US and Iranian officials said they had agreed on a framework to end their war, halt the US blockade of Iran and reopen the Strait of Hormuz, a preliminary pact that sent oil prices falling but leaves the fate of Iran's nuclear program to further negotiations.

"The Deal with the Islamic Republic of Iran is now complete," US President Donald Trump wrote on his Truth Social platform around 5:30 p.m. ET local time in Washington (2130 GMT) on Sunday. His post came shortly after Pakistani Prime Minister Shehbaz Sharif, whose country has served as a mediator, announced a deal had been struck early on Monday local time.

The memorandum of understanding is scheduled to be officially signed on Friday in Switzerland.

The precise terms were not immediately known. Sharif said in a post on X that the pact called for "the immediate and permanent termination of military operations on all fronts, including in Lebanon."

Lebanon has been a sticking point in negotiations, with Israel and Hezbollah ignoring calls from Trump and others to stop their attacks on each other in recent weeks.

In a statement, the secretariat of Iran's Supreme National Security Council said war and military operations on all fronts, including Lebanon, would end permanently starting on Monday night.

Iran's deputy foreign minister, Kazem Gharibabadi, said a more expansive agreement would be negotiated during a 60-day ceasefire period, including sanctions relief for Iran.

The fate of Iran's nuclear program, another thorny issue, will also be addressed in those later talks, sources previously told Reuters.

There was no immediate reaction to the announcement from Israel, which has said it was not party to the US-Iran talks.

STRAIT TO REOPEN
Trump said the Strait of Hormuz, a major shipping route for global oil and gas supplies that Iran has effectively shut down for months, would open on Friday, and that he had ordered the end of the US blockade of Iranian ports.

"Ships of the World, start your engines. Let the oil flow!" Trump wrote.

Oil prices fell on the news. Brent crude futures fell 4% in early trading on Monday, while ​US ⁠West Texas Intermediate slid more than 4.6%. Stock markets in Asia jumped.

Former Biden administration State Department spokesperson Matthew Miller said Trump had made important concessions to Iran to achieve the status quo that existed before he launched the war.

"We have no assurances the nuclear program will ever be addressed, but Iran has shown the world it can take the global economy hostage and get something from the US in return," said Miller.

Thousands of people have been killed, mostly in Iran and Lebanon, since US and Israeli forces first attacked Iran on February 28. Iran has struck Israel and Gulf states hosting US bases and has effectively blockaded the Strait of Hormuz, pushing up global energy prices. US forces have blocked Iranian ports in response.

The Iran war has become a political liability at home for Trump and his fellow Republicans in Congress, with public opinion polls showing Americans deeply frustrated by rising gas prices ahead of November's midterm elections. But Trump has also faced pressure from members of his own party who insist that Iran's nuclear program must be completely shut down.

Republican Senator Lindsey Graham, a leading Iran hawk, praised the deal but said he would be "watching closely" the coming negotiations on Iran's nuclear program.

"Under our law, any nuclear deal with Iran will be sent to Congress for review and a vote," he said. "Congratulations to all in getting us to this point."

During his first term, Trump withdrew the US from a 2015 multilateral Iran deal, negotiated by Democratic President Barack Obama, that lifted sanctions on Tehran in exchange for limits on its nuclear program, including international inspections.

Iran responded by ramping up its enrichment of uranium, producing ​more than 400 kg (around 900 pounds) of material at close to bomb-grade purity. The eventual fate of that uranium is likely to be a key negotiating point during the upcoming talks.

'A VERY DIFFICULT GUY'
The agreement was sealed despite an Israeli strike on Lebanon on Sunday that drew criticism from both Iran and Trump.

Prime Minister Benjamin Netanyahu has differed with Trump over American demands that Israel curb its military action in Lebanon to allow the United States to reach a deal with Iran.

Israel has said it will retain freedom of operations in Lebanon, while Iran has made a full ceasefire there an important component of its demands.

Trump updated Netanyahu on the progress toward a peace deal during a phone call on Sunday, Israel's N12 reported, citing a senior official.

In an interview with the New York Times, Trump called Netanyahu "a very difficult guy" and argued the Israeli leader should thank him for saving Israel from a nuclear-armed Iran.

Leaders outside the Middle East, who have kept a wary eye on the conflict, welcomed the announcement.

In a joint statement, the United Kingdom, Germany, France and Italy said they were prepared to lift sanctions on Iran in response to "clear, verifiable steps" to limit its nuclear program.

"We are clear that ​toll-free freedom of navigation must now be restored in the Strait of Hormuz," British Prime Minister Keir Starmer said. "Iran must never have a nuclear weapon."

Before the deal was announced, a senior Iranian official told Reuters that, under the terms of the draft, the United States would agree to release $25 billion of frozen Iranian assets. The Trump administration has previously said any release of Iranian money would only take place once Iran has fulfilled certain conditions under a peace deal.

A US official, also speaking before the announcement, said the agreement would ultimately lead to the dismantling of Iran's nuclear program, with its stockpile of highly enriched uranium to be destroyed and removed. The senior Iranian official said the draft deal would allow Iran, which denies seeking a nuclear bomb, to dilute its enriched uranium inside the country.

The Chittagong Stock Exchange PLC (CSE) today (Sunday) welcomed the proposed national budget for fiscal year 2026-27, describing it as a timely and bold initiative aimed at economic recovery and building an inclusive economy.Global economy podcast

Speaking at a post-budget press conference held at its headquarters, CSE Chairman AKM Habibur Rahman said the historic inclusion of capital market strategies in the national budget reflected the government's growing recognition of the sector's role in economic development, BSS reports.

He praised the government's emphasis on modernizing market infrastructure and enhancing digital capacity, particularly the initiative to operationalize the country's first commodity exchange.

He said the CSE has already completed the necessary technological and regulatory preparations for launching the commodity exchange and stands ready to support the initiative.

It also welcomed measures aimed at diversifying financial products, including the introduction of Real Estate Investment Trusts (REITs), Exchange Traded Funds (ETFs) and index hedging instruments.

According to the CSE chairman, the exchange's Next Generation Trading System is fully prepared to accommodate these products, while the proposed transition of the settlement cycle from T+2 to T+0 would significantly improve market liquidity.

While expressing overall support for the proposed Tk 9.38 trillion budget presented by Finance Minister Amir Khosru Mahmud Chowdhury, the CSE put forward several recommendations to further accelerate capital market development.Market trend analysis

Among its key proposals, the exchange sought a five-year tax holiday for the commodity exchange segment, citing the substantial investment required to establish and operate a world-class commodities market.

The CSE also recommended increasing the tax rate gap between listed and non-listed companies from the proposed 7.5 percent to 10 percent to encourage more quality companies to enter the capital market.

To boost new listings, it proposed tax-free income facilities for newly listed companies during their first three years after listing.

In support of the government's digitalization agenda, the exchange suggested reducing withholding tax on technical services provided by non-residents from 20 percent to 10 percent and lowering VAT on software maintenance services from 15 percent to 5 percent.

The CSE further urged the government to retain the existing 20 percent tax rate on dividend income earned by institutional investors, arguing that removing the cap could negatively affect market growth.

Expressing concern over the withdrawal of tax exemptions for zero-coupon bonds, the exchange also called for a policy target to expand the corporate bond market to at least 2 percent of the country's GDP.Personal finance e-book

CSE Managing Director M Saifur Rahman Mazumdar said the proposed budget acknowledged the need to reduce excessive dependence on the banking sector and promote a balanced financial system where the capital market can play a greater role in financing long-term investments and infrastructure projects.

He reaffirmed the exchange's commitment to working closely with the government and regulators to develop a transparent, modern and internationally competitive capital market in Bangladesh.

