The government needs to allocate more to education, health, and social protection in the upcoming budget, and ensure that the funds are properly utilised to create a better future for every child in the country, development specialists and donor agencies said yesterday.

Speaking at a roundtable, they pointed out that utilisation of development budgets in both sectors has hovered around 50 percent for at least two fiscal years. The discussion, regarding strengthening investment in social sectors in the upcoming budget, was jointly arranged by The Daily Star and Unicef with support from the European Union.

Md Ashiq Iqbal, social policy and economic specialist at Unicef, said in fiscal year 2024-25 (FY25), utilisation of the development budget of education was 47.4 percent while it was 9.8 percent in the health sector.

According to him, the underutilisation of funds pointed to significant room for efficiency gains. “Over 50 percent gain is possible for education and health within the existing envelope.”

But he stressed that efficiency alone would not close the gap, as overall investment remains critically low to begin with.

The social policy expert noted that Bangladesh’s spending on education is one of the lowest shares in the world -- just 1.5 percent of its GDP on education against a government target of 5 percent.

The gap between current and target investment is 70 percent, which has widened over the past decade, he added. “Significant budgetary steps are required to progressively reach the target.”

Health spending stands at 0.7 percent of GDP, also among the world’s lowest. “The same thing is happening in the social protection budget too.”

Iqbal depicted the consequences of the spending failure, citing child welfare data.

Some 6.5 percent of primary school-age children are out of school, he said, adding that attendance falls sharply after primary school while foundational skills improve but remain far too low. “Bangladesh’s primary education progress is in stagnation.”

The Unicef official also said, “serious” risks persist in public health.

Two in five children and one in 13 pregnant women show elevated blood lead levels. The neonatal mortality rate stands at 22 per 1,000. Nearly two-thirds of children aged 6 to 23 months live in food poverty, as social protection coverage shrank in recent times.

In fiscal year 2024-25 (FY25), utilisation of the development budget of education was 47.4 percent while it was 9.8 percent in the health sector
Iqbal welcomed the commitments made by the ruling BNP in its manifesto on education access and quality, child survival, and malnutrition.

He called for allocating at least 2 percent of GDP to quality and inclusive education of children, with increased funding for foundational learning and teacher development, and at least 1.5 percent of GDP for health, with ringfenced vaccine budgets and free medicine for the poor.

Prof Rashed Al Mahmud Titumir, finance adviser to the prime minister, said the government inherited an economy burdened with multiple problems, further aggravated by current global pressures.

He explained that with inflation persisting, the government could not adjust fuel prices and was instead focusing on proper utilisation of spending.

The official also said the government was moving toward a universal social protection system to eliminate inclusion errors, exclusion errors, and fragmentation with one card per family for service delivery.

In addition, he said, for the first time, farmers would also receive cards through scheduled banks, entitling them to multiple subsidies. The government hopes to reduce errors and create fiscal space through these initiatives.

The government was also focusing on transparency and accountability in spending, with budget implementation effectiveness and digitalisation of revenue collection among its priorities, Titumir added.

The PM’s adviser also flagged that conditions attached to loans taken by the previous government from the International Monetary Fund (IMF) were creating pressure that “may not be child-friendly or women-friendly”.

Criticising the United Nations for reportedly not speaking out on these issues, he called for better coordination and harmonisation in the intergovernmental organisation.

Rana Flowers, country representative of Unicef Bangladesh, said she recognised that the government inherited an economy where debt obligations are rising, and economic uncertainties came from the global arena.

She pointed out that the situation demands figuring out how to use limited resources efficiently.

The Unicef official urged the government to focus on improving capital development, child education and social protection.

Rasheda K Choudhury, executive director of the Campaign for Popular Education, said education spending should be treated as an investment in human capital.

“If we curb corruption, if we curb violence against women and if we curb drug addiction, it will free up substantial funds for social sectors,” she said, urging the government to actively court non-resident Bangladeshis for support.

Prof Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue, said the government needs to prioritise its spending and draw up plans to adjust investment in the social sectors.

Gitanjali Singh, country representative of UN Women, called for higher social sector allocations alongside a tracking system to ensure expenditure efficiency.

She also urged the government to raise tax revenue and shift toward progressive taxation, given the constraints on fiscal space.

Prof Abu Eusuf, executive director of Research and Policy Integration for Development (RAPID), called on authorities to publish the actual education budget by subtracting the technology budget from it, and urged the reinstatement of the child budget.

He also asked for the social protection budget to be broken down clearly, separating pension obligations from other programmes.

Furthermore, the policy expert proposed establishing eight top-class hospitals -- one per division -- so that people do not need to travel to Dhaka for specialised care.

On revenue, he noted that tax exemptions amount to 6 percent of GDP and urged the government to widen the tax base without pressuring existing taxpayers.

Mahfuz Anam, editor and publisher of the Daily Star, said he has been covering child issues for many years as a journalist, and the same stories keep recurring.

While the country has made some advances, it remains far from where it needs to be, he added, urging all to use the newspaper to improve child rights issues.

Kishower Amin, programme manager of Public Financial Management, said revenue reform was essential, including reform of the revenue board and full digitalisation of tax systems.

Without higher revenue collection, she said, increases in health and education spending would not be possible.

Mosammat Ayesha Akther, deputy director of the National Academy for Educational Management of the Ministry of Education, Shumon Sengupta, Country Director of Save the Children in Bangladesh, Lole Valentina Lucchese, programme manager of Social Protection of EUD, and Stanley Gwavuya, Chief-SPEAR of Unicef, also talked at the event.

Deposits in the country’s Islamic banking system rose 9.42 percent year-on-year to Tk 4.81 lakh crore at the end of December 2025, marking a rebound in shariah-based banks after years of irregularities and weak governance.

By the end of 2025, deposits with Islamic banking increased by Tk 41,434 crore compared with the corresponding quarter of 2024, according to the Bangladesh Bank (BB).

The trend over the past few years has been uneven. Deposits stood at Tk 4.09 lakh crore at the end of 2022 and rose to Tk 4.43 lakh crore by late 2023. They then slipped before regaining momentum through 2024.

Even so, the central bank said that some full-fledged Islamic banks remain under severe liquidity pressure, weighed down by persistent irregularities and poor accountability.

In the “Quarterly Report on Islamic Banking in Bangladesh”, the BB said that without good governance, the recovery will not last.

Islamic banks now hold 24.38 percent of total deposits across the banking sector and account for 29.10 percent of total investments, according to the report.

The number of deposit accounts in the Islamic banking system rose to 4.1 crore by the end of December 2025, from 4.04 crore a year earlier.

