The equity benchmark index failed to sustain last week's rebound, shedding some of its gains to close the holiday-shortened week lower as persistent domestic and geopolitical uncertainties weighed on investor confidence, triggering broad-based sell-offs and curbing risk appetite despite the government's continued focus on economic development.
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The week began on a subdued note, with the benchmark index struggling to hold above the 5,900-point mark as investor sentiment remained fragile.

The central bank's first policy rate cut in nearly two years failed to provide the boost investors had hoped for, according to market analysts.

Selling pressure intensified amid persistent domestic energy shortages and heightened tensions in the Middle East, adding to market uncertainty. Consequently, the market remained largely range-bound despite monetary easing and government measures to address the fuel crisis.

Bargain hunters briefly returned to selected momentum-driven stocks and insurance issues, helping the market recover some of its earlier losses. However, the rebound lacked sufficient momentum to lift the broader market sustainably, according to a market review by EBL Securities.

Meanwhile, the regulator's guidelines on mutual fund conversion revived buying interest in the sector, which emerged as one of the week's strongest performers, it said.

Nevertheless, investors remained largely cautious towards the end of the week. Profit-taking, subdued risk appetite and persistent uncertainty outweighed selective buying interest, leaving the market lower for the week.

Subsequently, of the four trading sessions during the week, three sessions remained almost flat while the last session ended sharply lower. Wednesday was a public holiday due to July Mass Uprising Day.

DSEX, the benchmark index of the Dhaka Stock Exchange (DSE) finally settled the week more than 34 points or 0.59 per cent lower at 5,861 points. It gained 91 points in the previous week.

The DS30 index, which tracks blue-chip stocks, fell 25 points to 2,192, and the Shariah-based DSES index went down 14 points to 1,181.

Selective heavyweight stocks, including British American Tobacco Bangladesh (BATBC), Beximco Pharmaceuticals, Islami Bank, Al-Arafah Islami Bank and UCB accounted for nearly two-thirds of the benchmark index's weekly loss.

Trading activity, however, remained resilient. While total turnover on the Dhaka bourse stood at Tk 47.27 billion during the week, down from Tk 52.99 billion a week earlier, average daily turnover rose 11.5 per cent to Tk 11.81 billion from Tk 10.59 billion in the previous week, as this week saw four trading sessions instead of regular five.

Textile sector accounted for the largest share of weekly turnover at 22.1 per cent, followed by general insurance with 14 per cent and pharmaceuticals with 11.5 per cent.

Market breadth was positive, as 188 issues gained, 179 declined and 22 remained unchanged on the DSE.

Sectoral performance was mixed during the week. Mutual funds led the gainers with a 4.9 per cent rise, followed by general insurance at 3.0 per cent and life insurance at 2.9 per cent.

On the other hand, food sector recorded the steepest decline, falling 2.8 per cent, followed by ceramics at 1.6 per cent. Cement stocks also came under pressure, declining 1.3 per cent during the week.

Small-cap stocks kept dominance on the turnover list with Sharp Industries PLC becoming the most-traded stocks, with shares worth Tk 300.3 million changing hands, followed by Summit Alliance Port Limited, Malek Spinning Mills, Saiham Textile Mills and ACME Pesticides.

Fareast Finance & Investment Limited was the week's top gainer, soaring 31.60 per cent while S. Alam Cold Rolled Steels Ltd. was the worst loser, shedding 9.30 per cent.

The Chittagong Stock Exchange (CSE) also ended the week lower with its All Share Price Index (CASPI) shedding 35 points to settle at 15,725 while the Selective Categories Index (CSCX) fell 36 points to close at 9,581.

High taxes and weak returns are discouraging investment in Bangladesh's travel, tourism and aviation sectors despite their strong growth potential, experts said at the launch of the Travel and Tourism Development Centre (TTDC) at Hotel InterContinental Dhaka yesterday (8 August).

Policy gaps, limited investment, weak coordination and institutional challenges are also holding back the industry despite the country's rich tourism assets and rising demand, they said.

The newly launched TTDC aims to promote sustainable development of the tourism, hospitality and aviation sectors through public-private collaboration, providing a platform for policy dialogue, knowledge sharing, industry cooperation and advocacy, while strengthening Bangladesh's international tourism positioning.

Delivering the keynote, TTDC executive committee member and ShareTrip co-founder and CEO Sadia Haque said barriers must be addressed to make sector investment more viable.

"Bangladesh has a strong story to tell, but we are not communicating that story effectively," she said, adding that adverse travel advisories discourage international visitors.

There have, however, been positive developments, Sadia said. In July 2026, the US lowered its travel advisory for Bangladesh from Level 3 to Level 2, while Japan reduced its advisory from Level 2 to Level 1.

Civil Aviation and Tourism Minister Afroza Khanam called for travel, tourism, aviation and hospitality stakeholders to work together to bring the industry up to international standards.

The government, working under the prime minister's directives, is taking steps towards that goal, she said, expressing hope that TTDC would provide an important platform.

Tourism currently contributes around 3% of Bangladesh's gross domestic product, and the government aims to raise this to 6-7%, Khanam said. She urged greater private-sector coordination and participation in sustainable development, assuring stakeholders of policy support and necessary assistance.

She also said the sector had seen little significant development over the past 17 years, but the current government was taking initiatives to harness its untapped potential.

TTDC President Kazi Wahidul Alam said the organisation's ultimate goal was an integrated travel ecosystem with efficient airports, competitive airlines and seamless visitor experiences.

Government, private-sector and investor collaboration is essential to unlock Bangladesh's potential, create opportunities for young people and strengthen its global image, he said.

TTDC executive committee member Shahid Hamid said tourism already contributes nearly 3% of gross domestic product, equivalent to about $10 billion, and supports more than 20 lakh jobs across hotels, airlines, restaurants and local tourism services.

These services span more than 30 districts with recognised tourist destinations. Despite being a significant industry, much of its potential remains untapped, he said, calling for a stronger platform to bring the country's tourism attractions together and stressing the private sector's leading role.

Bida Chairman Ashik Chowdhury said Bangladesh had never properly attempted to build a strong national brand despite having the resources.

Developing and promoting one would require around $8 million-$15 million annually, compared with an Annual Development Programme of about $25 billion and a total government budget of around $78 billion, he said.

The issue is now receiving high-level attention, Ashik said, citing a meeting last Saturday with the prime minister, several ministers and private-sector representatives on "Brand Bangladesh". "We worked through the issues and now have a strategy in place," he said.

CPD Research Director Khondaker Golam Moazzem called for greater private-sector participation supported by appropriate policies and institutional structures. Without stronger private-sector involvement, the sector cannot move forward effectively, he said.

The Ministry of Civil Aviation and Tourism received around Tk1,800 crore this year, but most of the allocation is for local airport infrastructure, leaving very little for broader travel and tourism development, he added.

The minister said TTDC's launch was an important step, providing a permanent forum for public-private collaboration and linking government ambitions with the infrastructure, expertise and cooperation needed for tourism development.

Bangladesh's two leading apparel sector trade bodies - Bangladesh Garment Manufacturers and Exporters Association (BGMEA), and Bangladesh Textile Mills Association (BTMA) - have joined hands to help achieve the country's $100 billion apparel export target.

To this end, the two organisations signed a Memorandum of Understanding (MoU) at a ceremony held at the Gulshan Club in Dhaka today (4 August).

BGMEA President Mahmud Hasan Khan Babu and BTMA President Showkat Aziz Russell signed the MoU on behalf of their respective organisations.

Under the agreement, the two associations will jointly organise the Bangladesh International Textile and Apparel Machinery Exhibition (BITMA), which will be held in December.

The organisers said the exhibition and the MoU are significant steps toward creating a stronger, more innovative, environmentally friendly and technologically advanced platform for Bangladesh's textile and ready-made garment (RMG) sector.