The benchmark index of the Dhaka Stock Exchange (DSE) surpassed the 5,600-point threshold in the post-budget session on Sunday for the first time in nearly 10 months, as investors reacted positively to a series of budgetary measures.

Finance Minister Amir Khosru Mahmud Chowdhury proposed a range of policy measures aimed at reviving private-sector growth and promoting long-term capital market development, which gave a confidence boost to investors.

The market index tracked a firm upward trajectory from the outset of the session. As the session progressed, investor participation intensified, with buying interest remaining strong.

Eventually, the benchmark index of the DSE surged 105 points, or 1.90 per cent, to settle at 5,625, reflecting renewed investor confidence amid expectations of improved corporate profitability, enhanced market liquidity and stronger institutional participation.

Market analysts said the rally was driven by a combination of fiscal incentives, tax relief measures and regulatory reform initiatives aimed at deepening the capital market and attracting long-term investment.

Among the key proposals welcomed by investors are the conversion of tax deducted at source (TDS) into an advance tax mechanism, reductions in withholding taxes on several business inputs, simplification of listing procedures and measures to strengthen market governance.

Banks, telecom operators, pharmaceuticals, fuel distributors, power companies, electronics manufacturers and automobile producers are likely to emerge as the biggest beneficiaries of the proposed measures.

The budget also proposed allowing foreign investors to repatriate profits and transfer proceeds from shares purchased through non-resident investor taka accounts within one working day, a move to improve market participation by foreign investors and help deepen the market.

Akramul Alam, head of research at Royal Capital, said the overall budget framework is supportive of the capital market, although effective implementation and continued policy support are key for sustainable development of the capital market.

He added that expectations surrounding the newly formed securities commission's reform agenda also helped strengthen market sentiment, as investors anticipate greater transparency, fair pricing and stronger governance.

The market also received a boost from improving global sentiment following the announcement of a ceasefire in the Middle East. As global uncertainties seemed to wane, investors continued accumulation of beaten-down stocks.

In another development, Bangladesh Bank provided Tk 25 billion in special liquidity support to Islami Bank Bangladesh on Sunday to help the country's largest Shariah-based lender overcome an acute cash shortage.

Following the news, Islami Bank's stock jumped 9.97 per cent to Tk 32 per share on Sunday, after a sharp decline since the removal of the floor price. Islami Bank alone added 18.3 points to the prime index during the session.

The FY27 budget also proposed strengthening the capital market as an alternative financing source through simplification of listing procedures, development of alternative investment instruments, and gradual shortening of the trade settlement cycle.

According to EBL Securities, the market momentum remained upbeat, supported by expectations that budgetary measures would improve business confidence, stimulate investment and enhance corporate profitability.

Market stakeholders, including the Dhaka bourse, welcomed the proposed budget, saying the measures would help develop the country's capital market and create a more investment-friendly environment.

In a statement, DSE Chairman Mominul Islam said the proposed tax reliefs, market reforms and sector-specific incentives are expected to support corporate profitability, improve cash flows and encourage investment.

"These developments have generated renewed optimism among investors and market participants," he said, adding that the government's proactive approach towards capital market reforms has created fresh expectations for a more stable, transparent and vibrant market.

All but three blue-chip stocks posted gains on Sunday. The DS30 index, comprising blue-chip companies, jumped 47 points to 2,120, while the DSES index, which tracks Shariah-based stocks, rose 14 points to 1,129.

Market participation on the premier bourse remained robust, with total turnover standing at Tk 13.58 billion, a 10 per cent increase over the previous session, as buying interest spread across banking, financial, engineering and pharmaceutical stocks.

Gainers strongly outnumbered losers. Of the 392 issues traded on the DSE, 246 advanced, 96 declined and 50 remained unchanged.

Major sectors posted gains. Non-bank financial institutions led the gains with a 4.4 per cent rise, followed by banking, power, food, pharma, engineering and telecom.

The Chittagong Stock Exchange (CSE) also ended higher. Its All Share Price Index (CASPI) rose 147 points to 15,343, while the Selective Categories Index (CSCX) jumped 91 points to 9,411.

The government has decided to establish Export Processing Zones (EPZs) in Barishal and Lalmonirhat to attract foreign investment, increase exports, and create employment opportunities.
FE

The Cabinet Division has already sent letters to the Secretary of the Prime Minister’s Office and other relevant authorities to begin implementing the EPZ projects.

During the DC Conference held in May, several DCs highlighted the need for new EPZs and economic zones.

The concerned DCs have been instructed to submit progress reports on the implementation of these plans to the Cabinet Division.

These directives were outlined in a letter sent by the Cabinet Division to the Prime Minister’s Office and relevant authorities.

Officials from the Cabinet Division told state-owned BSS that, out of approximately 1,729 proposals received from various districts, feasible proposals were selected and presented to the Prime Minister and relevant stakeholders after several rounds of meetings with ministries and implementing agencies.

The Prime Minister’s Office has decided to implement six key decisions in three phases: short-term (within one year), medium-term (within three years), and long-term (within five years).

Among these decisions are the establishment of EPZs in Barishal and Lalmonirhat and economic zones in Gazipur, Barguna, and Pirojpur.

Bangladesh currently has eight government-owned EPZs under the Bangladesh Export Processing Zones Authority (BEPZA): Dhaka, Chattogram, Mongla, Cumilla, Ishwardi, Karnaphuli, Adamjee, and Uttara EPZs. Bangladesh economic report

The primary purpose of EPZs is to facilitate the duty-free import of raw materials and the direct export of manufactured goods.

Mohammad Khorshed Alam Khan, a Joint Secretary of the Cabinet Division, told BSS that numerous proposals are submitted each year during the DC Conference, and the government adopts short, medium-, and long-term plans based on priority.

He said that work has already begun on implementing several important decisions this year and that letters have been sent to the relevant ministries.

In the presence of the Prime Minister, ministers, secretaries, and implementing authorities, the Gazipur DC proposed establishing an economic zone to relocate industries to a designated area.

The proposal argued that planned industrialisation would reduce waste and environmental pollution, protect agricultural land, increase domestic and foreign investment, and provide entrepreneurs with easier access to industrial sites.

The Barishal DC proposed establishing an EPZ in Barishal, arguing that it would create employment opportunities locally, reduce migration to Dhaka and Chattogram for work, lower poverty, improve living standards, and benefit from direct road connectivity with Dhaka and proximity to Payra Port.

The Barguna DC proposed an economic zone in the coastal district, noting that its location near Payra Port could make it a strategic centre for international trade.

The proposal also highlighted the potential for marine resource processing and preservation, along with integrated development of the fisheries, agriculture, industry, and tourism sectors.

The Pirojpur DC proposed establishing an economic zone in Pirojpur Sadar Upazila, citing the district’s strong road links with Dhaka, Khulna, and Barishal, as well as waterway connections to Chattogram, Mongla, and Payra seaports.

These links would facilitate the transportation of raw materials and finished products.

The proposal further argued that easy access to raw materials and labour would attract domestic and foreign investment, create jobs through agriculture-and fisheries-based industries, and enable exports after meeting domestic demand.

The Lalmonirhat DC proposed an EPZ, arguing that it would generate industrial and employment opportunities, reduce poverty, improve living standards, and support agro-based industries due to the abundance of rice, potatoes, maize, and other crops.

The presence of Burimari Land Port and Bangladesh Railway facilities would also simplify imports and exports.

Md. Mamun, Deputy Secretary of the Field Administration Wing of the Cabinet Division, told BSS that BG Press is preparing a publication containing the development initiatives discussed during the DC Conference. Copies will be distributed to relevant stakeholders.

He added that all ministry secretaries have been informed of their responsibilities and instructed to submit monthly implementation progress reports to the Cabinet Division by the 10th of each month.

Meanwhile, Prime Minister Tarique Rahman discussed the government’s plans to restore economic discipline and attract foreign investment during a parliamentary session.