Of the total deposits, the 10 full-fledged Islamic banks held Tk 4.11 lakh crore, or 85.47 percent of the market share. Islamic branches of conventional banks held Tk 29,681 crore, while Islamic windows of regular banks held Tk 40,231 crore.

Among the full-fledged shariah-based lenders, Islami Bank Bangladesh PLC attracted the largest individual share of deposits at 37.44 percent, followed by Al-Arafah Islami Bank PLC at 10.41 percent and First Security Islami Bank PLC at 7.94 percent.

The BB report showed that investment by Islamic banks grew 9.55 percent year-on-year to Tk 5.25 lakh crore. This was equal to 29.10 percent of total loans and advances across the banking sector at the end of December 2025, according to the BB.

Large industries took the biggest slice at 40.18 percent of all Islamic bank investment, followed by trade and commerce at nearly 33 percent.

The central bank said the Islamic banking system has been playing a significant role in mobilising deposits and financing in various economic activities in Bangladesh.

However, the number of rural branches of full-fledged Islamic banks has not grown in line with demand. “They may focus more on expanding their outreach into rural areas,” it added.

The BB said Islamic banks may invest more in socially beneficial industries, particularly in agriculture and small businesses.

The central bank recommended that Islamic banks explore new customer bases in microfinance, support women entrepreneurs, and meet the financial needs of public agencies.

Oil prices jumped above $100 a barrel on Monday as the US Navy prepared to block ships from reaching Iran via the Strait of Hormuz, a move that could restrict Iranian oil exports, after Washington and Tehran failed to reach a deal to end the war.

Brent crude futures rose $6.71, or 7.05%, to $101.91 a barrel by 0104 GMT after settling 0.75% lower on Friday.

"The market is now largely back to conditions before the ceasefire, except now the US will block the remaining up to 2 million barrels per day Iranian-linked flows through the Strait of Hormuz as well," said Saul Kavonic, head of energy research at MST Marquee.

President Donald Trump said on Sunday the US Navy would start blockading the Strait of Hormuz, raising the stakes after marathon talks with Iran failed to reach a deal to end the war, jeopardising a fragile two-week ceasefire.

He added that the price of oil and gasoline may remain high through November's midterm elections, a rare acknowledgement of the potential political fallout from his decision to attack Iran six weeks ago.

US Central Command said US forces would begin implementing the blockade of all maritime traffic entering and exiting Iranian ports at 10 am ET (1400 GMT) on Monday.

It would be "enforced impartially against vessels of all nations entering or departing Iranian ports and coastal areas, including all Iranian ports on the Arabian Gulf and Gulf of Oman," a CENTCOM statement on X said.

US forces would not impede freedom of navigation for vessels transiting the Strait of Hormuz to and from non-Iranian ports, it added.

IG market analyst Tony Sycamore said the move would effectively choke off the flow of Iranian oil, forcing Tehran's allies and customers to apply the necessary pressure to get the waterway reopened.

Iran's Revolutionary Guards said on Sunday that any military vessels attempting to approach the Strait of Hormuz would be considered a violation of the two-week US ceasefire and be dealt with harshly and decisively.

Despite the stalemate, three supertankers fully laden with oil passed through the Strait of Hormuz on Saturday, shipping data showed. They appeared to be the first vessels to exit the Gulf since the ceasefire deal was struck last week.

Oil tankers are steering clear of the Strait of Hormuz ahead of the US blockade on Iran, shipping data on LSEG showed.

On Sunday, Saudi Arabia said it has restored full oil pumping capacity through the East-West pipeline to about 7 million barrels per day, days after providing an assessment of damage to its energy sector from attacks during the Iran conflict.

Treasury bill yields rose over the past week as increased government borrowing from banks, driven by mounting funding needs and weak revenue collection, put upward pressure on short-term interest rates.

According to data from the latest auction held today (12 April), yields on 91-day, 182-day and 364-day treasury bills increased by 31 to 33 basis points compared with the previous week. The yield on 91-day bills climbed to 10.16%, while 182-day bills rose to 10.33% and 364-day bills reached 10.39%.

A week earlier, on 6 April, yields stood at 9.85% for 91-day bills, 10.01% for 182-day bills and 10.08% for 364-day bills.

A senior official of a private bank said the rise in yields was primarily due to higher government borrowing from the banking system. "The government is facing a shortage of funds in its treasury, while revenue collection remains below target. As a result, it has increased its reliance on bank borrowing," he told TBS.

In addition to the regular auction calendar, the central bank conducted off-calendar auctions this month, raising Tk10,000 crore through 91-day treasury bills in two separate tenors to meet immediate funding requirements.

Treasury bill yields had previously crossed 11.5% before declining to below 10% in February this year, largely due to improved liquidity in the banking sector.

Economists attribute the renewed upward trend to increased government spending following the formation of a new administration after the national election, including expanded social support programmes.

A central bank official said treasury bill and bond yields are determined by the liquidity conditions in the banking system. "When liquidity supply in banks exceeds government demand, yields decline. Conversely, when demand for funds is higher, yields increase," the official explained.

Bankers noted that although the banking sector is not currently facing a liquidity shortage, the government's higher borrowing requirement has begun to push rates upward.

For the April to June quarter, the government plans to borrow Tk1,10,000 crore through treasury bills, including Tk44,000 crore in 91-day bills, Tk36,000 crore in 182-day bills and Tk30,000 crore in 364-day bills.

In addition, the government aims to raise Tk39,000 crore through treasury bonds to finance medium- and long-term needs.

Treasury bills are short-term government securities with maturities ranging from 91 to 364 days and are considered low-risk investments due to their fixed returns.

Treasury bonds, by contrast, are long-term instruments with maturities ranging from two to 20 years, through which the government raises funds for extended periods.

Mongla Port operations have come to a near standstill as lighter vessels responsible for unloading and transporting cargo from commercial ships are unable to operate due to a severe fuel shortage, leading to mounting financial losses for importers.

Owners of lighter vessels say most of their fleet is now idle due to the fuel crunch, disrupting cargo handling from mother vessels and delaying vessel turnaround time. As a result, importers are being forced to pay penalties for the extended stay of commercial ships at the port's outer anchorage.

They further said that since the outbreak of conflict in the Middle East, they have been unable to secure adequate fuel supplies from depots in Chattogram.

Vessel owners also complain that despite repeated appeals by the Lighter Vessel Owners' Association to the Ministry of Power, Energy and Mineral Resources, no effective remedial measures have been taken.

Sources say hundreds of empty lighter vessels have been anchored in the Pashur River in Mongla for several days. A similar situation has been observed in Rupsha and at Jetty no 4 and 5 in Khulna, where hundreds more vessels remain idle due to the fuel shortage.