They added that the primary objective of the international exhibition is to establish Bangladesh as a globally recognised hub for sustainable textile and apparel manufacturing by integrating state-of-the-art machinery, artificial intelligence (AI) technologies, fashion trend showcases, networking opportunities, technology transfer, skills development, sustainability initiatives, investment promotion and international partnerships across the textile and RMG industries.

Speaking at the event, BGMEA President Mahmud Hasan Khan Babu said that although differences of opinion occasionally arise between garment and textile entrepreneurs, both sectors share the same goal.

"In some cases, issues arise regarding Proforma Invoices (PIs). …A joint arbitration team may be formed to ensure that neither party dishonours the Proforma Invoice (PI) or the Letter of Credit (LC)," he said.

BTMA President Showkat Aziz Russell said the association's biennial textile machinery exhibition, previously known as DTG, would become a larger, more meaningful and internationally recognised event through the partnership with BGMEA.

Bangladesh's economic outlook remains broadly optimistic following ongoing structural reforms, greater policy flexibility and easing global energy prices, according to a latest central-bank assessment.

"Measures to revitalise distressed industries, reopen closed factories, and expand access to bank financing through targeted credit stimulus packages are expected to support job creation and stronger economic development over the medium term," says the Bangladesh Bank (BB) in its latest 'Bangladesh Bank Quarterly (BBQ)'.

The observations came as the central bank unveiled a Tk 600-billion stimulus package recently to support the struggling private sector, encourage investment and accelerate economic recovery.

The package, unveiled by BB Governor Md Mostaqur Rahman on May 23, aims to generate around 2.5 million direct and indirect jobs through sector-specific refinancing schemes and targeted credit support.

The January-March BBQ, however, said the third quarter (Q3) of the outgoing fiscal year (FY) 2025-26, presents a mixed economic picture, with the real sector facing near-term headwinds from broad-based sectoral moderation and persistent inflation, while the external sector shows relative resilience.

"The implementation of the proposed stimulus package remains slow, mainly due to inadequate utility support, particularly shortages of power and energy," Md. Ezazul Islam, Director-General of the Bangladesh Institute of Bank Management (BIBM), told The Financial Express in response to a query.

Dr Islam, a former executive director of the BB, said the government should adopt a pragmatic policy to ensure an adequate supply of gas and electricity, especially for the private industrial sector, to facilitate investment and economic recovery.

Bangladesh's economy showed slower momentum in the Q3 of FY'26, as real GDP (gross domestic product) growth moderated amid a broad-based slowdown across all three major sectors -- agriculture, industry and services, according to the BB assessment.

Inflation, however, remained elevated, warranting the continuation of a contractionary monetary-policy stance, the BBQ says, adding that the external sector demonstrated resilience, underpinned by record-high remittance inflows, despite ongoing geopolitical tensions in the Middle East.

Meanwhile, the banking sector continued to undergo structural reforms, although sustained efforts would be required to translate these initiatives into tangible improvements in overall financial health, the central bank has explained.

The quarterly health check on the economy also shows that the country's banking sector continued to navigate a challenging landscape in the Q3 under consideration, marked by deteriorating asset quality, persistent capital shortfalls, and weak profitability.

The gross non-performing loan (NPL) ratio rose to 32.26 per cent in the Q3 of FY'26 from 30.60 per cent in the previous quarter.

"Despite these challenges, funding and liquidity conditions improved, supported by stable deposit growth and a higher excess Statutory Liquidity Ratio (SLR)," the BBQ reads.

This improvement reflects subdued credit demand, cautious lending, and a stronger preference for risk-free government securities, it explains.

The central bank also has said ongoing reform initiatives and the implementation of risk-based supervision (RBS) are expected to strengthen market discipline, enhance sector resilience, and support financial stability over time.

On the other hand, inflationary pressures persisted through the Q3 of FY'26. Point-to-point headline inflation edged up to 8.71 per cent in March 2026 from 8.49 per cent in December 2025, driven mainly by stronger consumer demand during Holy Ramadan and Eid, as well as global supply disruptions stemming from conflicts in the Middle East.

Non-food inflation eased marginally to 9.09 per cent in March 2026 from 9.13 per cent in December 2025, while food inflation rose to 8.24 per cent from 7.71 per cent, reflecting higher prices for meat, fish, fruits, vegetables, and spices.

"The wage rate index rose slightly to 8.09 per cent in March 2026 from 8.07 per cent in December 2025, but remained below the inflation rate, leaving real wages in negative territory and continuing to erode household purchasing power," the BBQ explains.

Describing developments in the external sector, the BBQ concludes that Bangladesh's external outlook remains cautiously optimistic, supported by robust remittance inflows, improved financial-account performance and continued exchange-rate stability.

The world is on the verge of another bout of food inflation as wars in Iran and Ukraine along ​with El Nino create a perfect storm of higher costs and lower crop yields, the chief economist of the ‌United Nations Food and Agriculture Organization said.

Food prices were a key driver of the 2022 global inflation surge but have been relatively benign so far this year, even tempering in some places the surge caused by high energy costs.

This calm is likely to be temporary, however, as higher crude oil ​prices, the loss of fertiliser from the Gulf region, the shortage of diesel in some parts of the world ​and extreme weather are feeding through to costs and will show up in consumer prices, even ⁠if with a delay.

Costs seen accelerating by year-end, next year

"I expect that commodity prices will start to increase more now ... and ​food prices will start increasing by the end of the year, and next year for sure they will increase more," Maximo Torero ​told Reuters in an interview.

"The transmission from the commodity to the final food price is around three to six months," he said.

Although some commodity prices, such as wheat, maize and rice, have increased in recent months, most still reflect relatively good harvests, rather than likely difficulties in the coming year.

"The ​Strait of Hormuz is a problem that affects all the inputs of agricultural commodities, agricultural systems," Torero said. "Brent oil, because it's ​used for pumping, packaging, processing, and transportation. And natural gas because it's used for fertilisers."

Meanwhile, the damage inflicted by Ukraine on Russia's oil and ‌gas infrastructure curtails the export market for diesel and natural gas, both of them key inputs in food production.

Since commodity prices are global, this inflicts pain across the world, even if richer countries have more cash to buffer producers.

"You're hearing this in Europe, in the U.S., Brazil and in Asia," Torero said. "Tight margins are putting stress in planting decisions."

Indeed, even in the U.S., which is self-sufficient for ​most key inputs, without federal ​assistance farmers growing nine principal ⁠crops may lose $32 billion in 2027, the American Farm Bureau Federation, an industry lobby group, said.

On a per-acre basis, every crop analysed is projected to remain below breakeven in 2027, it said.

Global ​wheat and corn planting was already cut in the first three months of the Iran war, ​and some US ⁠producers have shifted to soybeans, because they require lower fertiliser inputs.

Australia, one of the world's top crop exporters, recently said that winter crop production is seen down by 21% in part because of a significant increase in both fuel and fertiliser prices and uncertainty over the ⁠availability of ​key inputs.

Meanwhile, this year's El Nino weather phenomenon is likely to be especially ​strong, significantly shifting rainfall patterns, likely impacting commodity prices and potentially pushing tens of millions into acute food insecurity.

The monsoon in India is already delayed, and below-average rainfall ​is seen this month, a potential hit for rice production that could impact global commodity costs.

The Bangladeshi taka remained one of the most stable currencies in South Asia and neighbouring economies over the past year, depreciating by just 0.59 percent against the US dollar between March 2025 and March 2026, according to the Bangladesh Bank quarterly report.

The central bank’s latest data showed that only Cambodia performed slightly better, with its currency weakening by 0.44 percent during the period.
Among the peer countries, India experienced the sharpest depreciation, with the rupee losing 8.94 percent of its value against the US dollar.The Sri Lankan rupee depreciated by 5.11 percent, followed by the Philippine peso at 3.70 percent and the Indonesian rupiah at 2.67 percent.