Responding to a written question from Cumilla-10 lawmaker, Md Mobashwer Alam Bhuiyan, the Prime Minister, said there is no alternative to restoring economic discipline if the country is to achieve sustainable development.

As part of this effort, the government has taken several groundbreaking measures through the Ministry of Commerce and other relevant agencies to simplify investment procedures and attract both domestic and foreign investors.

He said that the country’s Export Policy has already been updated and that work is underway to revise the Import Policy Order 2026–2029 to facilitate easier market access for foreign investors.
Highlighting a major structural reform initiative aimed at reducing institutional complexities and improving service delivery, the Prime Minister said the government has taken steps to integrate the Bangladesh Investment Development Authority (BIDA), Bangladesh Economic Zones Authority (BEZA), Public-Private Partnership Authority (PPPA), and Bangladesh Hi-Tech Park Authority into a unified framework to enhance efficiency and reduce bureaucratic delays.

The Bangladesh Association of Banks (BAB) has welcomed the government’s effort to recapitalise banks by spending over Tk 40,000 crore in the current fiscal year, but said the move needs to be matched by swift legal recovery of misappropriated assets for lasting effects.

Finance Minister Amir Khosru Mahmud Chowdhury disclosed the figure in his budget speech on Thursday, saying the government had committed the funds to restore the financial health of weak banks.

In a statement on the proposed budget, the BAB, which represents bank sponsors, demanded decisive enforcement against wilful defaulters and transparent treatment of shareholdings acquired through irregular means.

“Depositors’ confidence rests on accountability. Further, there should have been a dedicated budgetary allocation for establishing an Asset Management Company (AMC) to clean up the balance sheets of weak banks, reduce their non-performing loan burden and ease capital shortfall challenges across the sector,” said BAB Chairman Abdul Hai Sarker.

The association of private commercial banks stressed the need to match ambition with discipline and accountability.

“This is a budget of ambition and direction -- one that rightly understands a simple truth: there can be no strong economy without strong banks, and no strong banks without trust,” the association said.

It also welcomed risk-based supervision, the removal of undue influence, the development of bond markets, and the move towards a digital, cashless economy.

The proposed bank resolution framework should include clear safeguards to ensure that parties whose conduct contributed to the distress of financial institutions cannot re-enter the system, it added.

The association stressed that government borrowing from the private banking system should remain disciplined so that it does not crowd out private-sector credit, on which investment, exports and employment depend.

“Private credit must be protected,” the BAB chairman said.

The association called for fiscal policy to reinforce capital rebuilding and prevent its erosion, and said dividend taxation should not discourage institutional investment in the capital market.

The trade body further demanded that provisioning shortfalls should, over time, be treated outside taxable income and that the transition to a cashless, digitally inclusive economy must receive adequate fiscal support.

The dollar steadied on Friday but remained on track for a weekly loss, as markets monitored negotiations over a deal that could end the Middle East conflict. Traders were also digesting unprecedented demand for shares in SpaceX, which raised $75 billion in an initial public offering and jumped about 20 percent in its Nasdaq debut.

The euro was little changed at $1.15725, hovering near a one-week high and set for a weekly gain after the European Central Bank delivered its first interest rate hike in three years on Thursday.

Leaked terms of a proposed memorandum to end the war in the Gulf, outlined by Western, Pakistani and Iranian sources on Friday, appeared to favor Iran, drawing criticism from US President Donald Trump who called the reports inaccurate. Trump’s announcement on Thursday regarding a deal had prompted Wall Street shares to rally, oil prices to slip and the US dollar to fall.

Markets are pausing as they assess the prospects for peace and the impact of the SpaceX IPO, with investors watching whether funds will shift from equities or cash, said John Velis, FX and macro strategist at BNY.

“The hoped-for good news on the ceasefire in the Middle East had a big reaction overnight and I think we came in this morning and we have the SpaceX IPO and a bunch of central bank meetings next week,” Velis said.

The US dollar was up 0.18 percent against Japan’s currency at 160.225 yen, holding near a key level that often triggers concern about intervention from Tokyo.

The pound was steady at $1.34145. Data showing the UK economy contracted in April had little impact, with markets focused on Iran talks.

The US dollar index, which measures the greenback against a basket of six currencies, was flat at 99.75 after hitting a one-week low on Thursday. Investors have tended to buy the safe-haven dollar when tensions in the Iran war flare, and sell it in favor of riskier assets such as stocks when peace talks appear to make progress.

The extreme ​volatility of global oil prices has drained liquidity from the market this year at the fastest pace ‌on record, as investors have become increasingly wary of committing cash to an asset that has become hostage to US President Donald Trump’s daily social media posts on the Iran war.

Liquidity, or how well matched the number of buyers is to the number of sellers, is the ​product of a number of factors, including traded volume and open interest.

Open interest, or the number of Brent ​crude futures contracts that investors own, has fallen by nearly 17 percent this year, the fastest rate since at least 2009, according to LSEG data .

Trump’s pattern of ratcheting up threats against Tehran, only to assert hours later ​that a peace deal is imminent, as well as the difficulty in tracking real-world oil fundamentals right now, has led ​to a degree of fatigue among investors, traders say.

“People are exhausted by this chaos. They want this to be over. You cannot trade futures without being constantly burned in an environment when the messaging changes every other hour,” a senior executive from a major trading desk said. ​The executive asked not to be named due to the sensitivity of the matter.

Oil prices fell nearly 3 percent to their lowest ​in nearly two months on Friday after Trump called off threatened new strikes on Iran on Thursday, saying a deal to end ‌the war was close.

The front-month August Brent futures contract registered the lowest open interest since last July when it became the most-actively traded at the start of this month, with 534,227 lots. Open interest peaks at the start of the month and gradually dwindles until expiry of the contract, at which point, it shifts to the next month in the ​chain.

When liquidity becomes thin, buyers and ​sellers must often accept far higher, or lower prices than they otherwise would, because of a dearth of willing counterparties, thereby creating larger price swings. This increases possible rewards, but also the risk of losses.

Former ​Goldman Sachs commodities chief Jeffrey Currie said this week the real reason the oil ​price had not returned meaningfully above $100 a barrel in the past few weeks was not a sign of supply - which has been severely constricted by the near-closure of the Strait of Hormuz - being plentiful, but rather of what he called “capital aversion”.

“Policy uncertainty has made oil too volatile to ​hold,” he said in a post on X on June 10.

“2026 year-to-date open interest ​decline is the worst on record. Unlike 2022, there’s no rates shock or sanctions forcing the exit. This is capital aversion,” Currie, who is a ​senior adviser to alternative asset manager Carlyle, said.

Business leaders have welcomed the proposed national budget for FY2026-27, describing it as a positive step for the private sector and evidence of a shift in the government's approach toward businesses and investors.

The observations were made at a seminar titled "The Finance Bill 2026 Unveiled", organised by SMAC Advisory Services Limited at Gulshan Club in Dhaka on Sunday (14 June).

Speaking at the event, Foreign Investors' Chamber of Commerce and Industry (FICCI) President Rupali Chowdhury said the budget had been well received by investors.

"The budget is really welcome. We have seen a change in the government's mindset," she said.

However, she noted that several longstanding issues affecting businesses and investors remain unresolved and require immediate attention.

"Time is running out. The issues that still exist need to be resolved quickly," she said.

Referring to the imposition of supplementary duties and other tax measures, she said certain sectors, including the beverage industry, continue to face a growing tax burden.

She also stressed that attracting foreign direct investment (FDI) would require more than competitive labour costs.

"The ground reality for companies is still challenging. FDI will not come simply because of cheap labour," she said.

Dr M Masrur Reaz, chairman of Policy Exchange Bangladesh, said, "The biggest positive aspect of the budget is that it sends a good signal to businesses and taxpayers."