Cargo from large mother vessels at the outer anchorage is usually transferred to lighter vessels and then transported via river routes to terminals in Dhaka, Narayanganj and other parts of the country. However, the fuel shortage has severely disrupted these operations.

Owner of MV Mimtaz lighter vessel Md Khokon said his vessel has been waiting for fuel for several days. "We are unable to get fuel from SK Enterprise as depot supplies are insufficient. This is the situation for all vessels," he said.

Mohammad Mamun, production officer at Seven Circle Cement in Rupsha, said delays in cargo unloading from commercial ships are causing significant financial losses.

"We are paying penalties of around $17,000 per day for each commercial vessel. Delays are increasing costs, and our plant is facing raw material shortages," he said.

Azadul Haque, AGM of Sheikh Cement Factory, said production has been completely halted due to the crisis. "Supply of raw materials is being disrupted and workers are sitting idle," he said.

HM Dulal, owner of Messrs Nuru and Sons, marine dealer and agent of Meghna Petroleum Limited in Mongla, said fuel demand has increased due to various government development activities, including river dredging and canal excavation, putting additional pressure on supply.

Engineer Prabir Hira, manager (operations) at Meghna Petroleum Limited in Mongla, said supply disruptions caused by the Iran conflict have affected fuel availability, and distribution is being carried out in line with government directives.

Despite no major surge in revenue collection, the government is planning a 50% increase in development spending in the upcoming 2026–27 fiscal year compared to the revised target of the current fiscal year.

To this end, the Ministry of Finance is set to allocate Tk3 lakh crore for the Annual Development Programme (ADP) in the upcoming budget, of which 1.90 lakh crore will come from government funds and around Tk1.10 lakh crore from foreign loans and grants, according to relevant officials.

In the current fiscal year, the government initially allocated Tk2.30 lakh crore for the ADP in the original budget. However, implementation fell short of expectations, leading to a downward revision to Tk2 lakh crore. Of this, Tk1.28 lakh crore was planned from domestic sources, while Tk72,000 crore was expected from external financing.

Data from the Implementation Monitoring and Evaluation Division (IMED) shows that, as of February, ministries and divisions have spent Tk59,130 crore, which is 30% of the revised total allocation.

The Local Government Division (LGD) is set to receive the highest allocation of Tk36,620, which is about 12.21% in the proposed Tk3 lakh crore ADP in the next fiscal year.

Roads Transport to get 2nd highest share; then Health

The Roads Transport and Highways Division (RTHD) is expected to secure the second-largest allocation at Tk32,903 crore, approximately 11% of total ADP allocation, according to preliminary estimates.

In a major shift, the Health Services Division's allocation is projected to rise sharply to Tk20,608 crore—more than six times higher than its revised allocation for the current fiscal year—lifting the sector from 15th to third position in the ADP ranking.

The Power Division is likely to receive the fourth-highest allocation of Tk19,186 crore, followed by the Ministry of Science and Technology with Tk17,366 crore.

Meanwhile, Tk16,848 crore is expected to be allocated to primary and mass education, while the Secondary and Higher Education Division may receive Tk13,836 crore.

Officials from the Planning Commission said emphasis has been placed on improving ADP implementation by aligning projects with medium-term resource availability, ensuring feasibility studies before approving large projects, strengthening project monitoring, and maximising the use of project loans.

Recommendations also include enhancing the capacity of project directors, improving financial management, and strengthening budget implementation monitoring systems.

Meanwhile, ADP implementation rates have shown a declining trend in recent years. From FY2021–22 to FY2024–25, the implementation rate fell to 67%, and based on spending trends in the first eight months of FY2025–26, it may remain below 80%.

However, during the July–February period of the current fiscal year, implementation progress stood at just 29.6%.

The Bangladesh Poultry Industries Association (BPIA) has urged the government to halve taxes on the poultry sector in the proposed 2026-27 national budget.

According to a budget proposal sent to the National Board of Revenue recently, BPIA said production costs in the poultry industry have nearly doubled over the past five years, putting significant pressure on farmers.

As expenses continue to outpace earnings, many are forced to shut down operations.

Mosharaf Hossain Chowdhury, president of BPIA, said that in the current fiscal year, corporate tax in the sector has been raised from 15 percent to 27.5 percent, advance income tax from 1 percent to 5 percent, and turnover tax from 0.6 percent to 1 percent.

Such high tax rates are unprecedented for food production sectors globally, he said, adding that the increases have driven up the cost of poultry feed and other essential inputs.

Chowdhury called for an immediate reduction of existing taxes and duties by half to ensure the safeguarding of small and medium-scale farmers and sustain industry growth.

Without such measures, it will be increasingly difficult for marginal farmers to survive, he said

The BPIA president also stressed the need to eliminate middlemen and extortion practices across the supply chain, from farms to retail egg markets.

In addition, he called for electricity subsidies, easier access to credit, and prioritising poultry farmers under government agricultural support programmes.

Md Safir Rahman, secretary general of the BPIA, said that without special incentives in the upcoming budget, investor interest in the poultry sector may decline, potentially slowing the emergence of new entrepreneurs.

Garment exports from Bangladesh to the United States fell 2.54 percent to $5.59 billion in the July-March period of the current fiscal year.

The US accounts for about 20 percent of the country’s total annual apparel exports.

Exports to the United Kingdom, the third-largest destination with a 12 percent market share, also dropped 1.61 percent to $3.30 billion during the period, according to data from the Export Promotion Bureau compiled by the Bangladesh Garment Manufacturers and Exporters Association, published yesterday.

Amid a volatile global supply chain, shipments to Canada edged down 0.26 percent to $961.34 million in July-March.

Exports to non-traditional markets declined sharply, falling 8.05 percent during the period.

Overall, readymade garment (RMG) exports stood at $28.58 billion in July-March, marking a 5.51 percent year-on-year decline.

Shipments to the European Union, which accounts for 49 percent of Bangladesh’s total apparel exports, also fell 6.99 percent to $14.02 billion, as per the data.

India has further ​raised a windfall tax on exports of ‌diesel and aviation turbine fuel it imposed last month to ensure adequate domestic supply.

In a government notification on ​Saturday, India’s finance ministry increased the tax ​on diesel exports to 55.5 rupees per litre from 21.5 rupees per litre, and on ​exports of aviation turbine fuel to 42 rupees ​per litre from 29.5 rupees per litre, effective immediately. India also last month cut excise duty on petrol and diesel by ​10 rupees ($0.11).