In contrast, the Chinese yuan appreciated by 5.14 percent, making it the strongest-performing currency among the countries compared. The Pakistani rupee also posted a modest appreciation of 0.39 percent against the US dollar.

Officials at the central bank said that the relatively limited depreciation of the taka came after Bangladesh Bank adopted a more market-based exchange rate regime and tightened monetary and foreign exchange management to reduce volatility in the currency market.

In May last year, Bangladesh adopted a market-based exchange rate regime to meet a condition by the International Monetary Fund (IMF).

The central bank has also been able to rebuild foreign exchange reserves through stronger remittance inflows and improved export earnings, helping ease pressure on the local currency.

After the fall of the Awami League-led government in August 2024, remittance inflows continued to rise, and the BB was able to build its forex reserves, according to BB officials.

As of July 30, the foreign exchange reserves (BPM6) stood at $31.60 billion, up from $24.86 billion during the same period last year, according to Bangladesh Bank data.

Over the past year, the exchange rate of the US dollar against the local currency has hovered between Tk 122 and Tk 123, indicating a stable currency.

Industry insiders said that a relatively stable exchange rate can help contain imported inflation by reducing the cost of essential imports such as fuel, food, and industrial raw materials.

However, in recent months, the US dollar has continued to strengthen against the taka amid increased demand for foreign currency to settle import bills.

On August 4, the interbank exchange rate of the US dollar stood at Tk 123.81, up from Tk 123.69 per dollar a few days earlier, according to Bangladesh Bank data.

Bank Asia PLC has received regulatory clearance to double its authorised share capital to Tk3,000 crore, a strategic move that provides the lender with significant room for future capital expansion.

According to a disclosure filed with the Dhaka Stock Exchange (DSE) yesterday, the bank's authorised capital has been enhanced from Tk1,500 crore – comprising 150 crore ordinary shares – to Tk3,000 crore, divided into 300 crore ordinary shares with a face value of Tk10 each.

The enhancement has been duly approved and certified by the Registrar of Joint Stock Companies and Firms (RJSC). Consequently, the bank has amended the relevant clauses of its Memorandum and Articles of Association to reflect the new capital structure.

Currently, Bank Asia's paid-up capital stands at Tk1,391.50 crore, meaning the bank now has the flexibility to more than double its existing paid-up base through rights issues or bonus shares in the coming years, according to the market insiders.

The capital restructuring comes at a time when the bank is navigating a challenging earnings period. Bank Asia reported that its consolidated earnings per share (EPS) fell by 16% year-on-year during the first half (January-June) of 2026. The EPS settled at Tk1.77, down from Tk2.11 in the corresponding period of 2025.

The bank attributed the decline primarily to a surge in interest expenses which outpaced interest income, coupled with a contraction in investment income and reduced earnings from commission, exchange, and brokerage services.

Despite the drop in profitability, the bank's balance sheet showed resilience in other key metrics. On a consolidated basis, its Net Asset Value (NAV) per share rose to Tk26.92 at the end of June 2026, compared to Tk24.33 a year earlier.

This growth was driven by an increase in shareholders' equity, supported by higher statutory reserves and the transfer of startup funds from other liabilities.

Furthermore, the bank's net operating cash flow per share (NOCFPS) witnessed a healthy jump to Tk48.77 from Tk37.60, largely due to increased cash inflows from customer deposits and institutional borrowings.

Looking back at the previous calendar year, Bank Asia reported a total net profit of Tk407.25 crore for 2025, yielding an EPS of Tk3.18.

To reward its investors, the bank had disbursed a 17% dividend for the year, consisting of an equal split of 8.5% in cash and 8.5% in stock.

Following the announcement of the capital enhancement yesterday, investor reaction remained neutral on the bourse, with the bank's share price closing unchanged at Tk18 on the Dhaka Stock Exchange.

Bangladesh's overall external assistance confirmation dropped by 37 per cent in the 2025-26 fiscal year, with India not committing even a single penny, officials say.

The lowest-ever aid confirmation by two major development partners - the World Bank and Japan - also affected overall confirmation, they say.

According to the Economic Relations Division (ERD), the development partners made a combined aid commitment of $5.24 billion in the last fiscal year, 37 per cent down from $8.32 billion in FY25.

Bangladesh's largest multilateral donor -- the World Bank -- made the lowest commitment of $820.25 million between July 2025 and June 2026, while the largest bilateral one -- Japan -- committed $314 million.

Other key donors, including China and the Asian Infrastructure Investment Bank (AIIB), committed moderate amounts of $279.84 million and $250 million, respectively.

The second largest multilateral donor -- the Asian Development Bank (ADB) -- made an impressive commitment of $2.685 billion.

"Since aid commitment by key donors, including the World Bank, Japan, China, India, and AIIB, was poor, overall foreign assistance confirmation dropped," says a senior ERD official.

During the previous regime of Sheikh Hasina, India committed a total of approximately $7.36 billion of aid through multiple Lines of Credit (LoCs), grants, and defence loans to fund major infrastructure, connectivity, and security projects in Bangladesh.

It extended an initial $1.0 billion line of credit covering 21 development and transport projects in 2010.

A fresh commitment of $2.0 billion was added to bridge trade gap and improve connectivity infrastructure in FY16 under LoC-II and a massive $4.5 billion under LoC-III in 2017.

The ERD official says not only aid commitment dropped in FY26, but foreign assistance disbursement also decreased.

According to the ERD data, all development partners released $8.07 billion worth of loans and grants in FY26, $494.29 million down from $8.56 billion in FY25.

Of the disbursed aid, the World Bank provided the largest amount of $2.07 billion, ADB $1.91 billion, Russia $1.047 billion, Japan $795.32 million, AIIB $693.13 million, and China $532.88 million.

Meanwhile, Bangladesh had to repay the record highest $4.494 billion against its outstanding debts to the bilateral and multilateral lenders in FY26, the ERD data shows.

Of the amount, the government had to repay $1.54 billion in interest and $2.953 billion in principal.

Agricultural lending by Bangladesh’s banking sector rose nearly 15 percent in fiscal year 2025-26, exceeding the central bank’s annual target, driven by strong lending from specialised and private commercial banks.

Banks disbursed Tk 42,834.16 crore in agricultural and rural credit during the year, up 14.76 percent from Tk 37,326.52 crore a year earlier and equivalent to 109.83 percent of Bangladesh Bank’s Tk 39,000 crore lending target for the country’s 58 participating banks, according to the central bank’s latest agricultural and rural credit report.
Private commercial banks accounted for the largest share of total lending at 43.15 percent, followed by specialised banks, while Islamic banks contributed 14.15 percent.

Specialised banks posted the strongest performance against their targets, disbursing Tk 12,615.57 crore, or 123.4 percent of their allocation.

State-owned commercial banks achieved 109.89 percent of their target, private commercial banks 108.05 percent and foreign commercial banks 104.05 percent.

Islamic banks were the only category to miss their target, disbursing Tk 6,059.32 crore, or 94.37 percent of the planned amount.

The report also highlighted a mismatch between policy priorities and the distribution of credit across sectors. Crop production received 47.32 percent of total lending, below the policy target of 55 percent, while livestock and poultry accounted for 26.38 percent, exceeding the 20 percent target. Fisheries and non-farm rural activities also surpassed their respective allocations.

By contrast, lending for irrigation and agricultural machinery accounted for just 0.93 percent of total disbursement, less than half the policy target of 2 percent.

Agricultural loan recovery rose 19.99 percent year-on-year to Tk 45,626.93 crore. Recoveries increased across all bank categories except Islamic banks, the report said.