He warned that containing inflation would remain one of the government's most pressing challenges.

During the seminar, Snehasish Barua, director of SMAC Advisory Services Limited, outlined key changes proposed in the Finance Bill relating to income tax, value-added tax (VAT) and customs duties.

Zareen Mahmud Hosein, Sukanta Bhattacharjee, director of SMAC Advisory Services Limited, and senior officials of the National Board of Revenue (NBR) also spoke at the event.

Britain’s economy contracted in April as the Middle East war hit growth, official data showed Friday, dealing a setback to Prime Minister Keir Starmer as he grapples with a political crisis.

Gross domestic product fell 0.1 percent in April following growth of 0.3 percent in March, the Office for National Statistics said in a statement.

The reading matched analysts’ expectations and followed a stronger-than-expected performance in the first quarter. Surging energy prices triggered by the war, which began with US-Israeli strikes on Iran on February 28, have reignited inflationary pressures and threatened to derail growth.

“Before the conflict in the Middle East, growth was higher than expected and inflation was falling,” finance minister Rachel Reeves said in response to the figures.

“This is not a war we wanted or joined, but one that will have an impact at home,” she said.

The weak economic showing dealt a fresh blow to Starmer, who is facing calls to step down.

Britain’s defence and armed forces ministers quit Thursday in a row over military spending, further weakening Starmer’s authority just a week before a by-election that could prompt a bid to replace him.

Defence Secretary John Healey resigned warning that Starmer’s long-awaited Defence Investment Plan for funding over the next decade -- which the leader has yet to publish -- risked making Britain “less safe”.

“The effects of the conflict in the Middle East are now well and truly showing up in the economic data, and it isn’t pretty reading for the UK,” said Stuart Clark, portfolio manager at Quilter.

“We expect the economy to continue to fade as the year goes on, and particularly for as long as there is no lasting peace deal in the Middle East,” he added.

Bangladesh's foreign exchange reserves have risen to $31.08 billion after the Asian Development Bank (ADB) disbursed $1 billion in budget support, according to a statement from the central bank issued today (14 June).

The funds, released as part of ADB's budget assistance for Bangladesh, were added to the country's foreign currency holdings, pushing the reserves to just over the $31 billion mark.

According to updated data from the Bangladesh Bank, reserves stood at $30.07 billion on 10 June.

The latest inflow from the Asian Development Bank resulted in a sharp increase over the weekend.

Officials said additional disbursements from other development partners are expected in the coming months, which could further strengthen the reserve position.

The entire Board of Directors of embroiled Islami Bank Bangladesh PLC, led by its new chairman, stands dissolved in a latest regulatory move aimed at safeguarding interests of the bank, its depositors and the public.Regional business directory

According to a statement issued Sunday, the central bank exercised its authority under Sections 45 and 47(3) of the Bank Company Act 1991 to cancel the appointments of all directors of the country's largest Shariah-based bank.

"The decision has been taken in the interest of the bank, depositors and overall public interest," says the Bangladesh Bank (BB) statement.

Under the Act, Mohammad Zahir Hossain, an Executive Director of the central bank, has been entrusted with exercising "all powers and carrying out all responsibilities of the Board of Directors".

A senior BB official told The Financial Express (FE) that Mr. Hossain will perform all functions and responsibilities of the Board of Directors until a new board is formed.

Earlier in the day, the Bangladesh Bank injected Tk 25 billion into the cash-strapped Islami Bank in a special loan to help mitigate its severe liquidity crunch after the Eid vacation.

This sum happens to be the first tranche of Tk 100 billion the Islamic lender last week sought in liquidity assistance from the banking regulator for overcoming the liquidity starvation, Islami Bank officials have said.

The central bank disbursed the financial support to the country's largest Shariah-based bank on Sunday, according to BB spokesperson Arief Hossain Khan.Personal finance e-book

The unconventional bank plunged into a severe trouble in terms of managing liquidity following days of unrest that erupted after the Eid-ul-Azha holiday over the appointment of its new chairman Md. Khurshed Alam.

A group of people who claimed to be clients of the bank started the protest on June 01 under the banner of 'Islami Bank Sachetan Grahok Forum (Islami Bank Conscious Customers' Forum)'.

The continuous agitation triggered panic among many of the depositors who keep withdrawing funds from the beleaguered bank.

As a matter of fact, Islami Bank's liquidity position deteriorated sharply in recent days, resulting in a struggle to meet growing withdrawal demands.

In spillover effect, the bank also reportedly failed to maintain the requisite Cash Reserve Ratio (CRR) with the central bank.

Later in the day, a delegation from Islami Bank met BB governor Md. Mostaqur Rahman at the central bank headquarters briefing him on the bank's current liquidity situation.Investment guide

The delegation comprised Islami Bank's managing director (current charge), two additional managing directors, and six deputy managing directors.

Seeking anonymity, an Islami Bank official says they informed the central bank governor that the trend of cash withdrawal keeps intensifying, leading to the struggle.

Despite the crisis, they managed to settle the cash-withdrawing demand. "That's why we appealed for the central bank, the lender of the last resort."

About the cash withdrawals, the Islami bank official says they have observed the net volume of cash withdrawal having reached around Tk 12 billion a day in the last couple of days.

"And the governor, during the meeting, wanted to know how the bank is using the funds provided to the bank in the meeting and they informed him in detail."

The Chittagong Stock Exchange (CSE) is aiming to launch Bangladesh's first commodity exchange this year, with its Managing Director M Shaifur Rahman Mazumdar, saying the bourse could go live within three to four months once it receives the remaining regulatory approvals.

Speaking at a post-budget press conference held at the CSE conference hall today (14 June), Shafiqur said the exchange's technological infrastructure is fully ready and efforts to build market awareness are in their final stages.

"We could have launched the commodity exchange a year earlier had the government's thinking and the regulatory authorities' approach been aligned with our roadmap," he said.

Shafiqur added that the government's latest budget has explicitly mentioned the establishment of a commodity exchange alongside other infrastructure development initiatives, removing a major policy hurdle.

"We have already placed our proposals before the regulator. If the new regulatory authority approves the brokers and products we have proposed, we will be able to go live within three to four months," he said.

"We are hopeful that since government policy is now aligned with our programme, the commodity exchange will be launched within this year."

Commodity derivatives to be introduced first

Shafiqur clarified that the planned exchange would initially operate as a commodity derivatives platform rather than a spot market involving physical delivery of goods.

"There is a misconception that a commodity exchange means physically delivering commodities. In reality, there are two types of exchanges – spot exchanges, where physical delivery takes place, and derivatives exchanges, where futures and options contracts are traded," he said.

According to him, CSE plans to start by allowing the trading of commodity futures contracts, enabling investors, hedgers and participants across the commodity value chain to manage risks through a transparent marketplace.

Under futures trading, participants enter contracts by depositing margins, while the exchange's technology platform ensures real-time adjustment and risk management.

"Our objective is to provide a platform for price discovery, hedging and risk management," Shafiqur said.

What is commodity exchange

According to Shafiqur, a commodity exchange is a regulated marketplace where commodities or contracts linked to commodities are traded, much like shares are traded on a stock exchange.

These commodities can include precious metals such as gold and silver, agricultural products such as rice and wheat, and imported goods such as crude palm oil.

Commodity exchanges generally operate either as spot markets, where physical delivery of goods takes place, or as derivatives markets, where futures and options contracts are traded without the immediate exchange of the underlying commodity.

By enabling participants to discover fair prices, hedge against price volatility and manage risks, commodity exchanges help create more transparent and efficient markets.

They can also benefit producers, including farmers, by allowing them to secure prices for their products in advance, reducing uncertainty and distress sales.