Separately, to control a rise in airfares, ​it has also capped a monthly increase in aviation turbine ‌fuel prices for domestic airlines at 25 percent in April. Jet fuel accounts for up to 40 percent of an airline’s expenses. Global oil prices have surged past $100 ​per barrel ​as the flow of oil through the Strait of Hormuz, which serves as a conduit ​for 40 percent of India’s crude oil ​imports, remains heavily restricted due to the US-Iran war.

India, which ranks among the top five refining nations globally and is ​also the world’s third-biggest oil ​importer and consumer, relies heavily on overseas supplies.

Bangladesh's tax authority is once again pledging to introduce a fully automated compliance monitoring system, this time with a deadline. The National Board of Revenue (NBR) says it aims to roll out a nationwide automated system by 2027 to curb widespread tax evasion and improve the country's declining tax-to-GDP ratio.

The move comes as revenue collection faces increasing pressure, with Bangladesh recording one of the lowest tax-to-GDP ratios in Asia. Despite more than a decade of efforts and significant spending on digitalisation, only limited portions of income tax, VAT, and customs services have been automated so far.

Senior NBR officials said the plan will begin by making existing online return filing and e-audit systems fully functional. This will be followed by the introduction of risk-based audits for both individual and corporate taxpayers within the year. The authority also plans to integrate real-time data with key institutions – including banks, land offices, and vehicle registration authorities – before launching the full monitoring system.

NBR Chairman Abdur Rahman Khan said, "While several tax services are already online, the next step is to link tax data with other government and financial databases. Once integrated, the system will be able to track transactions more efficiently and identify non-compliant taxpayers quickly."

However, the timeline has raised doubts among experts and former officials, who note that similar promises over the past 15 years have seen limited success. Large-scale projects funded by both domestic and foreign sources have failed to deliver the expected level of automation.

Former NBR chairman Muhammad Abdul Mazid believes full automation within a year is unrealistic. "Automation has been discussed since the 1990s, yet meaningful results remain limited," he said.

He also questioned whether there is sufficient internal support within the NBR for such a system, noting that both some officials and non-compliant businesses may lack incentives to embrace full transparency. He added that past projects often consumed time and funds on consultancy, logistics, and administration without producing tangible outcomes.

Mazid emphasised that while the 2027 deadline may be ambitious, the NBR must remain committed to implementation. He also stressed the need to bring all relevant institutions under digital systems to enable effective data sharing.

Bangladesh's tax-to-GDP ratio has declined from around 10% a decade ago to just 6.6% in the 2024-25 fiscal year – one of the lowest in Asia. Experts attribute this to tax evasion, widespread exemptions, and institutional inefficiencies.

There is no official estimate of revenue losses due to tax evasion, but a study by the Centre for Policy Dialogue suggests that losses exceeded Tk1.26 lakh crore in 2023.

Over the past decade and a half, the government has launched more than ten initiatives to automate tax administration, including online TIN registration, income tax returns, VAT systems, refund mechanisms, customs bond automation, and the National Single Window. However, many of these systems remain only partially functional. For instance, the online income tax system still relies partly on manual processes, while VAT automation and customs bond systems continue to face operational challenges.

Weak data integration

Stakeholders say resistance from some officials, frequent leadership changes at the NBR, and political transitions have slowed progress. Data integration with other institutions has also lagged, limiting the effectiveness of enforcement.

Currently, tax authorities must manually collect data from banks, land offices, city corporations, and utility providers, making it difficult to detect tax evasion at scale. Although there have been efforts to access banking data, lack of cooperation from financial institutions has hindered progress.

State-owned National Tubes Ltd, the country's only government-run steel pipe manufacturer listed on the stock exchanges, has reported a sharp decline in performance, with sales nearly halving in the first nine months of FY2025–26 amid weakening demand.

According to company disclosures approved by the board on Thursday, the firm's net sales dropped 50% year-on-year to Tk18.15 crore during the July–March period, down from Tk36.24 crore in the same period of the previous fiscal year.

The steep fall in revenue pushed the company into losses, reversing its profit trend from a year earlier.

National Tubes posted a net loss of Tk5.57 crore for the nine-month period, compared to a profit of Tk2.66 crore in July–March of FY25. Its loss per share stood at Tk1.60.

Operating cash flow also deteriorated significantly, with net operating cash flow per share falling to Tk0.17 as of March 2026, compared to Tk1.09 in the same period a year earlier.

The company's net asset value was recorded at Tk473 crore, according to its financial statements.

In the third quarter alone (January–March), National Tubes incurred a loss of Tk1.31 crore, a sharp reversal from a profit of Tk1.42 crore in the same quarter of the previous fiscal year. Quarterly revenue also declined by 40% to Tk8.12 crore from Tk13.51 crore a year earlier.

The company attributed the downturn to a broader fall in demand for steel pipes across key industrial and utility sectors.

National Tubes supplies pipes to major gas distribution and utility operators, including Titas Gas, Bakhrabad Gas Distribution Company, Jalalabad Gas Transmission and Distribution System, BAPEX, WASA, Fire Hydrant Company, and various manufacturing and real estate firms, according to its website.

Established in 1964 as a private-sector enterprise, National Tubes was nationalised in 1972 and placed under the Bangladesh Steel and Engineering Corporation (BSEC). It was later converted into a public limited company in 1989, with 49% of its shares offloaded to the general public.

City Bank PLC has reported a record-breaking financial performance for 2025, posting a consolidated net profit of Tk1,324 crore, which represents a robust 31% growth from the Tk1,014 crore recorded in the previous year.

The record profit was driven largely by a sharp rise in investment income from government securities.

Reflecting the strong earnings, the bank's board of directors has recommended a 30% dividend for 2025, comprising 15% cash and 15% stock, up from the previous year's 25% total dividend, which included 12.5% cash and 12.5% stock. The annual general meeting is scheduled for 7 June, while 3 May has been set as the record date, according to a disclosure filed on the bank's website.

The bank's latest financial disclosures reflect a remarkable turnaround over the past five years, with profits steadily climbing from Tk549 crore in 2021 to over Tk1,300 crore in 2025, underscoring its strengthening earnings base despite a challenging economic environment.

Its earnings per share rose in tandem with profitability, increasing by 31% to Tk8.71, while net asset value per share surged by 33% to Tk40.67. Its net operating cash flow per share stood at Tk47, indicating strong liquidity support for the bank's operations.

Despite the headline profit growth, the bank's core banking income faced pressure during the year. Its interest income from loans increased by around 22% to Tk5,471 crore, up from Tk4,501 crore a year earlier.

However, this growth was overshadowed by a much steeper rise in interest expenses on deposits, which surged by 71% to Tk5,186 crore. As a result, the bank's net interest income remained relatively modest at Tk285 crore, reflecting narrowing spreads amid rising funding costs.