Asset quality also improved overall. Overdue agricultural loans fell 8.43 percent year-on-year to Tk 19,807.33 crore at the end of June, while classified loans declined 5.92 percent to Tk 18,578.47 crore.

Foreign commercial banks more than doubled their loan recoveries from the previous fiscal year and reported no overdue or classified agricultural loans for a second consecutive year.

Bangladesh Bank said the stronger lending performance signalled a positive outlook for agricultural finance. However, it warned that the large stock of overdue and classified loans remained a key challenge, underscoring the need to prioritise loan recovery and strengthen the management of defaulted loans.

India’s central bank kept interest rates unchanged on Wednesday as it waits to see whether volatile oil prices caused by the Iran war feed wider inflationary pressures.

The Reserve Bank of India (RBI) said the benchmark repurchase rate, the level at which it lends to commercial banks, would remain at 5.25 percent after a unanimous vote by a six-member panel.

Emerging and frontier market central banks from Indonesia to Sri Lanka have raised rates to curb price rises and boost their currencies since the outbreak of the Middle East crisis in February.

Limited and staggered fuel price hikes by the Indian government have so far shielded citizens from the worst of the war’s economic impact but there are signs that this may not hold.

Retail inflation rose to 4.4 percent in June -- breaching the central bank’s medium target of four percent for the first time in 17 months -- though it remains within RBI’s 2-6 percent tolerance band.

Retail inflation rose to 4.4 percent in June -- breaching the central bank’s medium target of four percent for the first time in 17 months
Bank governor Sanjay Malhotra said economic growth was supported by “resilient domestic demand” and inflation was not “broad-based” yet.

“The MPC (Monetary Policy Committee) noted that even though headline inflation is projected to increase, it is primarily on account of supply side pressures caused by food and fuel. It is not getting broad-based,” Malhotra said in a televised address from the financial capital Mumbai.

“There is a need for greater clarity to emerge, especially regarding inflation, its path and composition before taking any policy action.”

Analysts said Malhotra’s speech had a dovish tinge.

“What stood out just as much as the tone itself was what was missing from it,” Sneha Pandey of Quantum AMC said. With the war still unresolved and already influencing both oil markets and yields, there were ample reasons for the central bank to express greater concern, she said.

“It didn’t... and that comfort is a genuine positive for equities.” Adding to the central bank’s calculations is pressure on the Indian rupee, which slid to a record low before its June policy meeting.

Instead of raising rates, the RBI chose to announce a range of moves aimed at wooing dollar inflows, including a deposit scheme for the Indian diaspora.

These measures have brought in more than $40 billion since June, according to central bank data released last Saturday, boosting the RBI’s forex buffers.

While the steps have helped stop the rupee’s losses, the currency has faced fresh challenges.

India, the world’s third-largest buyer of oil, normally sources about half of its crude through the Strait of Hormuz, which has been effectively closed since the beginning of the war in February.

Analysts say this makes New Delhi among the most vulnerable economies to a global energy shock, as higher crude and fertiliser prices drive up India’s import bill.

The United ​States has ‌removed counterterrorism ​sanctions ​from two aircraft ⁠and ​three airlines ​with links to ​Iran's ​Islamic Revolutionary Guard ‌Corps, ⁠according to details posted ​to ​the ⁠US ​Treasury Department's ​website ⁠on Wednesday (5 August).

Robi Axiata PLC, one of the country's largest telecom operators, said it has invested Tk9,331.36 crore in network expansion over the past five years since making its capital market debut in 2020, boosting its digital infrastructure and driving operational growth.

Supported by this investment, the company has delivered consistent profit growth since listing, enabling it to pay handsome dividends to shareholders.

Robi raised Tk523.79 crore through its initial public offering (IPO) in late 2020.

Although it initially skipped a dividend payout for that year, it later revised its decision and declared a 5% cash dividend. Since then, the operator has consistently paid dividends, with payouts growing alongside its increasing profitability.

At a media briefing titled "Five Years in the Stock Market: Governance Excellence Driving Performance" held at a city hotel, Robi said sustained investment, stronger corporate governance, and an expanding digital business have driven steady financial and operational growth.

Robi Managing Director and CEO Ziad Shatara presented an overview of the company's business performance since its capital market debut, highlighting strong commercial growth and an expanding subscriber base.

He said the company has maintained consistent revenue and profit growth while expanding its subscriber base, digital services, and network infrastructure over the past five years.

Highlighting its sustained financial performance, Shatara noted that revenue grew 1.2 times from 2021 to reach Tk9,992 crore in 2025.

Over the same period, earnings before interest, taxes, depreciation, and amortization (EBITDA) expanded to Tk4,979 crore, up 1.5 times, while profit after tax jumped to Tk937 crore in 2025, up 5.2 times from Tk180 crore in 2021.

Shatara added that the operator remains the fastest-growing mobile network operator in the market.

"In the second quarter of 2026, Robi posted a 6.1% revenue growth while competitors contracted by 1.2%. Similarly, in the first half of 2026, Robi achieved a 7.1% revenue increase compared to a 0.7% decline across the rest of the industry," he said.

The Robi CEO added that the operator's market share in total sectoral revenue increased from 29.3% in 2021 to 31.3% in 2025. Over the 2021–2025 period, the operator captured 44.7% of the overall industry revenue growth.

Subscriber base

Since its listing in 2020, Robi added 76.7 lakh subscribers, 1.1 crore internet users and 2.55 crore 4G users. During this post-listing period, the mobile operator expanded its 4G sites from 13,173 to 19,646 nationwide, while expanding its total spectrum holdings 3.4 times to 124 MHz.

The infrastructure investment accelerated data adoption across the network. By the second quarter of 2026, Robi's active subscriber base expanded to 5.86 crore.

Internet users accounted for 78.9% of its total subscribers, with 4G users making up 72% – the highest ratios in Bangladesh's telecommunications industry. Its monthly data consumption per user surpassed 10 GB, the operator said in a press release.

The growth in data usage shifted the company's revenue mix, with data services accounting for 44.4% of total revenue in H1 2026, up from 36% in 2020.

The operator's capital strategy also prioritized domestic procurement. Robi's spending on local vendors rose from 57% of total procurement in 2020 to 78.1% in 2025.

Additionally, the company channelled over Tk280 crore to local software creators through its application platform, bdapps.

Dividend and profit

Between 2021 and H1 2026, Robi generated Tk2,819.13 crore in profit after tax and distributed Tk2,854.67 crore in dividends to shareholders.

Profit after tax for the first half of 2026 grew by 29% compared to the same period in 2025, while its EBITDA margin reached 54.2%.

Shatara said, "Our digital ecosystem has also expanded beyond telecommunications. bdtickets now serves more than 80,000 travellers daily through a network of over 150 bus operators. Our enterprise business, Axentec, supported by RedDot Digital's technology capabilities and global partnerships, is helping organisations accelerate their digital transformation, while RedDot has further strengthened Robi's in- house technology capabilities."

He continued, "Artificial intelligence has become an increasingly important enabler across our business. It helps optimise network planning, personalise products and services, and improve customer experience. With 2.28 crore customers using our self-care applications, AI enables us to respond more efficiently and deliver more personalised digital experiences.

"Al will play an even bigger role in our business in the years ahead. Throughout this journey, robust governance has provided the foundation for sustainable growth. We have continued to strengthen our data governance to protect customer privacy, guard against cyber threats and ensure AI is developed and deployed responsibly."

He said as a technology company, the operator values agility and innovation. "Equally, we believe strong governance is one of our core strengths. Four empowered Board committees provide the oversight that keeps us focused on our purpose of advancing Bangladesh digitally."

Robi listed on the Dhaka and Chattogram stock exchanges in late 2020 in what was the country's largest-ever IPO.

Axiata Group Berhad holds a 61.82% majority stake in the company, Bharti Airtel holds 28.18%, and public shareholders hold the remaining 10%.