Gold, silver and crude palm oil are proposed as initial products

CSE has proposed launching the platform with gold, silver and crude palm oil futures, considering them relatively straightforward products with internationally recognised pricing benchmarks.

"Gold and silver prices are globally available and well understood. Crude palm oil is an important product for Bangladesh. If we can successfully launch the platform with these products, we can gradually bring other essential commodities into the market," he said.

Shafiqur said agricultural products could eventually be incorporated into the exchange, creating opportunities for producers to secure prices for their goods months before harvest.

"If agricultural products are introduced, producers will be able to trade their future output in advance. Farmers would face less pressure to sell immediately after harvest and could better manage price risks," he said.

He added that any product introduced on the exchange would require approval from the regulator, ensuring appropriate checks and balances, particularly for sensitive commodities.

Farmers could benefit through guaranteed pricing

Shafiqur argued that commodity futures markets could strengthen farmers' bargaining power by allowing them to lock in prices before bringing products to market.

"If farmers can secure prices in advance, the pressure they currently face at the time of sale will reduce significantly," he said.

He cited rice as one of the agricultural products CSE may consider in the future if the initial phase proves successful.

Lessons from India's experience

Director Major (Retd) Emdadul Islam pointed to India's commodity exchange experience as an example of how organised markets can improve quality standards and pricing.

Referring to India's cotton sector, he said commodity exchanges helped organise producers, establish scientific storage facilities and ensure both quality assurance and fair prices.

"Farmers became assured of prices and quality, while users gained confidence that they would receive products of a certain standard," he said.

Emdadul noted that Bangladesh often experiences severe price volatility and post-harvest losses in agricultural products due to inadequate storage and fragmented markets.

"Many times farmers are forced to throw away products or sell at distress prices because they have no bargaining power," he said.

Emdadul added that a well-functioning commodity exchange could improve price transparency and reduce inefficiencies in markets ranging from agricultural goods to imported essentials such as edible oils.

"We are operating with an imperfect market serving 180 million people. A perfect market requires proper price discovery and advance certainty. Commodity exchanges can contribute to that process with the support of regulators and the government," he said.

The benchmark index of the Dhaka Stock Exchange climbed above the 5,600-point mark for the first time in more than nine months today (14 June), as investors responded positively to the post-budget policy environment and expectations of stronger economic conditions.

The DSEX gained 105 points, or 1.9%, to close at 5,625. The blue-chip DS30 index rose 47 points to 2,120, while the Shariah-based DSES advanced 14 points to 1,129.

Market turnover increased by 9.6% from the previous session to Tk1,358 crore. Of the issues traded, 246 advanced, 96 declined and 50 remained unchanged, reflecting broad-based buying interest across the market.

Analysts said investors welcomed a range of policy measures outlined in the budget, including support for private-sector growth, liquidity-enhancing initiatives and expectations of improving global economic conditions.

Demand strengthened across several major sectors, including banking, financial institutions, manufacturing and engineering, while rising turnover pointed to stronger participation from both institutional and retail investors.

However, market participants cautioned that sustaining the rally would depend on the effective implementation of policy measures, improved liquidity and continued structural reforms.

Akramul Alam, head of research at brokerage firm Royal Capital Ltd, said several positive factors contributed to the strong performance of the stock market on the day.

He said that although the budget did not offer direct incentives to investors, changes in taxation and measures viewed as unfavourable by dividend-focused investors had prompted a shift in investment strategies.

"As a result, many investors are reallocating their portfolios away from dividend-yielding stocks towards sectors with higher capital gain potential," he said, adding that this had increased buying pressure, particularly in banking, financial institutions and engineering stocks.

He also said the government's Tk60,000 crore rescue package for closed factories was expected to improve short-term liquidity in the market. "This injection is likely to increase the velocity of money, creating a more active trading environment and supporting overall market momentum," he said.

According to Akramul, plans to gradually shorten the settlement cycle from T+2 to T+0 have also strengthened investor confidence, as faster settlement is expected to attract more active traders and improve participation over time.

On the international front, he said easing tensions involving Iran and lower crude oil prices were positive developments for the global economy.

"If oil prices stabilise at normal levels, it would help control inflation in Bangladesh and ensure a more stable energy supply," he said.

Akramul added that buyers had outnumbered sellers for several weeks, indicating sustained accumulation and strong market momentum.

He also noted that the Tk2,500 crore liquidity support provided to Islami Bank had boosted the bank's share price, contributing to the rise in the benchmark index.

DSE Brokers Association President Saiful Islam said the health of the market should not be measured solely by movements in the index.

"The true strength of the stock market should not be judged only by the rise in the index, but by the level of investor confidence in the market," he said.

He said sustainable growth would depend on restoring and maintaining investor trust. If coordinated efforts by policymakers, regulators and market stakeholders continue, both turnover and the benchmark index could grow in a more stable and consistent manner.

Saiful also said several external economic indicators were turning favourable for Bangladesh, helping improve sentiment in the capital market.

He expressed hope that the domestic economy would strengthen gradually as broader macroeconomic conditions improved.

"If the underlying economic fundamentals continue to recover, the stock market will also benefit through higher participation, improved liquidity flow and reduced volatility," he said.

"Over time, this would help the market move towards greater stability and more balanced growth in both trading activity and index performance," he added.

In its daily market review, EBL Securities said the benchmark index of the capital bourse surpassed the 5,600-mark as favourable fiscal policy measures aimed at reviving private-sector growth and incentives for long-term capital market development bolstered investor confidence and fueled broad-based accumulation across the market.

The brokerage said the market remained firmly positive from the opening bell, with optimism driving sustained buying interest throughout the session and lifting share prices across most sectors.

General insurance stocks accounted for the largest share of turnover, contributing 15.4% of total market activity. The pharmaceutical and banking sectors followed, each accounting for 11.9%.

Most sectors finished higher. Financial institutions led the gains with a 4.4% rise, followed by banking stocks, which gained 3.3%, and information technology shares, which advanced 3.2%. The miscellaneous sector was the only major loser, declining by 3.5%.

Meanwhile, the rally extended beyond Dhaka, with the Chittagong Stock Exchange also ending higher. The Selective Categories' Index (CSCX) rose 91.1 points, while the All Share Price Index (CASPI) gained 147.6 points, reflecting broad-based optimism across the country's two stock exchanges.

Gold prices have fallen sharply in 2026 despite a major conflict involving the United States, Israel and Iran, challenging the precious metal's traditional reputation as a safe-haven asset during periods of geopolitical turmoil.

Prices have declined from a January peak of $5,303 per troy ounce to around $4,235, marking the lowest levels of the year even as tensions in the Middle East continue, says Al Jazeera.

Why is gold usually considered a safe-haven asset?

Investors often buy gold during periods of economic uncertainty, geopolitical conflict or inflation because it is viewed as a store of value that can preserve wealth when other assets come under pressure.

However, gold's performance can also be influenced by factors such as interest rates and the strength of the US dollar.

How has the conflict affected the economy?

The current economic environment has been shaped by the US-Israel war against Iran, which began in late February.

Iran's response has included blocking the Strait of Hormuz, a key route for global oil and gas shipments. The disruption has driven energy prices higher and pushed US inflation to a three-year high of 4.2%.

Why has higher inflation not helped gold?

Although gold is often used as a hedge against inflation, investors are increasingly focused on the possibility of higher interest rates.

Gold is a non-yielding asset, meaning it does not pay interest or dividends. Investors earn returns only if its price rises.

When interest rates increase, assets that generate income become more attractive relative to gold. As a result, demand for the metal can weaken even during periods of elevated inflation.

What has changed in interest rate expectations?

Earlier in 2026, financial markets expected interest rate cuts.

Those expectations have shifted as inflation has remained elevated and the labour market has stayed resilient. Investors now see a 50% probability that interest rates could be raised by December.