The bank's record profit was instead powered by its non-core income streams, particularly investments in government Treasury bills and bonds. Income from treasury instruments more than doubled during the year, jumping 114% to Tk3,562 crore. Overall income from investments, fees, commissions, exchange, and brokerage activities reached Tk4,506 crore, significantly higher than the previous year's Tk1,661 crore.

This surge in investment income played a pivotal role in offsetting the pressure on traditional lending operations and helped push operating profit up by 16% to Tk2,727 crore from Tk2,351 crore in 2024.

City Bank's performance aligns with a broader trend in the banking sector, where several listed banks have reported record profits for the year despite subdued private sector credit growth.

Earlier, Prime Bank PLC and Shahjalal Islami Bank PLC also announced strong earnings, posting profits of Tk910 crore and Tk368 crore, respectively.

Market insiders said the banking sector faced weak demand for private sector loans in 2025 amid a sluggish business environment. As a result, many banks shifted their focus toward fixed-income instruments such as Treasury bills and government bonds, where yields rose to double-digit levels during the year.

This strategic reallocation of funds enabled banks like City Bank to capitalise on higher returns from relatively risk-free investments, compensating for the decline in traditional interest-based income. Analysts, however, caution that sustained reliance on such income sources may not be viable in the long run if interest rate conditions change.

Runner Automobiles Limited, a listed motorcycle manufacturer, is witnessing a continued divestment by its foreign investment partner, Brummer Frontier PE II (Mauritius) Limited.

In its latest move, the investment firm, a concern of Sweden-based Brummer & Partners, has declared its intention to sell 50 lakh shares of the company within a specified timeframe at prevailing market prices.

According to disclosures published on the Dhaka Stock Exchange, Brummer Frontier will dispose of the shares from its existing holdings through the market. Based on the current market price, the total value of these shares stands at around Tk20 crore.

However, this is not a new development. The share sale is part of the investor's long-term, phased exit strategy.

A transaction of this size has naturally had an impact on the market. In the short term, selling pressure weighed on the stock, leading to a 6.30% decline in its price. Yesterday, the share closed at Tk38.70 on the DSE.

Previously, on 27 April 2022, the investment firm had announced the sale of 1 crore shares from its holdings. At one point, Brummer Frontier held 24.93% of Runner Automobiles' total shares.

Currently, the investor holds 1,83,04,347 shares, representing around 16% of the company's total shareholding. The planned sale of 50 lakh shares will come from this remaining stake.

Speaking to The Business Standard, a top official of Runner Automobiles said that the decision to sell shares lies entirely with the board of the investment firm.

He explained that after the post-IPO lock-in period expired, Brummer Frontier obtained regulatory approval to sell its shares. Based on that approval, the firm has been gradually offloading its stake.

The official further noted that decisions regarding the timing and volume of share sales are determined solely by the investor's board, taking into account market conditions, share price, and internal investment strategies.

He also clarified that Runner Automobiles' management or board has no role in this matter, adding, "This is part of the investor's exit strategy and is not directly related to the company's operations or performance."

Brummer Frontier first invested in Runner Automobiles in 2013, injecting around Tk105 crore to acquire a significant stake. The objective was to accelerate the company's growth, strengthen corporate governance, and eventually secure a profitable exit.

Later, in 2019, Runner Automobiles was listed on the stock exchange through an initial public offering (IPO). While this opened up ownership to general investors, Brummer Frontier's shares were subject to a lock-in period. Following the expiry of that period, the investor began gradually reducing its stake.

There are several logical reasons behind Brummer Frontier's ongoing share sales, most of which are aligned with the typical lifecycle of private equity investments.

Firstly, private equity funds do not invest permanently. They aim to exit after a certain period by realising returns. Brummer Frontier's fund has now crossed a decade, making it necessary to return capital to its investors.

Secondly, during its tenure, Brummer Frontier contributed to significant improvements in Runner Automobiles, including enhancements in corporate governance, management structure, and environmental and safety standards. Having achieved these milestones, the firm is now in the phase of monetising its investment.

Thirdly, portfolio rebalancing is another key factor. Global investment funds frequently adjust their portfolios to explore new opportunities across sectors and geographies.

Meanwhile, Runner Automobiles has recently signed an agreement with Chinese electric vehicle manufacturer BYD Auto Industry Company.

However, the company has stated that the final investment size and potential financial impact under the Master Supply and Manufacturing Agreement (MSMA) have not yet been determined.

According to Runner, the MSMA serves as a framework for vehicle production under the Completely Knocked Down model, where components will be imported and assembled locally.

The company noted that a comprehensive feasibility assessment is currently underway. This includes determining the investment size, evaluating production capacity, analysing supply chain requirements, assessing market potential, and projecting revenues and costs.

However, no final commercial or financial terms have been established under the MSMA so far.

Inflation in the United States rose sharply in March, government data showed Friday, as higher energy prices due to the war in the Middle East hit Americans hard.

The nationwide sticker shock put pressure on President Donald Trump, who has ordered peace talks with Iran and faces mid-term elections in November.

The rate of inflation rose to 3.3 percent year-on-year in March, the US Bureau of Labor Statistics (BLS). By comparison, this same consumer price index (CPI) was 2.4 percent year-on-year a month earlier.

Gasoline prices surged by 21.2 percent between February and March -- the largest monthly increase since the government began publishing a related index in 1967, the US Bureau of Labor Statistics (BLS) said.

Markets had anticipated the surge, according to the consensus published by MarketWatch.

The United States and Israel began bombing Iran on February 28 and Tehran retaliated by blocking traffic in the Strait of Hormuz, a waterway used to carry a fifth of the world’s oil and gas deliveries.

Despite being the world’s top producer of crude oil, the United States also felt the pain, as prices at the gas pump shot up.

A gallon (3.78 liters) of regular gasoline currently costs an average of $4.15 in the United States, compared to approximately $3 just before the war.

The Trump administration -- elected in part on a promise to quash inflation -- maintains that the war’s economic disruptions will be temporary.

‘MORE PRICE PAIN AHEAD’

Reacting to the data, White House spokesperson Kush Desai said the US economy “remains on a solid trajectory.”

Economic advisor Kevin Hassett claimed some wins for the White House, citing drops in the price of eggs, beef and concert tickets on Fox News.

US Vice President JD Vance said he hoped for a “positive” outcome as he departed Washington for US-Iran peace talks in Pakistan this weekend.

But experts predicted more economic pain ahead due to the war in Iran, especially for middle and lower-income households already squeezed by rising energy and airfare prices.