The Dhaka Stock Exchange (DSE) extended its winning streak for a fourth consecutive month in July, driven by a spectacular rally in mutual funds, encouraging corporate earnings and a series of market-friendly policy initiatives that strengthened investor confidence.

The benchmark DSEX index gained 132 points, or 2.3%, to close at 5,895, according to Sheltech Brokerage Limited's monthly market review. The blue-chip DS30 index rose 1.78% to 2,217, while the Shariah-based DSES advanced 2.32% to 1,195.

Market participation also improved. Average daily turnover increased 4.03% month-on-month to Tk1,254 crore, while average daily trading volume rose 9.57% to 425.5 million shares.

Mutual funds lead rally

Mutual funds emerged as the top-performing sector in July, with market capitalisation surging nearly 22% - the highest among all sectors.

Sheltech Brokerage attributed the rally to growing optimism over government plans to reform the long-neglected mutual fund industry. Investors accumulated fund units in anticipation of measures aimed at improving institutional participation and long-term valuations.

Trading activity reflected the enthusiasm. Average daily turnover in the sector jumped 189% month-on-month to Tk42.87 crore.

Among listed securities, EXIM Bank First Mutual Fund topped the gainers with a 91.43% rise to Tk6.70, while MBL First Mutual Fund climbed 87.8% to Tk7.70. NCCBL Mutual Fund One advanced 65.91% and PF First Mutual Fund gained 62.5%.

Analysts said the rally was further supported by the FY27 budget, which removed the Tk5 lakh investment ceiling previously required to qualify for tax rebates.

Broad-based gains

The rally extended beyond mutual funds. Textile stocks posted the second-highest sectoral gain at 10.81%, followed by food and allied (7.46%), jute (6.34%), travel and leisure (6.10%), tannery (5.92%) and non-bank financial institutions (5.68%).

Textiles also dominated trading, accounting for 17.48% of total market turnover, followed by insurance (14.28%) and pharmaceuticals and chemicals (11.44%).

Analysts said the broad participation suggested improving investor sentiment rather than speculative buying in a few sectors.

Outperforming regional peers

Bangladesh's stock market outperformed several regional peers despite geopolitical tensions and global market uncertainty.

Among South and Southeast Asian markets, only Indonesia and Malaysia posted stronger monthly gains. Indonesia's IDX Composite rose 10.51% and Malaysia's FTSE Bursa Malaysia KLCI gained 3.66%.

Bangladesh outperformed India's Sensex, which rose 2.11%, and Thailand's SET Index, up 2.04%. Meanwhile, Pakistan's KSE-100 Index fell 2.33%, Sri Lanka's All Share Price Index dropped 5.09% and Vietnam's VN-Index declined 6.68%.

Sheltech Brokerage said Bangladesh's comparatively strong performance reflected improving domestic sentiment fuelled by regulatory reforms and stronger-than-expected corporate earnings.

Reforms and easing support market

Investor confidence strengthened after the government unveiled a 17-point roadmap to develop the capital market.

The announcements briefly lifted the DSEX to 5,926.28 points – its highest level in nearly two years – while daily turnover reached a two-year high of Tk1,669 crore.

The roadmap includes faster settlement systems, digitalisation of trading, expansion of the bond market, AI-based market surveillance and measures to attract institutional investors.

Support also came from Bangladesh Bank, which cut the policy interest rate by 50 basis points, signalling the start of monetary easing to support investment and economic recovery.

Government security yields also declined as banking system liquidity improved. Lower interest rates generally make equities more attractive by reducing financing costs and encouraging investors to shift from fixed-income assets.

Earnings remain encouraging

Corporate earnings also reinforced optimism. Of the 89 listed companies that disclosed April-June results during the month, 65 reported year-on-year growth in earnings per share.

Banks and non-bank financial institutions were among the strongest performers, benefiting from higher income from investments in government securities despite subdued lending. Several multinational companies also reported solid earnings, sustaining demand for blue-chip stocks.

Sheltech Brokerage said the results indicated that many listed companies were adapting to the challenging macroeconomic environment through cost control, operational efficiency and stronger treasury income.

Focus shifts to next reforms

Investors are now watching the finalisation of the revised margin lending framework, which is expected to influence market liquidity. They are also awaiting dividend declarations and annual financial statements from June-closing companies.

According to Sheltech Brokerage, continued implementation of market reforms, supportive monetary policy and stable corporate earnings could help sustain the market's positive momentum despite lingering global and domestic economic risks.

The Dhaka Stock Exchange (DSE) closed marginally higher today (4 August) after a volatile trading session marked by a tug-of-war between bargain hunters and profit-takers.

The benchmark DSEX index rose 8 points, or 0.14%, to 5,894. However, the blue-chip DS30 index slipped 2 points to 2,201, suggesting investors selectively favoured momentum-driven stocks over large-cap heavyweights, market insiders said.

Market breadth remained almost evenly balanced, with 170 stocks advancing, 176 declining and 45 remaining unchanged.

Turnover at the premier bourse declined 8% from the previous session to Tk1,111 crore, indicating slightly weaker market participation.

According to EBL Securities, the market showed resilience as investors continued accumulating momentum-driven stocks despite lingering concerns about the market's underlying strength. While cautious sentiment from previous sessions initially kept indices under pressure, a mid-session rally in insurance stocks helped the market recover and close in positive territory.

Sheltech Brokerage Limited said early buying pushed the benchmark index to an intraday high of 5,913 points before intensified profit-booking dragged it down to an intraday low of 5,888 points.

Although the market attempted to recover in the latter half of the session, buying conviction remained weak, and selling pressure erased much of the morning's gains.

The textile sector accounted for the largest share of turnover at 20.3%, followed by general insurance with 17.1% and pharmaceuticals with 12.2%.

Insurance was the day's best-performing sector, with general insurance advancing 3.4% and life insurance gaining 2.7%. The services sector also rose 1.7%.

On the downside, the information technology sector posted the steepest decline, falling 1.2%, while the ceramic and travel sectors also recorded marginal losses.

Among individual stocks, GBB Power and Tung Hai Knitting topped the gainers' list after hitting the 10% upper circuit breaker. Central Insurance and Prime Insurance also posted strong gains.

Matin Spinning was the day's worst performer, losing 4.61%, followed by Ring Shine Textile and EBL First Mutual Fund.

The mixed sentiment was also reflected at the Chittagong Stock Exchange (CSE). The broad CASPI index gained 25 points to close at 15,789, while the Selective Categories' Index (CSCX) edged down 2 points to 9,621. Turnover at the port city bourse fell 20% to Tk18 crore.

US job openings dropped in June as vacancies in the healthcare and social assistance sector declined by the most in nearly a year, but an improvement in hiring and low layoffs suggested the labor market remained stable.

The report from the Labor Department on Tuesday also showed a marginal increase in people quitting their jobs, presumably in search of greener pastures, which should limit wage growth and strengthen economists’ views that the labor market was not a source of inflation.Still, most economists expected the Federal Reserve to raise interest rates this year to tame inflation fueled by the Middle East conflict.

“The picture is of a steady labor market,” said Carl Weinberg, chief economist at High Frequency Economics. “This picture of the labor market will change as the economy adjusts to $100 plus a barrel oil, higher inflation, possibly tighter monetary conditions and global recession starting in Asia, where many production supply chains are rooted.”

Job openings, a measure of labor demand, had decreased by 178,000 to 7.359 million by the last day of June, the Labor Department’s Bureau of Labor Statistics said in its Job Openings and Labor Turnover Survey, or JOLTS report. Economists polled by Reuters had forecast 7.400 million unfilled positions in June.

Some have said the JOLTS report should be treated with caution, noting that the response rate to the survey had declined considerably.

Economists continue to view the labor market as remaining in a “slow-hire, slow-fire” mode, which they say should allow the US central bank to focus on inflation.

