adopt a conservative approach in preparing the upcoming budget for the next fiscal year, taking into consideration the impact of the US-Israel war on Iran, implementing electoral pledges, and boosting investment.

The call came at the first pre-budget meeting with Finance Minister Amir Khosru Mahmud Chowdhury and senior officials of other relevant government agencies at the state guest house Padma on Saturday night.

Among the economists, Salehuddin Ahmed, former finance adviser to the interim government, Debapriya Bhattacharya, distinguished fellow of Centre for Policy Dialogue (CPD), Fahmida Khatun, executive director of CPD, Selim Raihan, executive director of the South Asian Network on Economic Modelling (Sanem), and Zakir Ahmed Khan, former finance secretary, were present.

Speaking to The Daily Star, they noted that the first budget of the new government is crucial, as it will set the trajectory for how the economy will be managed over the next five years.

While Bangladesh’s budget preparation process typically begins in August-September, they said this budget should not be a routine exercise. Instead, it must reflect electoral commitments, prevailing global and domestic challenges, and long-term economic goals.

The economist pointed out that ongoing geopolitical tensions in the Middle East could exert multifaceted pressure on Bangladesh’s economy.

Volatility in global oil markets may drive up import costs, while the risk of supply disruptions remains. This could increase the burden of fuel subsidies, posing a significant challenge to budget implementation.

At the same time, remittance inflows may face headwinds if employment opportunities shrink or incomes decline for migrant workers in the region.

Against this backdrop, several economists underscored that there is little room for overly optimistic assumptions in budget planning. Instead, expenditure frameworks must reflect realistic revenue mobilisation capacity, pressures on foreign exchange reserves and inflation risks.

According to meeting sources, the finance minister brought up long-standing concerns over lack of transparency, cost overrun, and project selection and implementation during the meeting.

He sought suggestions regarding these concerns from the economists.

Economists, in response, suggested including a low number of projects in the budget to ensure smooth implementation.

They also stressed the need to strengthen, streamline and ensure accountability in the formulation of the Annual Development Programme (ADP).

Without addressing these weaknesses, they cautioned, the effectiveness of public investment will remain limited.

No move should be taken to reduce the policy rate at this stage, most economists suggested, as inflation remains high and could intensify further with rising energy and import costs.

Sharing his experience as adviser of the previous interim government, Salehuddin Ahmed stressed that balancing political commitments with economic realities remains a key challenge. He suggested continuing the reform initiatives.

Referring to family cards and expanded safety net schemes, economists suggested streamlining the existing social safety net programmes alongside those electoral promises.

They also called for prioritising restoring confidence in the private sector, stressing the need for improving the investment climate, ensuring policy continuity and reducing administrative bottlenecks.

In the current uncertain environment, investors remain cautious, making it crucial for the government to provide clear and credible policy signals, they noted.

Tax reform featured prominently in the discussion. Structural weaknesses in the National Board of Revenue (NBR), limited tax collection capacity and persistent tax evasion were identified as major concerns.

Economists stressed that expanding the tax base and undertaking administrative reforms are essential for improving revenue mobilisation. They also called for modernisation, greater automation and enhanced accountability within the NBR.

Rashed Al Mahmud Titumir, economic adviser to the prime minister, Md Mostaqur Rahman, governor of Bangladesh Bank, and Md Khairuzzaman Mozumder, secretary of the Finance Division, Monzur Ahmed, member of the General Economic Division of the Planning Commission, Nazma Mobarek, secretary of the Financial Institutions Division, and AK Enamul Haque, director general of Bangladesh Institute of Development Studies (BIDS), were also present at the meeting.

Bangladesh can absorb the economic shocks stemming from the ongoing Middle East war for the next few months, as it holds adequate foreign exchange reserves to meet rising import bills despite higher energy prices, central bank governor Md Mostaqur Rahman said today (29 March).

In a view-exchange meeting with senior journalists, the newly appointed governor expressed cautious confidence in the country's external position.

He, however, maintained a firm stance on monetary policy, stating that cutting interest rates would be "unwise" at this stage due to persistently high inflation, prioritising price stability over short-term growth.

The governor also pledged to keep the financial sector free from political influence and to strengthen rural economic activities as part of broader efforts to stabilise the economy.