Heather Long, chief economist at Navy Federal Credit Union, said that inflation soared in March to the highest level in almost two years.

“This is only the beginning. Food prices, travel and shipping costs are all going up in April and will exacerbate the pain,” she said.

“March CPI was as expected, so no surprises. But there is a huge increase in fuel prices, boosting inflation,” Christopher Low of FHN Financial told AFP.

“And we got the news last night that the ceasefire is not being honored by either side, apparently,” he said. “There’s still very little traffic through the Strait of Hormuz.”

Some economists calculate the oil price surge will cost each US household at least $350 per household.

Consumer sentiment also dipped sharply -- 11 percent -- this month, according to a University of Michigan survey.

During the Federal Reserve’s most recent meeting in mid-March, Chairman Jerome Powell said that the war risked delaying efforts to bring inflation under control in the United States.

The US central bank’s target for inflation is two percent -- an objective it has not met in five years due to the Covid pandemic, the war in Ukraine and tariffs.

AB Bank has made a decisive strategic shift toward micro, small and medium enterprises (MSMEs), moving away from its earlier concentration in large corporate lending, said Reazul Islam, acting managing director and CEO.

The move by the oldest private commercial bank of the country is a recalibration amid a weak economic environment marked by subdued private sector demand and geopolitical uncertainties, he told The Daily Star in a recent interview.

“Excessive concentration in large corporate exposures historically created vulnerabilities,” Islam said.

By distributing loans across a broader base of smaller borrowers, the bank aims to reduce systemic risk -- ensuring that isolated defaults do not significantly undermine overall stability.

“While corporate lending will continue, it will be more selective, with greater emphasis on supporting strong existing clients rather than pursuing aggressive expansion.”

Digital transformation sits at the heart of the bank’s new direction, according to Islam, a veteran banker with 29 years of experience in regulatory management, banking and professional services, who joined the bank in August 2024 as additional managing director.

He informed that AB Bank is developing fully branchless, digital loan processing systems and plans to introduce nano loans pending regulatory approval.

It is also deploying AI-based credit assessment tools and automated decision-making to minimise human intervention and move toward instant, paperless loan approvals via mobile platforms.

By leveraging alternative data sources, such as transaction behaviour and digital footprints, the bank aims to enhance credit scoring accuracy, reduce operational costs, and mitigate risk.

Over time, this digital lending framework is expected to expand beyond personal loans into SME financing, Islam said.

He acknowledged that the bank has lagged behind peers in agent banking and sub-branch reach, with 264 and 60 outlets respectively. “This was largely due to earlier strategic decisions and delayed entry into these segments.”

Both channels are now prioritised for deposit mobilisation and customer outreach, with new expansion targets set, though regulatory approvals remain a constraint.

Approaching 44 years since its founding in April 1982, it has faced repeated cycles of stress from the 1980s through the 2000s but demonstrated resilience by recovering from setbacks.

“This resilience has largely been driven by strong customer confidence, brand loyalty, institutional trust, and the commitment of its workforce,” says Islam.

The bank is currently navigating another difficult phase of high non-performing loans and mounting losses. Yet customers have continued to access their funds without disruption -- a factor Islam credits as critical to preserving confidence.

He says, “Liquidity management at the branch level remains relatively stable, and conditions have gradually improved.”

Islam notes that the deposit situation was particularly strained in 2024, when panic withdrawals amid broader sectoral uncertainty pushed liquidity under pressure. Total deposits fell roughly 9 percent that year to Tk 32,292 crore. The bank responded by ensuring uninterrupted cash availability and reinforcing employee confidence.

The effort paid off. Deposits recovered to Tk 34,465 crore by September 2025, with liquidity pressures easing and customer confidence gradually returning. Support from the central bank was instrumental during the peak of the crisis.

Islam, however, notes that structural challenges persist. Many loans have been rescheduled or placed under moratoriums, with repayment delays stretching up to two years -- meaning meaningful cash inflow improvements are unlikely before 2027-2028.

The bank has set targets to reduce NPLs by 20-25 percent in the near term and 30-40 percent over time, and has engaged international asset recovery firms to trace and reclaim overseas assets linked to defaulted loans.

“While this is a time-intensive process, early indications suggest some progress,” says the bank’s CEO.

On costs, the bank is targeting a 25 percent year-on-year reduction and has already achieved around 15 percent savings in recent quarters.

The private bank’s overall recovery plan spans three to five years -- from 2025 through 2027 and beyond -- and a longer-term vision extending up to a decade.

The timeline remains contingent on external economic conditions and policy support, but the direction is clearly focused on rebuilding stability and strengthening fundamentals.

Islam says the strategy is built around digital transformation, SME-focused lending, cost efficiency, deposit growth, and improved governance.

In terms of shareholder returns, he notes that the bank is not in a position to pay dividends in the near term due to its current financial condition.

Management remains focused on restoring profitability and operational stability before resuming dividend payments, he adds.

The managing director described the current board of the bank as professional and supportive, with decision-making processes aligned with management priorities.

While acknowledging that governance issues may have contributed to past challenges, he emphasised that ongoing reforms are focused on strengthening transparency, accountability, and professionalism.

Stocks at the Dhaka bourse ended flat last week amid the US-Iran ceasefire, rebounding from the previous week's losing streak.

During the week of 5-9 April, the benchmark index of the Dhaka Stock Exchange (DSE), DSEX, ended in the green, gaining 37 points and recovering from a 96-point loss in the previous week, according to data.

Turnover stood at Tk3,348 crore, while the daily average turnover increased by 0.20% to Tk669.6 crore. However, the prices of the majority of stocks declined amid sell-offs.

According to DSE weekly data, three of the five trading sessions ended positively, including a strong rebound in one session, with DSEX surging by 205 points in these sessions. Meanwhile, two sessions closed in the negative, weighing on the index by 168 points.

On 8 April, breaking a prolonged bearish spell since the onset of the war, Dhaka stocks rallied strongly, with turnover and indices surging after the US and Iran agreed to a conditional two-week ceasefire. DSEX rose by 3.12%, or 161 points, marking its highest single-day gain since 15 February.

As per the data, at the end of last week, DSEX closed at 5,257 points, while DS30, the blue-chip index, surged by 22 points to 2,002, and DSES, the shariah index, and increased by 3.6 points to 1,059.

Of the traded stocks, 138 advanced, 220 declined, 29 remained unchanged, and 24 were not traded.

EBL Securities, in its weekly market commentary, said the capital market exhibited mixed performance over the week as escalating tensions in the Middle East prompted investors to adopt a risk-averse stance and closely monitor unfolding developments.