The Fed last week left its benchmark overnight interest rate in the 3.50 percent-3.75 percent range. Three members of the Fed’s policy-setting committee dissented in favor of a quarter-percentage-point hike.

Healthcare and social assistance job openings decreased by 147,000 in June, the largest decline since July 2025. This sector has been a key driver of job growth amid an aging population.

Temporary Protected Status for hundreds of thousands of immigrants from Haiti and six other countries has ended.

“With foreign-born labor force population driving the overall decline in civilian labor force, healthcare’s reliance on international recruitment may be exactly the sector to watch as limited labor supply increasingly shapes hiring in the labor market,” said Sneha Puri, economist at Indeed Hiring Lab.

There were 86,000 fewer open positions in the leisure and hospitality sector, mostly at hotels, restaurants and bars. There were more job openings at retailers as well as in the financial activities sector.

The job openings rate fell to 4.4 percent in June from 4.5 percent in May.

Hiring increased by 96,000 to 5.348 million, led by the healthcare and social assistance industry.

But hiring at hotels, restaurants and bars fell by 77,000, likely reflecting the fading boost from the recently ended FIFA World Cup tournament.

The hires rate rose to 3.4 percent from 3.3 percent in May.

Layoffs and discharges were little changed at 1.766 million, with the rate steady at 1.1 percent.

The number of people quitting their jobs increased by a modest 79,000 to 3.232 million.

The quits rate, viewed by policymakers as a gauge of labor market confidence, was unchanged at 2.0 percent.

A Reuters survey of economists estimates that nonfarm payrolls increased by 80,000 jobs in July after a rise of 57,000 in June.
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The BLS is scheduled to publish the July employment report on Friday. The unemployment rate is forecast to hold steady at 4.2 percent.

There is, however, a risk it could edge higher after a Conference Board survey last week showed the share of consumers viewing jobs as “plentiful” dropped in July to the lowest level since February 2021.

Money outside the country's bank vaults was growing until latest official data available, signifying that depositor trust in the banking sector has not yet revived fully.

According to statistics, the volume of currency outside the banking system had grown over 13 per cent until June last.

Money-market analysts have said the volume of deposits that flew out of the banks' vaults continued to rise significantly in recent months due mainly to trust deficit as weak financial condition of a number of banks come to the media spotlight that shakes confidence of the depositors.

On the other hand, they think, the real interest income against the deposits in many cases, particularly in the compliant banks, comes below inflation rate, which might prompt many of the depositors to look for alternative areas instead of the banks.

According to latest statistics with Bangladesh Bank (BB), the volume of currency outside the banks came to Tk 3.36 trillion by end of June last, Tk 400-billion higher from the figure of Tk 2.96 trillion recorded a year ago.

Even in December last, the figure was Tk 2.75 trillion. Since then, it had grown to Tk 2.83 trillion, Tk 2.86 trillion, Tk 3.03 trillion, Tk 3.0 trillion and Tk 3.49 trillion in January, February, March, April and May respectively.

Seeking anonymity, a BB official has said the volume of mattress money dropped by over Tk 120 billion in a month from May's record count of Tk 3.49 trillion but the volume still much higher than that of the tolerable or normal level.

He said the central bank takes various regulatory steps to bring back the deposits into the banking system through stabilising the sector. "We're hopeful that the volume will decline gradually in the coming days."

Managing Director & CEO, NRBC Bank, Dr Md. Touhidul Alam Khan opines that the surge in cash outside Bangladesh's banking system is not merely a liquidity issue -- it is a profound crisis of trust.

Years of "governance failures", mounting non-performing loans, and highly publicized scandals, including leadership turmoil at major institutions, have fundamentally eroded public confidence.

"When depositors witness banking irregularities or struggle to access their own funds due to withdrawal limits imposed by cash-strapped banks, panic takes hold. The result is a rational, self-preserving response: they withdraw their savings and keep them at home rather than risk institutional collapse," he said.

Simultaneously, the seasoned banker said, persistent inflation has forced lower- and middle-income families to liquidate savings just to meet daily expenses, keeping cash in active circulation rather than deposited in banks.

The harsh reality is that even when depositors lose faith in one bank, they are not moving funds to stronger institutions -- many top-tier, well-governed banks lack the branch presence in rural and suburban areas where trust has collapsed.

"This crisis demands collective accountability: comprehensive banking-sector reforms, restored public confidence through transparent governance. Without urgent, systemic intervention, we risk a prolonged detachment of the public from the formal financial system -- a scenario no economy can afford," he added.Business financing options

Managing Director and Chief Executive Officer of Mutual Trust Bank (MTB) Syed Mahbubur Rahman has noted that the deposit rates in many well-governed banks fall below the prevailing inflation rate, thereby rendering the real income of depositors negative.

"It might prompt many of the depositors looking for alternative areas like lands. This may be a reason apart from trust deficit," said the experienced banker.

Director-General of Bangladesh Institute of Bank Management (BIBM) Dr Md. Ezazul Islam said the volume of mattress money increased remarkably in May last probably for Eid-ul-Azha when a large number of people withdrew deposits to finance sacrificial animals.

In the following month (June 2026), the country saw severe protest over the leadership in Islami Bank and it led to massive cash withdrawal from the country's leading shariah-based bank.

"That's probably the reason behind the buildups of mattress money. But the good part is the figure starts dropping," the economist added.

Bangladesh has been experiencing a long episode of near-double-digit inflation since FY2023. This inflation rate considerably exceeds the global inflation rate. Efforts to control inflation have yielded some limited results, but the inflation rate remains persistently high, hovering around 9 percent annually. Along with rising inflation, GDP growth has slumped. This has raised the question, is Bangladesh passing through a phase of stagflation?

Sustained high inflation, along with a sharp deceleration in GDP growth, has hurt employment and increased poverty. The World Bank estimates that the incidence of both poverty and extreme poverty has increased since 2022. This reversal of poverty progress is a serious social problem. The employment challenge is reflected in the reduction in employment in all three broad sectors of agriculture, industry and services.
This stagflationary phase cannot prevail for long without creating social discontent and must be addressed swiftly. The policy focus should concentrate on lowering the inflation rate sustainably, while supporting the recovery of GDP growth.

The first question is why the inflation rate is persistently high in Bangladesh even as global inflation has fallen. In a market economy, prices are determined by demand and supply. The aggregate price level for the economy as a whole, which is the weighted average of individual prices, is similarly influenced by forces of aggregate demand and supply. So, the inflation rate, defined as the rate of change of the aggregate price level, is determined by factors that affect the growth of aggregate demand and supply.

The oldest theory of inflation, known as the quantity theory of inflation, owes its origins to Polish mathematician Nicolaus Copernicus and states that the rate of growth of prices (inflation) is the difference between the rate of growth of money supply and the rate of growth of real GDP. While this simple theory has faced fierce criticism from Keynesian economists, it has grown in sophistication, led by monetarist economists like Milton Friedman. The Keynesian economists have argued that the demand for money can change and affect the velocity of circulation and thereby destroy the one-to-one correspondence between the growth of money supply and inflation. Yet, the substantial role of monetary impulse in affecting inflation has remained intact.

However, instead of targeting the growth of money supply as recommended by monetarists, modern central banks target the inflation rate directly by influencing the interest rate. When inflation is high, a typical central bank raises the interest rate to reduce demand through cutbacks in spending, which then lowers inflationary pressure.

In my book “Bangladesh Stabilizing the Macroeconomy” published in December 2023, I provided evidence that the main factors that initially fueled the acceleration in inflation in Bangladesh since August 2022 were the excess growth of domestic credit, mostly public sector credit, owing to the large stimulus packages of the Covid-19 period (FY20-FY21) funded mostly through budgetary deficits and money creation, the continued financing of fiscal and quasi-fiscal deficits (FY22-FY23) through money creation, and control over interest rates (July 2020-November 2023) that pushed up private sector credit growth and lowered the growth of bank deposits.