Deputy governors echoed similar views at the meeting. Deputy Governor Md Kabir Ahmed said Bangladesh's gross foreign exchange reserves currently stand at around $35 billion, sufficient to cover several months of import payments.

"Moreover, the Bangladesh Bank expects about $1.5 billion in loan disbursements from the International Monetary Fund by June and is working to secure another $2 billion credit line to ease pressure on the balance of payments," he said.

BB governor holds talks with IMF on advancing loan programme

The governor said the government is seeking cheaper fuel through bilateral deals or direct grants from leading oil exporters. Consequently, the prime minister's foreign affairs adviser is visiting various nations to negotiate these terms.

Furthermore, the Economic Relations Division (ERD) has finalised a $1 billion budget support package from the Asian Development Bank (ADB), said the governor.

However, senior executives at the central bank fear that a prolonged war could trigger significant economic risks and inflationary pressures.

Deputy Governor Habibur Rahman noted that with crude oil prices having now nearly doubled, import costs are expected to rise proportionately.

"In this regard, if the safety of Bangladeshi vessels navigating the Strait of Hormuz can be guaranteed, it will be possible to reduce these additional costs," he said.

The governor, however, said the fuel imports Bangladesh procures under long-term G2G (government-to-government) agreements are sourced at the rates specified in those contracts. He added that the government's efforts are ongoing to ensure that these essential supplies continue uninterrupted.

Bangladesh Bank spokesperson Arief Hossain said a significant number of migrant workers in the Middle East risk losing their jobs and are returning home, raising concerns about a decline in remittances.

He also said, "If the IMF imposes conditions on the government to eliminate fuel subsidies, Bangladesh will have to comply. In such a scenario, inflation could surge significantly."

BB pauses dollar purchase to avoid exchange rate volatility as Iran war fallout looms

Bangladesh Bank officials noted that despite these stringent conditions, failing to secure the IMF loan would jeopardise the country's ability to obtain further credit from the World Bank and the ADB.

Deputy Governor Zakir Hossain Chowdhury said if international fuel oil prices continue to rise over a prolonged period, it will create additional subsidy pressure on the government.

Deputy Governor Kabir Ahmed said he anticipates that import demand would remain subdued this monsoon as well, which will play a vital role in maintaining the stability of both the reserves and the exchange rate.

Highlighting the priorities of the Bangladesh Bank, the governor said ensuring that the financial sector remains free from political influence is the top priority.

"The second priority is the recovery of stolen assets, for which meetings are being held every few days. Most banks have already signed non-disclosure agreements, and the remaining ones are expected to follow suit," he said.

The governor noted that unless GDP growth reaches 5% or higher, it will be difficult to attract foreign investment. To generate employment, the disbursement of loans from a Tk600 crore startup fund is set to commence this coming June, he said.

Furthermore, steps will be taken to stimulate demand in rural areas to keep the economy dynamic through increased domestic consumption, said the governor.

Lending banks have also been instructed to take the necessary measures to reopen factories that were closed either during or before the tenure of the interim government, he said.

The governor said, "We are working to decentralise Bangladesh's banking sector; specifically, banks will be instructed to increase loan disbursements towards agri-based industries and agri-technology.

"We are also considering the formation of a subsidy fund for the SME sector. Our reserves are currently in a safe zone, and we do not intend to see any significant depreciation of the exchange rate."

Stating that there is no scope to retreat from the establishment of the Sammilito Islami Bank, the governor affirmed that its operations will be expedited. "The chairman and managing director will be appointed soon, and I am adamant that this new bank remains entirely free from any political influence," he added.

Noting that the Bangladesh Bank held a meeting with the country's leading industrial conglomerates last Wednesday to understand their challenges, the governor stated that any issues pertaining to the central bank would be resolved.

The governor announced that a single, standardised QR code for all financial transactions will be established across the country by 30 June. "The use of this Bangla QR will become mandatory from 1 July."

He added, "This initiative aims to accelerate cashless transactions, which in turn will play a vital role in boosting revenue collection."

Commerce Minister Khandakar Abdul Muktadir has urged the continuation of special support measures for a defined period after countries graduate from the Least Developed Country (LDC) category to help maintain economic stability.