"The week opened with broad-based sell-offs, fueled by panic reactions to newly announced government austerity measures aimed at addressing the country's potential energy crisis. As the week progressed, sentiment gradually improved.

"Bargain hunters moved in to accumulate oversold large-cap stocks following the government's decision to keep fuel prices unchanged and amid growing optimism over a potential US-Iran ceasefire. This shift in mood supported three consecutive sessions of market recovery," it said.

However, the optimism proved short-lived. Renewed uncertainties surrounding a lasting resolution to the conflict, along with concerns over a possible blockade of the Strait of Hormuz, weighed on investor confidence once again.

It said investors were mostly active in pharma sector stocks, which contributed 15.8% to total turnover, followed by engineering with 14.2% and bank sector stocks with 9.3%.

Sectors exhibited mixed returns, with tannery at 2.4%, bank at 1.7%, and paper at 1.7% being the top gainers, while mutual fund, life insurance, and travel sector stocks emerged as the top losers

The Bangladesh Bank has verbally cautioned several commercial banks against purchasing US dollars at elevated rates in a move to maintain stability in the foreign exchange market.

The matter was discussed during a meeting between the central bank governor, Md Mostaqur Rahman, and the Association of Bankers Bangladesh (ABB) held in the capital today (9 April).

A senior Bangladesh Bank official told TBS that the regulator had observed that some banks were purchasing dollars at excessive rates. "As a result, banks have been instructed to refrain from buying or selling dollars at inflated prices."
He added that the exchange rate would be determined by supply and demand, with no direct intervention by the central bank.

According to the official, the current supply of dollars remains strong, while banks are also maintaining a healthy net open position. In such a situation, purchasing dollars at higher rates could destabilise the market, prompting the central bank to advise strict compliance.

A senior official of a private bank said the Bangladesh Bank instructed banks to purchase remittance dollars from money exchange houses within Tk123.10. It also directed that interbank transactions should not exceed Tk122.75.

However, officials at several banks told this newspaper yesterday that they had purchased remittance dollars at Tk123 from exchange houses.

Bankers noted that interbank dollar transactions have declined over the past two days following the central bank's instruction to cap the rate at Tk122.75.

They explained that banks are reluctant to sell dollars at Tk122.75 in the interbank market after purchasing remittance at higher rates, which has contributed to reduced trading activity.

ABB seeks relaxation on bonus rules

During the meeting with the governor, the ABB called for a revision of a December 2025 circular that prohibits banks with capital or provision deficits from granting incentive bonuses to their employees. Bank representatives argued for a move away from this rule to ensure staff remained motivated.

According to a senior official, the governor expressed a willingness to consider a new circular. This could potentially allow banks with capital shortfalls to provide bonuses, provided they at least maintain their required provision levels.

Furthermore, the ABB demanded the removal of the current Tk15 lakh ceiling on annual bonuses for bank managing directors. Existing regulations mandate that an MD's bonus cannot exceed this limit and that no other bank official can receive a higher bonus than the MD.

ABB Chairman Mashrur Arefin said the association also proposed raising the personal loan limit from Tk20 lakh to Tk40 lakh.

In addition, a proposal was made to allow banks to provide up to 90% financing for the purchase of hybrid vehicles.

Amid the prolonged fallout from the Russia-Ukraine conflict and emerging geopolitical risks from Iran-US tensions, Bangladesh's capital market is standing at a critical crossroads. For years, the narrative of our equity market centred on expansion and "new projects". However, in a high-interest-rate environment where the Taka's depreciation has inflated project costs, the priority must shift from growth to survival.

To revitalise our thinning IPO pipeline, the newly appointed adviser to the Prime Minister on Investment and Capital Markets, Tanvir Ghani, along with the Bangladesh Securities and Exchange Commission (BSEC), needs to rethink a fundamental constraint: the utilisation of IPO proceeds for debt repayment.

A market in retreat

The numbers tell a sobering story. Since the brief post-pandemic surge in 2021, appetite for Initial Public Offerings has sharply declined – from 13 IPOs in 2021 to zero in 2025. This stagnation is not merely a symptom of "poor quality" companies. Many robust, Tier-1 firms are currently over-leveraged, burdened by heavy debt taken for capital expenditure over the last four to five years. In the current climate, these firms cannot feasibly justify further expansion, yet they are bleeding from double-digit interest rates. The problem is structural, not reputational.

The BSEC deserves credit for its recent efforts in modernising the valuation process for IPOs with premiums. By refining these methods to reflect intrinsic value, the Commission has finally addressed long-standing valuation anomalies. However, the next logical step – to truly breathe life into the market – is providing these corporates the flexibility to repair their balance sheets.

The 30% ceiling: A barrier to consolidation

On 30 December 2025, BSEC finalised the Public Offer of Equity Securities Rules, 2025. While the commission amended valuation methods, one particular clause remains a bottleneck: a maximum of 30% of IPO or RPO proceeds may be used for repayment of outstanding loans or investments. While the rule ensures that loans being repaid were used for legitimate BMRE (Balancing, Modernisation, Replacement, and Expansion) purposes, the 30% cap is increasingly out of touch with corporate reality.

For a company with a high debt-to-equity ratio, an IPO that only clears 30% of its debt does not move the needle on its credit rating or profitability. If a firm is forced to deploy the remaining 70% of proceeds into new projects it does not need – or cannot afford to operate due to soaring energy costs – the IPO becomes a burden rather than a blessing. The rule, intended to protect the market, is instead keeping quality issuers away from it.

A concrete illustration

Consider a mid-sized Bangladeshi textile manufacturer – call it company ABC – that invested Tk400 crore in factory expansion between 2020 and 2022, financed primarily through term loans at rates that have since risen to 13-14%. Today, company ABC is profitable at the operating level: it generates positive EBITDA, its plant runs at 70% capacity, and its export receivables are regular. But its interest burden consumes nearly half of its operating profit, leaving little room for retained earnings or dividend distribution.

Company ABC wishes to raise Tk250 crore through an IPO. Its debt repayment need is Tk200 crore. Under the current rule, only Tk75 crore may go toward debt repayment. The remaining Tk175 crore must fund "new projects" – yet company ABC has no immediate CAPEX pipeline, no additional capacity need, and no appetite to add fixed costs in an uncertain energy environment. The result: either company ABC walks away from the exchange entirely, or it lists with an artificially constructed use-of-proceeds that satisfies the regulator but serves no genuine business purpose.

Had the cap been set at 80% or eliminated for qualifying firms, company ABC could reduce its interest burden by Tk200 crore, improve NPAT by an estimated Tk26-28 crore annually, and emerge as a fundamentally stronger listed entity – one that attracts institutional investor confidence rather than undermining it.