Monetary policy correction started in November 2023 when the interest rate was deregulated, and the financing of the budget deficit through money creation was stopped. These policies were strengthened in May 2024 and further tightened during August-October 2024. They have largely remained in place since then. The interest rate is now deregulated, and the official stance of monetary policy is to control inflation through interest-rate management.

Many observers are disappointed that despite considerable monetary tightening, inflation remains stubbornly high at near double digits. There is also some scepticism about whether monetary tightening has gone too far without favourable outcomes for inflation. This scepticism, however, is based on a partial view. A fuller analysis will show that the main reason the full benefit of demand tightening for lowering inflation has not emerged is because of a large supply downturn that has happened over the past several years.

GDP growth rate declined by 51 percent between FY22 and FY26. All sectoral components of GDP have experienced a reduction in growth; the sharpest cutback was registered by the manufacturing sector with a 71 percent decline in the growth rate between FY22 and FY26. At the same time, the volume of imports has been falling, with the deepest cuts in imports of consumer and capital goods. This magnitude of supply shock over a 5-year period is unprecedented in the recent history of Bangladesh and is a major factor for the persistence of high inflation.

A sustainable strategy for fighting inflation is to continue to restrain demand while seeking to restore the growth momentum for both GDP and imports. Indeed, the growth of GDP and imports is correlated, and GDP growth cannot be restored without allowing imports to grow. Similarly, to lower inflation, in addition to boosting domestic supply, it is important to lower trade barriers that restrict the import of consumer goods into Bangladesh at a time when there are supply constraints.

The policies for demand and supply management must be internally consistent. This consistency of policy-making has become a major challenge. Despite the stated monetary policy stance of monetary tightening to fight inflation, in recent months money and credit growth have exceeded prudent limits consistent with lowering inflation. After falling between FY23 and FY25, the growth of money supply accelerated in FY26 from 7 percent to 10.8 percent. Similarly, total credit grew from 8.3 percent in FY25 to 10.2 percent in FY26. Additionally, the velocity of circulation increased from 2.4 in FY23 to 3.0 in FY26, possibly reflecting higher inflationary expectations. This expansion in monetary and credit growth, along with rising velocity of circulation in the face of a falling growth of aggregate supply, has inevitably stoked inflation as predicted by the quantity theory of inflation.

The acceleration in money supply growth is partly the outcome of the creation of high-powered money through the Bangladesh Bank’s purchase of foreign assets. Financing of a large budget deficit through bank borrowing by the Treasury has also contributed to the growth of money supply and domestic credit. Indeed, the Treasury deficit financing has tended to offset the reduction in total credit growth resulting from a reduction in private credit growth and thereby lowered the effectiveness of interest rate increases in reducing inflation. While private credit growth has fallen to a mere 5.3 percent, public sector credit growth surged to 26 percent. The conduct of fiscal policy is clearly not consistent with the targets of monetary policy. Moving forward, this must be corrected.

What is the role of money and credit policies for restoring the growth momentum? Looking at the supply side, it is hard to argue that GDP growth is constrained by a lack of liquidity. While the turmoil in the banking sector has created liquidity problems for the weak banks, the strong banks are flush with liquidity because they cannot find adequate traditionally defined creditworthy borrowers who are willing to borrow.

This slowdown in the demand for credit in the organised private sector is mostly a reflection of weak profitability of investment owing to several binding constraints, including high cost of doing business, a severe energy supply crunch, weak trade logistics, and shortage of skills. These constraints must be addressed swiftly to increase investment and GDP growth, but they cannot be removed by lowering the interest rate and increasing domestic liquidity.

Channelling greater credit growth to areas where there is indeed a credit constraint, such as the micro and small enterprises sector, would support a supply response by relaxing the credit constraint. But this credit expansion must be made consistent with the growth of total credit and money supply required for reducing inflation by lowering the bank financing of the budget deficit.

The writer is vice chairperson of the Policy Research Institute of Bangladesh (PRI). He can be reached at sadiqahmed1952@gmail.com

Bangladesh needs stronger collaboration between the government and the private sector to accelerate the transition to a circular economy and meet the European Union’s growing sustainability requirements, said Fahmida Khanam, secretary in charge of the Ministry of Environment, Forest and Climate Change.

She made the remarks at the “5th Sustainability & Green Growth Working Committee Meeting”, organised by Business Initiative Leading Development (BUILD) in collaboration with the Ministry of Environment, Forest and Climate Change at the ministry’s office in Dhaka recently.
Fahmida said the ministry has been assigned to implement circular economy initiatives as part of Bangladesh’s commitments under the United Nations Framework Convention on Climate Change and the United Nations Environment Programme to reduce environmental pollution.Bangladesh generates more than 821,000 tonnes of plastic waste annually, but only 36 percent of it is recycled

“Meeting the European Union’s circularity requirements is essential, while promoting green businesses remains a key government priority,” she added.

She thanked BUILD for highlighting the issue, saying the circular economy has become a priority for both the government and the private sector.

Fahmida said the government is gradually phasing out single-use plastics, beginning with plastic stick-based cotton buds, stirrers and straws. However, she stressed that industries need sufficient time to shift towards environmentally sustainable production before the policy is fully enforced.

She also called for further discussions with industry associations, saying the environment ministry and the commerce ministry have information on businesses operating in the sector.

At the meeting, Ferdaus Ara Begum, chief executive officer of BUILD, presented a policy paper on the opportunities and challenges of plastic-to-textile recycling. She said Bangladesh could increase garment exports by $4 billion to $5 billion by formalising and expanding the plastic recycling sector.

The study found that Bangladesh generates more than 821,000 tonnes of plastic waste annually, but only 36 percent of it is recycled. A large part of the value chain remains informal and lacks adequate investment.

The paper said expanding plastic-to-textile recycling would reduce dependence on imported man-made fibres and help Bangladesh comply with the European Union’s Green Deal and extended producer responsibility requirements. It recommended adopting a National Circular Economy Policy and forming a Circular Economy Council with representatives from relevant stakeholders to ensure coordinated governance.

The study also suggested government policies on waste collection, standards and traceability, along with quality checks and certification of polyethene terephthalate (PET) scrap before shipment and allowing its import.

SHM Mustafiz, director of the Bangladesh Garment Manufacturers and Exporters Association, stressed the need for proper waste collection points and fixed rates for waste collection.

He said trade licences should be mandatory to formalise the textile waste sector, build an organised collection system and ensure a steady supply of raw materials for recycling industries.

“The waste management system needs to be regularised to develop a blended financing model and attract foreign investment,” he added.

Officials from various government ministries, public agencies, the United Nations Industrial Development Organization and private sector trade bodies attended the meeting.

The government is in close coordination with the Asian Development Bank (ADB) for availing around $775 million support from the Manila-based lending agency against four fresh projects in the country’s power and energy, inclusive affordable housing and education sectors.

“Work is underway for holding the negotiations with the ADB and finalizing other procedures for these proposed projects,” said a senior official of the Economic Relations Division (ERD).

The senior ERD official informed that loan negotiations for $175 million ADB support has already been completed successfully for “Bangladesh: The Sustainable Energy Development and Empowering Communities in Chattogram Hill Tracts Project”. The DPP of the project now awaits ECNEC approval.

The project is located in the southeastern region of Bangladesh, encompassing the districts of Rangamati, Khagrachhari, and Bandarban, collectively known as the Chattogram Hill Tracts (CHT).Credit & Lending

The project encompasses a comprehensive power distribution system development and modernization program in the Chittagong Hill Tracts (CHT).