The prospect of tighter monetary policy has increased pressure on gold prices.

What role does the US dollar play?

The conflict has strengthened the US dollar, creating another headwind for gold.

Because gold is priced in dollars, a stronger US currency makes the metal more expensive for buyers using other currencies. This can reduce demand and weigh on prices.

Analysts describe the current dynamic as a balance between inflation, which would normally support gold, and rising interest-rate expectations, which are currently exerting greater influence on the market.

What is the outlook for gold?

Gold prices have recovered slightly following reports of a potential agreement between the United States and Iran.

Market participants say a ceasefire could help ease inflationary pressures by reducing disruptions to energy markets. However, gold may continue to face challenges in the coming months as central banks respond to the recent surge in inflation and investors assess the future path of interest rates.

The government's proposed budget for the 2026-27 financial year (FY27) has been built on outdated economic assumptions that completely ignore the ongoing Middle East conflict.

The oversight has resulted in artificially depressed allocations for subsidies and public debt servicing, leaving key macroeconomic projections detached from current global and domestic realities, according to budget documents, discussions with government officials and independent analysts.

Despite a sharp increase in subsidy requirements following the escalation of conflicts involving Iran, the United States, and Israel, the government has proposed slashing subsidy allocations for FY27 to Tk89,538 crore. This represents a drop of over Tk19,000 crore—nearly 18%—compared to actual spending in FY25.

Similarly, the proposed allocation for public debt interest payments has been cut to Tk127,500 crore—roughly Tk9,000 crore lower than the FY25 expenditure—even though total public debt stock is projected to surge to Tk26.33 lakh crore by FY27.
Formulated on pre-war assumptions

Ministry of Finance sources revealed that the revised FY26 budget and FY27 projections rely on data approved back in November last year by the interim government's Coordination Council on Fiscal, Monetary and Exchange Rate Matters, chaired by then Finance Adviser Salehuddin Ahmed.

Although the council met again in April after the BNP government took office in February, the projections were never updated to account for the Middle East crisis that erupted in late February.

The omission is explicitly acknowledged in a footnote within the Medium-Term Macroeconomic Policy Statement, released alongside the budget on 11 June:

"The projections presented are based on data covering July-November of FY2025-26 approved by the coordination council for the revised budget. As such, the effects of the Middle East conflict were not captured in the underlying data used for these estimates... As a result, some projections may, in retrospect, appear somewhat overstated when considered in more recent context and available information."

The conflict has severely disrupted regional energy markets, driving up global prices for oil, gas, coal, and fertiliser. Finance Minister Amir Khosru Mahmud Chowdhury recently admitted that these surging import costs have already saddled the current fiscal year with an additional subsidy burden exceeding Tk42,600 crore.The conflict has also contributed to a renewed rise in inflation and weakened momentum in both imports and exports after earlier signs of improvement.

Questions over macroeconomic

forecastsEconomists and policy analysts have heavily criticised the ministry's ambitious growth, inflation, and credit targets, pointing out that they defy current trends.

According to official data, inflation rose to 9.42% in May, while average inflation during the first 11 months of FY26 stood at 8.63%. Despite this, the finance ministry projects inflation will fall to 7% by the end of the fiscal year and has forecast average inflation of 7.5% for FY27.

Similarly, export earnings recorded negative growth of 2.55% during the first 11 months of FY26. Nevertheless, the government expects export growth to reach 9.02% by the end of the fiscal year and has projected growth of 7.94% for FY27.

Bangladesh Bank data show private sector credit growth slowed to 4.75% in April. However, the finance ministry expects credit growth to accelerate to 8% by June and further to 9.42% in FY27.

The Centre for Policy Dialogue (CPD) has openly questioned whether these targets are remotely achievable. CPD Executive Director Fahmida Khatun noted that the revised budget failed to ground itself in actual implementation progress.

"The projections and targets are unlikely to be achieved because they were formulated based on conditions that no longer exist," Dr Khatun told The Business Standard. "Many assumptions are entirely inconsistent with current realities."

Artificially compressed expenditure

Before the intensification of the Middle East conflict, softening global commodity prices and a weakening US dollar had kept Bangladesh's subsidy bill manageable. That window has closed, yet the budget reflects the opposite reality.

That situation has changed dramatically. Despite this, the proposed subsidy allocation for FY27 has been reduced compared with both actual spending in FY25 and revised estimates for FY26.

Government records show actual subsidy expenditure reached Tk108,673 crore in FY25. The revised allocation for FY26 has been estimated at Tk95,031 crore, while the proposed allocation for FY27 stands at Tk89,538 crore.

A similar pattern is evident in debt servicing.

The government spent Tk1,36,123 crore on interest payments in FY25, when total public debt stood at Tk21.44 lakh crore. Budget documents project public debt will increase to Tk26.33 lakh crore in FY27. Nevertheless, the proposed allocation for interest payments has been reduced to Tk127,500 crore.

Finance Division officials privately concede that if international commodity prices remain elevated or domestic energy tariffs are not hiked, actual subsidy requirements will wildly exceed the budget. They estimate that debt servicing alone will require an additional Tk15,000 crore over the current allocation.

Operating expenditure compressed

On paper, the government has managed to compress operating expenditure to 66.30% of total spending in FY27, down from 72.73% in the revised FY26 budget. Officials claim this reduction accommodates a 50% boost to the Annual Development Programme (ADP) and welfare initiatives, alongside a Tk33,812 crore block allocation for a new public sector pay scale.

Additional block allocations include Tk4,000 crore for unforeseen expenditure and Tk2,041 crore under other expenditure categories.

However, insiders suggest the numbers are a mathematical placeholder. One ministry official hinted that slow implementation of development projects and delays in the planned expansion of the 41-lakh Family Card welfare scheme will likely result in funds being quietly diverted later in the year to cover the inevitable overruns in subsidies and debt interest.

Neither the finance minister nor Finance Secretary Khairuzzaman Mozumder directly responded to questions from TBS at a post-budget press briefing regarding whether operating expenditure had been understated in the proposed budget.

The Dhaka bourse is set to shorten its trading settlement cycle from T+2 to T+1 by December this year, a move aimed at boosting trading volume.
FE

A committee comprising representatives of Bangladesh Bank (BB) and the Dhaka Stock Exchange (DSE) has already begun working to identify the changes needed for a smooth transition, said DSE Managing Director Nuzhat Anwar. The committee was formed after a DSE delegation met with the central bank's governor at his office.Bangladesh investment opportunities.Bangladesh economic report

The primary task in this transition will be to extend banking hours in alignment with the new settlement cycle.

"We are yet to declare any time to start the T+1 trading cycle. But we are optimistic that it will happen by December this year," Ms Nuzhat said, adding that things were moving positively with the cooperation of the central bank and that she did not see any major obstacle.

The securities regulator is also aware of the progress and will facilitate the introduction of the new settlement cycle by approving amendments to the trade settlement regulations, the DSE chief added.

At present, the DSE operates on a T+2 settlement cycle, which defines the time between when a trade is placed and when it is fully settled - that is, shares and cash transferred - through brokers, the exchange, banks and the depository authority, Central Depository Bangladesh Ltd (CDBL).

To illustrate, consider an investor who purchases shares on a Sunday through a broker under the T+2 cycle. The exchange receives the money from the buyer's broker on Monday through the banking system. The funds are then transferred to the seller's broker the following day, by which time CDBL transfers the shares into the buyer's beneficiary owner's (BO) account. Sunday trades are thus fully settled by Tuesday.

Under a T+1 cycle, the exchange would need to receive funds from the buyer's broker on the same day the shares are purchased. The funds would then be transferred to the seller's broker and the shares credited to the buyer the next day.