Why a higher threshold makes sense

Allowing a significantly higher proportion of IPO proceeds to be used for debt repayment offers several systemic benefits. First, firms replace high-cost bank debt with permanent equity capital, immediately boosting NPAT and improving return on equity. Second, by migrating corporate debt from the banking sector to the capital market, we reduce pressure on a banking system already struggling with non-performing loans. Third, in a volatile global economy, a lean and deleveraged company is more resilient than an over-extended one. Finally, a company with a repaired balance sheet – lower gearing, stronger interest coverage – is fundamentally more investable, and far more likely to sustain its listing price post-IPO.

What peer markets tell us

This is not an untested idea. India's SEBI imposes no numerical ceiling on the proportion of IPO proceeds directed toward debt repayment. Its 2025 amendment to the ICDR framework explicitly recognised capex-loan repayment as equivalent to capital expenditure – acknowledging that paying off a factory loan is economically indistinguishable from building one. Malaysia's securities commission similarly sets no regulatory cap, focusing instead on disclosure and time-bound deployment. Across the globe, the philosophy is consistent: disclose the intended use of proceeds, and let the market determine whether the proposed capital restructuring is acceptable.

Bangladesh's 30% statutory cap is an outlier in this landscape, substituting regulatory prescription for investor judgment.

A workable reform

The BSEC should consider a temporary three-to-five-year window during which the cap is lifted for companies meeting clear eligibility criteria: positive operating cash flow for at least two of the three preceding fiscal years; an auditor's certificate confirming that loans proposed for repayment were used for BMRE-eligible purposes; a pre-IPO debt-to-equity ratio exceeding 2.0x; no default classification with any scheduled bank or financial institution; and a 24-month undertaking against drawing new bank financing for overlapping CAPEX purposes. These criteria preserve the spirit of the original rule while creating a transparent, operationally credible pathway for genuinely over-leveraged but fundamentally sound firms.

The path forward

To bring the market back to life, we must stop viewing debt repayment as a "waste" of IPO funds. If a company used bank loans to build a factory three years ago, that factory is already a national asset. Paying off that loan with public equity is simply a change in capital structure – not a loss of value. Our peer regulators in India and Malaysia understand this. Without this flexibility, IPO activity will remain subdued, and our best corporate houses will continue to stay away from the exchanges – preferring to suffer under the weight of bank interest rather than enter a market that does not give them room to breathe.

It is time to prioritise financial stability over forced expansion.

The Asian Development Bank (ADB) has cut Bangladesh’s economic growth further to 4 percent for the current fiscal year 2025–26 from its previous projection of 4.7 percent amid a fuel price spike and disruption in global supply chains due to the war in the Middle East.

The ADB said the economy might pick up and grow by 4.7 percent in the next fiscal year 2026–27, according to the latest Asian Development Outlook (ADO) April 2026 released today.

This is the third time the ADB has revised down its Gross Domestic Product (GDP) growth forecast for Bangladesh.

The Manila-based lender in December forecast 4.7 percent GDP growth in the current fiscal year, down from its September forecast of 5 percent. In April last year, the ADB had projected 5.1 percent growth for the same year.

The current growth outlook reflects a recovery in consumption and investment as political uncertainty eases after the general election. Temporary supply chain disruptions linked to conflict in the Middle East affected activity in the last quarter, but their impact is expected to fade, the ADB said in a press release.

“Bangladesh is facing a difficult economic environment, shaped by global uncertainties, domestic structural constraints, and pressures on the external and financial sectors,” said ADB Country Director in Bangladesh Hoe Yun Jeong.

Inflation is projected to remain elevated at 9 percent in FY26, despite some easing, reflecting persistently high global energy prices and ongoing supply disruptions. It is expected to moderate to 8.5 percent in FY27 as external shocks subside and domestic supply conditions improve.

“Downside risks to the outlook remain substantial, particularly if the conflict prolongs,” it said.

Disruptions to global energy markets, shipping routes, and supply chains could drive sustained increases in oil and gas prices, intensifying domestic inflationary pressures and complicating ongoing disinflation efforts, thereby constraining macroeconomic policy flexibility, it said.

“Higher energy prices could also widen the fiscal deficit, especially if energy-related subsidies increase or the pass-through to consumers is delayed.”

The ADO report said external sector pressures may rise as exports and remittances soften amid slower economic activity in key Persian Gulf economies, while elevated import costs and freight rates would further strain the current account amid already tight external liquidity.

Overall, the balance of risks is firmly tilted to the downside, underscoring Bangladesh’s vulnerability to external shocks in a context of still-fragile macroeconomic conditions. Climate-related shocks remain an additional, persistent risk.

The ADB said the current account deficit, the record of a country's international transactions with the rest of the world, is anticipated to be 0.5 percent of Gross Domestic Product in FY26, widening slightly to 0.6 percent in FY27, driven by stronger import demand and a broader trade deficit.

The dollar slipped on Friday, putting it on track for its largest weekly drop ​since January, as investors sold safe-haven assets on the assumption that oil shipping will resume if a ceasefire holds in the ‌Gulf.

The dollar had towered in March as one of the few bastions of safety as the Iran war sent oil prices surging and hit stocks and gold, while inflation worries pressured bonds.

But since a fragile ceasefire was reached on Tuesday, those positions are being unwound.

The euro has rallied 1.8 percent this week to trade at $1.173, while sterling ​has gained 2 percent since Monday to $1.347.

The risk-sensitive Australian and New Zealand dollars are set for weekly rises of nearly 3 percent on ​the dollar, with the Aussie trading just above 70 cents.

MARKETS ARE OPTIMISTIC EVEN THOUGH CEASEFIRE IS FRAGILE

“The market still seems generally optimistic, despite some of the ceasefire fraying,” said Marc Chandler, chief market strategist at Bannockburn Global Forex.

Data on Friday showed ​that US consumer prices rose by the most in nearly four years in March as the Iran war boosted oil prices and the pass-through from tariffs ​persisted.

The increase was largely in line with expectations and the markets’ direction is more likely to hinge on the outcome of weekend peace talks between the US and Iran in Islamabad, analysts said.

“People were buying the US dollar when the war was at its most intense moment and now they’re selling as the tail risk ​of a really bad outcome has faded quite a bit,” said Jason Wong, senior strategist at BNZ in Wellington.

“Even though it still looks ​a bit shaky, the ceasefire removing that tail risk is important from a sentiment point of view,” he said, adding that the mood could turn very quickly ‌if the ⁠anticipated weekend peace talks fail to deliver progress.