Key activities include the construction of Six new 33/11 KV substations (Three in Rangamati, one in Bandarban, and two in Khagrachari) and the upgradation of four existing substations along with the construction of one new switching stations.

SM Jakaria Huq, ERD Additional Secretary and Wing Chief, ADB, informed that loan negotiations for $100 million for the “Bangladesh: Inclusive Affordable Housing Finance Project” and another $200 million for the “Strengthening of Distribution network for 13 Palli Bidyut Samities Surrounding Dhaka City” is likely to be held this month.

Besides, the ADB and the Global Partnership for Education (GPE) are set to provide US$350 million to support a wide-ranging education reform programme in Bangladesh.

The “Bangladesh: Inclusive Affordable Housing Finance Project” project addresses the core market failures that prevent scaling-up of inclusive, affordable housing finance solutions for low- and middle-income households, with a particular focus on access for women.

The project envisages three key solutions: Credit line for innovative, inclusive, and affordable housing finance solutions.

A proposed $100 million financial intermediation loan will be used to fund a credit line to be established through PKSF in local currency to fund sub-loans to the target low-income beneficiaries, particularly women through eligible MFIs.

According to the proposal, the “Strengthening of Distribution network for 13 Palli Bidyut Samities Surrounding Dhaka City” project aims to modernise and strengthen distribution networks in rapidly industrialising areas, particularly Gazipur, Narayanganj and Narsingdi, where large factories and economic zones have significantly increased electricity demand.

The Taka 4,973.73 crore draft project aims to strengthen electricity distribution systems in industrially developed areas surrounding Dhaka to meet rapidly growing demand from industries, businesses and households.

The project will be implemented by the Bangladesh Rural Electrification Board (REB) across 13 Palli Bidyut Samities in Dhaka, Gazipur, Mymensingh, Manikganj, Munshiganj, Narayanganj and Narsingdi districts.

Meanwhile, the Asian Development Bank (ADB) and the Global Partnership for Education (GPE) are set to provide US$350 million to support a wide-ranging education reform programme in Bangladesh.

The “NextGen Education Programme” aims at improving learning outcomes, expanding digital education and strengthening institutional capacity.

Of the total assistance, Bangladesh will receive a $300 million concessional loan from the ADB and a $50 million grant from the GPE, according to another official at the ERD.

The programme will be implemented through three separate projects under the Ministry of Primary and Mass Education, the Secondary and Higher Education Division (SHED), and the Technical and Madrasah Education Division (TMED) by December 2030.

Under the proposed financing structure, $220 million of the ADB loan will be allocated to secondary and higher education, while the remaining $80 million will support technical and madrasah education.

The $50 million GPE grant will support primary, secondary and technical education. Of the total grant, the Ministry of Primary and Mass Education will receive $22 million, while SHED and TMED will each receive $14 million.

According to the project proposal, the initiative aims to modernise Bangladesh’s education system through digital transformation, improved learning outcomes, teacher development, infrastructure expansion and institutional reforms.Government

Officials said the “NextGen Education Programme” is expected to become a landmark reform initiative for Bangladesh’s education sector by linking development financing to measurable improvements in learning quality, institutional efficiency and skills development.

Earlier in May this year, the ADB announced that it would provide Bangladesh with $5 billion in support over the next five years.

The funding, announced during a visit to Dhaka by ADB President Masato Kanda, will support the Integrated Growth Network Development Initiative, which aims to improving connectivity, boosting investment and thus promoting balanced regional development.

The government has devised an ambitious five-year strategic plan to help revive Bangladesh's ailing jute sector after export earnings from jute and jute goods fell by nearly 29 per cent over the past five years despite rising domestic production.

The plan seeks to double the export earnings by 2031 through greater value addition, improved productivity, enhanced competitiveness and diversification of export markets, said a senior official at the Ministry of Textile and Jute.

The "Bangladesh Jute Sector Development Strategy and Action Plan (2026-2031)", prepared by the Department of Jute (DoJ), sets a target of raising annual export earnings from jute and jute products to US$1.64 billion by 2031 from the current level of about $820 million.

The action plan also aims to increase raw jute production to 11.5-12.0 million bales, achieve 85-90 per cent self-sufficiency in jute seed production, and raise the share of value-added products in total exports from the current 45 per cent to 70 percent, said the official.

The initiative comes at a time when global demand for the sustainable and environmentally friendly products are expanding rapidly as countries increasingly replace single-use plastics with natural fibres.

Despite being the world's second-largest producer of raw jute, Bangladesh has so far failed to fully capitalise on its growing market.

According to the strategy paper, export earnings from jute and jute products reached a record $1.16 billion in FY2020-21, but the amount continued to decline for four years to $820 million in FY25, representing a fall of nearly 29 percent.

The document says the decline was not caused by lower production. Instead, it attributes the weak export performance to inadequate value addition, limited market access, lack of product diversification and declining international competitiveness.

To reverse the downward trend, the government has planned to shift the industry's focus from exporting raw jute to the production and export of higher-value finished products.

The strategy paper has recommended expanding the production of geotextiles, biodegradable packaging materials, home furnishing products, composite materials, technical textiles, fashion items and automotive components made from jute.

Officials at DoJ said the strategic plan has also proposed establishing three to four internationally accredited testing laboratories to reduce exporters' dependence on overseas certification facilities.

At present, Bangladeshi exporters have to send samples abroad because the country lacks internationally recognised testing centres, it was leant.

As a result, testing a single product costs between $500 and $2,000 and takes 10 to 21 days, while similar testing in India costs only $60 to $150 and is completed within three to seven days.

China offers similar cost and time advantages.

According to the document, the higher testing costs significantly undermine the competitiveness of Bangladeshi exporters, particularly small and medium-sized enterprises.

The strategy paper further recommends preparing the industry to comply with the European Union's new environmental regulations, including the Digital Product Passport, strengthening collaboration between research institutions and manufacturers, and expanding the use of digital technologies throughout the jute value chain.

Syed Md Nurul Basir, Director General of DoJ, said implementation of the five-year programme is expected to require Tk 37 billion to Tk 47.5 billion worth of investment.

The government has planned to mobilise funds through public financing, private investment, development partners and public-private partnerships, the officials said.

Eight strategic pillars -- increasing farm productivity, ensuring the supply of quality seeds, modernising jute mills, promoting research and innovation, developing internationally accredited testing facilities, diversifying export markets, establishing digital information systems and undertaking policy reforms -- have identified for transforming the sector, he said.

The Ministry of Textiles and Jute will lead its implementation, while the Department of Jute will coordinate activities involving the Bangladesh Jute Research Institute, Bangladesh Agricultural Development Corporation, Export Promotion Bureau, Bangladesh Investment Development Authority and other public and private organizations, according to the strategy paper.

The plan also includes a regular monitoring and evaluation mechanism, it was leant.

The strategy paper identifies several structural challenges that have weakened the sector over the years.

They include India's anti-dumping duties on Bangladeshi jute products imposed since 2017, smuggling of raw jute across the border, rising production costs, weak links between research and industry, limited product diversification and inadequate quality assurance infrastructure.

It also said some 73 of the country's 266 jute mills are currently closed, affecting production capacity and skilled employment.

At the same time, the Department of Jute is operating with an extreme manpower shortage.

The strategy paper also calls for improving the domestic seed supply as Bangladesh currently imports a significant portion of its jute seed requirements.

Through expanded research, certified seed production and farmer support programmes, the government aims to meet 85-90 per cent of country's seeds demand from domestic production by 2031.

Bangladesh currently exports jute and jute products to 152 countries, but the strategy paper said about 63 per cent of total exports are concentrated in just three markets namely Turkey, China and India.

To reduce the dependence, it proposes expanding exports to Africa, Southeast Asia, the Middle East, Europe and North America through stronger trade promotion, participation in international fairs, buyer-seller matchmaking and partnerships with global brands.