Speaking on the third day of the ongoing WTO Ministerial Conference, the minister participated in various thematic sessions and emphasised Bangladesh's position on key global trade issues, including WTO reforms.

He also called for the adoption of an LDC graduation-related package at MC14 to support countries like Bangladesh in the post-graduation phase.

Muktadir stressed the importance of ensuring an effective, predictable, and rules-based dispute settlement system, called for the prompt restoration of a fully functional two-tier dispute settlement mechanism, including the revival of the Appellate Body, noting that a strong and impartial system is essential to safeguard the interests of developing and LDC countries.

On fisheries subsidies, the minister highlighted that Bangladesh's contribution to harmful subsidies is close to zero, while major fishing nations account for the bulk, urged stricter discipline on harmful subsidies alongside ensuring Special and Differential Treatment (S&DT) for developing and LDC countries.

He also called for full exemption for small-scale and marginal fishers to ensure fairness and sustainability.

At the conference, Bangladesh announced its accession as the 129th member to the Investment Facilitation for Development Agreement, marking its first participation in a plurilateral agreement under the WTO framework.

The minister expressed hope that this move would improve Bangladesh's investment climate and send a positive signal to foreign investors.

The step was welcomed by several partners, including the European Union, Japan, Korea, the United Kingdom, and Hong Kong.

On agriculture, Muktadir underscored the sector's critical role in ensuring food security, livelihoods, and poverty reduction, called for the swift resolution of long-standing issues such as public stockholding, special safeguard mechanisms, and trade-distorting subsidies by developed countries. He reiterated that S&DT must remain central to agricultural negotiations.

Reaffirming Bangladesh's strong support for the LDC package, the minister emphasized the importance of a smooth and sustainable transition, said special benefits should continue for a specified period after graduation to help maintain economic stability and urged adoption of the package at MC14.

Bangladesh also supported extending the moratorium on non-violation and situation complaints (NVSCs) under the TRIPS Agreement until the next ministerial conference. The minister noted that such complaints could undermine policy space for developing countries, particularly in areas like public health and education, and called for a permanent solution.

He further said WTO reform efforts must be grounded in its core principles of transparency, inclusiveness, and fairness, adding that adherence to these values would help preserve trust and credibility in the multilateral trading system.

The minister reaffirmed Bangladesh's commitment to a fair, inclusive, and development-oriented multilateral trading system, expressing hope that MC14 outcomes would guide future reforms while ensuring the interests of developing and LDC countries are protected.

Bank Asia PLC, a listed private bank, is set to acquire the Bangladesh operations of Bank Alfalah in a deal valued at Tk 580 crore, equivalent to approximately $47.5 million.

According to a disclosure published by Bank Alfalah at the Pakistan Stock Exchange, the decision was approved by 96.5 percent of its shareholders at the annual general meeting held on March 26.

The acquisition is contingent upon approval from the Bangladesh Bank, the State Bank of Pakistan, and other relevant regulatory bodies, as well as consent from Bank Asia’s shareholders. To this end, Bank Asia will hold an extraordinary general meeting on April 12.

In May last year, Bank Asia signed a memorandum of understanding (MoU) with Bank Alfalah to acquire its Bangladesh operations, subject to regulatory approval and completion of legal formalities.

The sale process began in April last year. Legal formalities for the transfer of assets and liabilities are still pending, while core banking system migration must also be aligned.

The audit and valuation of Bank Alfalah’s Bangladesh operations were conducted by PricewaterhouseCoopers (PwC) Bangladesh, a UK-based multinational tax, audit, and consulting firm.

Bank Asia, which began its journey in 1999, is a pioneer in agent banking services in Bangladesh. If the acquisition is completed, it will be the third such takeover by Bank Asia in its 26 years of operation.

In 2001, the bank acquired the operations of the Canada-based Bank of Nova Scotia in Dhaka -- the first of its kind in Bangladesh’s banking history, according to Bank Asia’s website. It later took over the Bangladesh operations of Muslim Commercial Bank Ltd, a renowned Pakistani bank.

Bank Alfalah is incorporated in Pakistan, with its main capital base coming from Abu Dhabi Investment Funds. Over 51 percent of its equity is held by the Abu Dhabi Royal Family. The bank began operations in Bangladesh in 2005 and currently has seven branches in the country.