For this to work, extending banks' Real Time Gross Settlement (RTGS) hours is essential, as trades are not complete until funds are transferred by banks. Currently, banks settle funds until 4:00pm, a deadline that would need to be extended to accommodate the T+1 cycle - making the central bank's intervention crucial.

"One or two regulations might need changing too. That's not very difficult," Ms Nuzhat added.

Faster settlement will facilitate faster trade turnover. It is also one of the requirements Bangladesh must meet for its frontier market to be upgraded to emerging market status.Bangladesh investment opportunities

"If we consider competition for foreign investments, our competitors - bourses of other countries including those of India - have already made significant progress," Ms Nuzhat said.Market trend analysis

Ironing out risks in the T+1 settlement cycle

Executing trades within the T+1 cycle requires the exchange to receive funds from buyers' brokers on the day of purchase. However, there may be instances of delays in receiving cheques or in their encashment. In such cases, the buyer's broker will have to cover the funds, making capital adequacy a critical requirement for brokers to avoid any disruption in trade settlements.

Md. Ashequr Rahman, managing director of Midway Securities, emphasised the importance of broker capital adequacy for the smooth running of the T+1 cycle.

He also said the T+1 cycle should initially be applied only to stocks with high liquidity. Investors who typically put money into blue-chip stocks of the DS30 index tend to have sufficient funds and financial literacy.

"So, I think, the DSE should apply the T+1 cycle to the stocks in the DS30 index," Mr Rahman said, noting that India too had not introduced the T+1 cycle across all listed companies at once.

The finance minister, in his budget speech, stressed the need for capital market reforms, one of which would be a gradual shift in the settlement cycle from T+2 toward T+1 and eventually T+0.

A backlog of more than Tk5,000 crore in government reimbursements for remittance incentives has persisted for over nine months, putting pressure on commercial banks' liquidity and profitability.

Banks disburse a 2.5% cash incentive to expatriates on remittance inflows on behalf of the government and are later reimbursed through the central bank. However, bankers say the arrears continue to accumulate as these reimbursements remain unsettled.

According to available data, the outstanding amount stood at Tk4,000 crore in December 2025 and has since risen by a further Tk1,000 crore over the past six months. Ten banks alone account for Tk3,701 crore of the unpaid incentives as of June this year.

Liquidity strain and profit pressure

Bankers say they are funding the incentive payments from deposit mobilisations, which is restricting their ability to deploy funds in income-generating assets. As a result, a portion of deposits remains uninvested or is diverted from normal lending operations.

Speaking to TBS, they noted that banks typically use such funds in short-term government securities, where annual returns are estimated at around 10.20%. One private-sector banker said if Tk5,000 crore had been invested in one-year Treasury bills, banks could have earned about Tk383 crore in interest over nine months.

Instead, banks are reportedly financing costs, including deposit interest payments estimated at around Tk300 crore, without generating equivalent returns from the delayed reimbursement funds.

A senior policymaking official at a private bank said the mismatch between funding costs and delayed government payments is eroding profitability and may weaken banks' incentives to mobilise remittances in the coming months.

Rising burden on individual banks

A managing director of a private commercial bank said his institution alone is awaiting nearly Tk700 crore in reimbursement, which he said has significantly affected its liquidity planning and investment decisions. He added that timely payment would have reduced the need to fund incentives from deposits and could have allowed investment in Treasury bills at returns of around 10.20%.

Mohammad Ali, managing director of Pubali Bank, said the outstanding amount is currently recorded as an asset in accounting terms but does not generate income. He warned that prolonged delay could force banks to make provisions if repayment is not secured.

He estimated that full investment in Treasury bills could have generated over Tk500 crore annually in interest income for the banking sector.

Islami Bank Bangladesh, which channels the highest volume of remittance, holds an outstanding incentive claim of approximately Tk1,350 crore up to June.

System-wide concerns over remittance flows

Bankers said the rising volume of remittances has increased the government's incentive burden, while delays in reimbursement have worsened funding stress. They added that banks are increasingly reliant on deposit mobilisation to bridge the gap, putting pressure on balance sheets.

A senior treasury official said reimbursements were previously settled within a month, but are now being released roughly every three months, creating significant strain on liquidity management.

Another banker noted that earlier the scheme operated on an advance funding basis with quicker settlements, but delays have gradually increased over the past one and a half years.

Fiscal constraints and government borrowing

Bankers also linked the delays to broader fiscal pressures, noting that government revenue collection has weakened and borrowing from banks has increased. The government has set a borrowing target of Tk1,12,000 crore from the banking system in the upcoming fiscal year.

Central bank assurances

The issue was actively discussed at a recent bankers' meeting, where bank managing directors raised their concerns directly with central bank leadership.

Bangladesh Bank Governor Md Mostaqur Rahman assured the top executives that the central bank would liaise with the finance ministry to ensure the outstanding dues are cleared within the current fiscal year. Industry insiders expect fund releases to begin in earnest in July.

When contacted, Bangladesh Bank spokesperson and Executive Director Arief Hossain Khan clarified that the matter falls under the purview of the fiscal authority rather than the central bank.

"Since the government is providing the subsidy, the funds will definitely come. There may be a delay, but there is absolutely no chance of non-payment," he said.

Omega’s Constellation watch has been flashed in campaigns, movies and at the Met Gala by stars like George Clooney and Nicole Kidman, turning it into a symbol of luxury and glamour. But with gold prices near record highs struck in January, some such classic watches are being melted down as the value of their metal content outstrips their resale worth.

Used models by the likes of Omega and LVMH’s TAG Heuer are most hit by the trend, according to Reuters interviews with over a dozen traders, industry experts, and investment advisers.

British dealer Jon White of Gold Traders melted down an 18-carat late-1970s Constellation in excellent condition in May, one of dozens of mainstream luxury watches he has had scrapped this year as demand for investment gold has risen.

“Beautiful watch. But in reality, had the customer consigned that to auction, what would they have achieved?” White, who also manages an auction house, told Reuters. The gold content of the Constellation watch, one of many models produced by Swatch-owned Omega, was worth £5,750 ($7,749), 35 percent more than its estimated £4,000-4,500 auction value, White said.

James Lamdin, founder of Watches of Switzerland’s second-hand unit Analog Shift, said melting was “primarily happening with contemporary pre-owned and also with older vintage watches that are not already collectible.”

Spokespersons for Swatch and Rolex said they would not comment for this story. LVMH, Richemont, Patek Philippe and Audemars Piguet did not respond to requests for comment.

LIQUID GOLD

Gold prices surged to a record $5,600 an ounce in January as geopolitical concerns and trade worries pushed investors towards safe-haven precious metals. Gold now hovers around $4,200 per ounce, almost double its 2024 average. The market price for used watches has not moved in the same way, however.

“I find it very sad, because obviously once something has been melted, it’s gone forever,” said Adrian Hailwood, a specialist in horological history.

There are no official figures showing how many luxury watches are being melted. World Gold Council data shows overall gold recycling in the first quarter rose 5 percent to 366 tonnes, while gold jewellery demand rose 31 percent in value to $47 billion.

Watches can hold anything from a sliver of gold to more than 200 grams, meaning their scrap value can run into tens of thousands of dollars. In an Omega Constellation, the gold can be found in the case and the strap.

With gold expected to reach between $5,400 and $6,300 an ounce this year, the pressure to dismantle some watches will continue, especially as traders that resell them must cover costs and the expense of providing a warranty. New watches that are over-produced might also be melted down.

“I’ve seen a lot of totally mediocre watches get melted down,” said Lamdin. “There’s a lot of unsold overstock in the Swiss market. And those watches are basically brand new, unworn, and they’re just getting stripped down... they made too many of them.”

“But when you have something that’s vintage and rare and has some story or some patina, that’s where it becomes a short-sighted tragedy.”

THE RESALE TRAP

High-end brands that tightly manage new production like privately owned Patek Philippe and Rolex command the highest premiums over melt value, three industry experts said.

For some models “the wait lists are astronomical. You’re talking anything from two to eight years,” said Simon Lazarus, head of PR and content at online luxury watch platform Chrono Hunter.

Rolex accounted last year for 61 percent of the sales value of new Swiss watches priced above 3,000 Swiss francs ($3,770), up from 57 percent in 2023 despite lower volumes, according to Vontobel.

Less exclusive brands like TAG Heuer, Breitling and Omega struggle to command high new retail prices, however, as buyers can buy a second-hand timepiece for much less. Models like Omega’s Speedmaster often depreciate sharply once sold, exposing them to scrapping, three experts said.

Higher gold prices motivated retired New York engineer Mitchell Talisman to sell two gold watches and a chain containing a combined 35 grams of gold with 58 percent purity for $2,660 cash in December.

“I’d had a bunch of stuff sitting in a safety deposit box for over 10 years,” he told Reuters.

For some owners however, the idea of selling a watch only for it to be melted by a dealer is too much to bear. “It may be a family piece, it may be their first watch,” said Hailwood. “They don’t like the idea of it being destroyed, so they keep it.”

Bangladesh’s revenue collection has grown more slowly than the economy over the past decade, indicating substantial untapped revenue potential, according to a recent analysis by the Finance Division.

The analysis showed that the country’s average revenue buoyancy -- a measure of how quickly government revenue grows relative to the economy -- stood at 0.93 between fiscal years 2014-15 and 2024-25.

A revenue buoyancy coefficient above 1 indicates that tax collection is outpacing economic growth, reflecting a highly efficient revenue system. Conversely, a coefficient below 1 suggests revenue growth is trailing economic expansion, often because of structural inefficiencies or a narrow tax base.

In its latest Medium-term Macroeconomic Policy Statement (MTMPS) for FY2026-27 to FY2028-29, published last week, the Finance Division said revenue buoyancy had been highly volatile, peaking at 2.10 in FY21 before plunging to 0.15 in FY22. The coefficient fell again to 0.60 in FY25.

“On average it stood at 0.93, indicating revenue growth has structurally lagged behind nominal GDP expansion,” the MTMPS said.

Nominal GDP grew by an average of 11.71 percent annually between FY21 and FY25. Over the same period, actual tax revenue expanded by an average of 11.4 percent
According to the Bangladesh Bureau of Statistics, nominal GDP grew by an average of 11.71 percent annually between FY21 and FY25. Over the same period, actual tax revenue expanded by an average of 11.4 percent, the Finance Division said.

“This persistent trend indicates that revenue collection is not keeping pace with economic growth, revealing the existence of substantial untapped revenue potential,” the Finance Division said.

The division suggested a strategic shift towards digital integration and administrative reforms to align revenue mobilisation more closely with the nation’s trajectory towards a trillion-dollar economy.

The MTMPS also compared Bangladesh’s performance with neighbouring and peer countries in South and Southeast Asia, highlighting the country’s relatively weak revenue mobilisation.

While comparable emerging economies have expanded fiscal buffers alongside economic growth, Bangladesh continues to operate with a narrow revenue base and low collection efficiency, the report said.

The gap became more pronounced in 2025. Bhutan recorded a revenue-to-GDP ratio of 27.8 percent, followed by India at 21 percent, Myanmar at 20.3 percent, Nepal at 20 percent and Vietnam at 19.9 percent.

Bangladesh’s ratio stood at just 7.9 percent that year.

“This persistently low taxation level indicates that structural reform in taxation policy and administration is required so that taxes can be more efficiently collected from potential revenue sources.”

The MTMPS said a large traditional agricultural sector and an extensive informal economy outside the formal tax net continue to pose major challenges to effective tax administration.

“Also, the absence of tax administration-wide digitalisation and low tax morale make it very difficult for the tax administration to perform effectively.”

The report noted that revenue-to-GDP ratios in Pakistan, Cambodia and Sri Lanka also exceed Bangladesh’s, underscoring the scope for greater revenue mobilisation and the need to tap underutilised fiscal resources.

The MTMPS highlighted “a significant and persistent gap” between the number of Taxpayer Identification Number (TIN) holders and actual income tax return filings.

Although the number of registered TIN holders rose to 1.2 crore in FY25, compliance remained weak. Only 46 lakh returns were filed, meaning nearly 62 percent of TIN holders failed to submit returns, resulting in a record compliance gap of 74 lakh taxpayers.

However, a positive shift is emerging in FY26, as mandatory online filing has driven a 24.3 percent increase in submissions as of March. The trend suggests that while systemic inertia persists, digital enforcement is becoming a key driver of improved compliance and a more disciplined tax culture.

The National Board of Revenue currently generates 88 percent of total tax revenue. Indirect taxes -- including VAT, supplementary duty, customs duty and other levies -- account for 65.6 percent of the NBR’s collections.

Direct taxes, led primarily by income tax, contribute the remaining 34.4 percent, underscoring the tax system’s continued reliance on consumption-based indirect taxation.

The National Board of Revenue (NBR) is counting on business expansion, a broader tax net, digitalisation and a harder crackdown on evasion to meet its proposed Tk 6.04 lakh crore revenue collection target for FY2026-27.

Speaking at an event on the proposed Finance Bill yesterday, NBR Chairman Abdur Rahman Khan said businesses are passing through a tough time due to lingering impacts of wars and the pandemic.

“The government wants to raise tax collection and create more jobs by stimulating the economy, so NBR tried to address the problems of entrepreneurs,” he said at the programme organised by the Economic Reporters’ Forum in Dhaka.

The proposed target for NBR is about 20 percent higher than the current year’s original target of Tk 5.03 lakh crore, which was later revised to Tk 5.54 lakh crore.

The higher goal for FY27 arrives as the board is faced with a huge shortfall in the current year. Provisional NBR data shows the board collected Tk 3.27 lakh crore through April and needs another Tk 2.27 lakh crore by June 30 to meet its FY26 goal. NBR has failed to meet its goal for 14 consecutive years.

“We have taken many bold steps and we did not consider whether the step will reduce tax collection, but we thought whether it is justified,” the NBR chief said in response to a question regarding how the board will meet its target next year, especially considering the government has proposed tax exemptions for several sectors.

He said if businesses grow as expected, tax collection will rise across all fronts.

The board will simultaneously intensify its drive against leakages to ensure lower evasion, not just higher rates, drives collection growth, he added.

He cited the tobacco sector, the NBR’s single largest revenue source, as a concrete example.

The board plans to introduce “QR and AR codes” on every cigarette packet, allowing consumers to scan and verify whether tax has been paid.

The measure could yield an additional Tk 7,000 crore from the sector alone, he said, with the system to be gradually extended to other products.

On digitalisation, the NBR has simplified and moved the VAT submission process online and digitised corporate tax filing.

“So we will track everybody easily — whether anyone is evading tax,” the chairman said.

He added that by benchmarking against compliant taxpayers within each sector, the system will more readily flag those who are not.

For small and marginal VAT payers, the NBR is introducing a flat-rate VAT calibrated by area and business type, removing the need to maintain detailed accounts – a measure aimed at pulling informal traders into the net without burdening them with compliance costs.

Snehasish Barua, a partner at Snehasish Mahmud & Co, Chartered Accountants, welcomed the business-friendly measures in the budget but urged full implementation and further reductions in individual and corporate tax rates.

The proposed FY27 budget projects a total revenue collection of Tk 6.95 lakh crore, including the NBR’s target. Historically, revenue mobilisation has been one of the country’s weakest policy areas and Bangladesh’s tax-GDP ratio remains among the lowest in Asia.

The event was also addressed by ERF President Doulot Akter Mala, NBR first secretaries Jafar Imam and Md Tarek Hasan, among others.