The share of non-cotton garments in Bangladesh’s total garment exports rose to 30.7 percent in the January-September period of 2026, thanks to rising demand from international clothing retailers and brands, according to data from the Export Promotion Bureau.

Total garment exports from Bangladesh stood at $29.91 billion in the nine months to September this year.

Cotton garments accounted for $20.75 billion, or 69.3 percent, while non-cotton garment exports amounted to $9.17 billion, or 30.7 percent, according to the data.

The share of non-cotton garments rose throughout the year. The monthly average was 28 percent in January and February, surpassed 30 percent for the first time in June, reaching 31.6 percent, and peaked at 34.6 percent in August before falling to 32.6 percent in September.

Non-cotton exports reached their highest monthly value in July, at $1.31 billion, according to the data.

However, cotton is still the backbone of the sector. Monthly cotton exports ranged between $1.97 billion and $2.6 billion during the nine-month period.

The International Monetary Fund (IMF) has warned that eroding foreign exchange reserves, shrinking fiscal buffers and opaque borrowing arrangements are leaving some emerging and frontier economies more vulnerable to global shocks.Economic analysis reports

The warning carries implications for Bangladesh as it faces pressure from energy costs and external financing needs, although the IMF’s Global Financial Stability Report, released on Tuesday, does not mention Bangladesh by name or provide a country-specific assessment.

The report says measures taken by emerging and frontier economies to cushion the energy shock have weakened their capacity to absorb further external pressures.

“Measures to cushion the energy shock have weighed on fiscal space and reserve buffers, leaving less room to maneuver if energy price pressures intensify or global financial conditions tighten,” it says.

Asian economies dependent on imported energy have experienced larger swings in capital flows, according to the report. It cautions that the effectiveness of foreign exchange intervention depends on countries’ underlying vulnerabilities and broader economic policies.

“Foreign exchange intervention outcomes depend importantly on underlying vulnerabilities, including energy dependence, and the broader policy response,” the IMF says.

The report also raises concerns about opaque financing arrangements, particularly among frontier economies, warning that such transactions can obscure debt exposures and weaken access to international markets.

“Continued buildup of these and other opaque transactions could increase the vulnerability of frontier economies to global shocks and hinder future market access,” it says.Buy Maps

The IMF highlights sovereign total return swaps, through which governments can raise cash against assets, including their own bonds. Such transactions may not be fully reflected in standard public debt statistics, making transparent reporting essential.

For Bangladesh, the report’s broader message is the importance of preserving foreign exchange buffers, maintaining credible macroeconomic policies and ensuring transparency in public borrowing as global financial conditions remain uncertain.

Bangladesh's finance and planning minister has signalled a shift towards international capital markets to reduce reliance on financing from the World Bank, IMF, and Asian Development Bank. He has spoken of cancelling the existing IMF programme the government inherited and issuing sovereign bonds. An Alternative Financing Committee is examining the options.

Diversifying financing sources is a sensible objective. Access to international capital markets can provide greater flexibility, broaden the investor base, and establish a sovereign borrowing track record. But commercial creditors impose their own discipline. They demand compensation for sovereign risk, scrutinise fiscal and external vulnerabilities, and can withhold new financing precisely when a country needs it most.

Ironically, accessing international bond markets on affordable terms may depend on guarantees from the very multilateral institutions Bangladesh seeks to move beyond. The central question is how much commercial borrowing can realistically provide, at what cost and maturity, and under what conditions.

The financing arithmetic
Options include renminbi-denominated Panda bonds issued in mainland China, offshore renminbi-denominated Dim Sum bonds, yen-denominated Samurai bonds issued in Japan, Islamic Sukuk, and international Eurobonds. Commercial sovereign bonds commonly carry maturities of three to 10 years, although longer tenors are possible. For a speculative-grade borrower, securing longer maturities at affordable rates is difficult.

Lower interest rates in Japan and China make yen- and renminbi-denominated bonds appear cheaper than dollar-denominated Sukuk and Eurobonds. But Bangladesh's credit rating would attract a substantial risk premium, while currency hedging costs could offset the apparent interest-rate savings.

The relevant measure is the all-in borrowing cost, including interest, issue expenses, guarantee fees, and currency hedging costs. Without hedging, foreign-currency bonds expose Bangladesh to exchange-rate movements that could substantially increase debt-servicing obligations.

Recent issuances illustrate the variation in borrowing costs. Indonesia's Panda and Dim Sum bonds in 2025-26 carried coupons of roughly 2-3%. Pakistan, a closer credit comparator, issued dollar Eurobonds in 2026 at around 7.5-8%. These differences reflect creditworthiness, currencies, maturities and financing structures, rather than directly comparable all-in borrowing costs.

Bangladesh's own experience offers a useful benchmark. In 2019, AAA-rated IFC issued a three-year taka-denominated Bangla Bond in London at around 6%, while PRAN, the ultimate borrower, paid about 9.5%. Although PRAN faced no direct exchange-rate risk, its borrowing cost was substantial. Bangladesh would face higher borrowing costs than AAA-rated IFC, reflecting its weaker credit standing.

Commercial bonds offer greater policy autonomy. They do not generally require specific reforms in utility pricing, state-owned enterprises or fiscal management. Governments also have more freedom over how they spend the proceeds, except when bonds are issued for specified purposes, and establish an international pricing benchmark for Bangladeshi corporations.

Multilateral financing offers a different cost structure. IDA blend credits carry interest rates of around 2%, with maturities of about 25 years, including five-year grace periods. ADB's concessional loans offer broadly similar terms, although its regular lending is market-linked. Lower rates and longer repayment periods substantially reduce debt-servicing and refinancing pressures.

But they entail negotiations, documentation and oversight. World Bank and ADB project loans impose procurement and safeguard requirements, while policy-based financing involves agreed reforms. IMF programmes carry macroeconomic targets and structural benchmarks. These requirements consume administrative resources and limit policy discretion.

The limits of market access
Can international bond markets make a meaningful contribution to Bangladesh's financing needs? External loan disbursements declined from about $9.5 billion in FY2023-24 to $7.5 billion in FY2025-26. Even against this reduced flow, how much could Bangladesh realistically raise through sovereign bonds, and at what cost?

The Bangla Bond experience illustrates the difficulty of sustaining market access. Despite a successful launch, it did not develop into a regular programme of international taka-denominated bond issuance. Initial investor interest does not necessarily translate into a dependable source of financing.

Annual Panda bond issuance was approximately $25-30 billion in 2024-25, although the market expanded rapidly in 2026. At the earlier market size, raising $2-3 billion would have represented roughly a tenth of annual issuance. Securing such financing would be a substantial undertaking for a new sovereign borrower, particularly in a market dominated by established, highly rated issuers.

Securing guarantees at this scale is far from straightforward. The World Bank Group issued more than $25 billion in guarantees in FY26, covering a range of investments and financing arrangements rather than sovereign bonds alone. Pakistan's inaugural Panda bond in 2026, backed by ADB and AIIB guarantees, raised about $260 million. These illustrate both the potential of guarantees and the difficulty of mobilising several billion dollars annually through guaranteed sovereign bonds. Paradoxically, commercial borrowing may require continued reliance on multilateral institutions.

Multilateral guarantees cannot substitute indefinitely for stronger creditworthiness. Investors and rating agencies assess fiscal performance, debt sustainability, external vulnerabilities, and the credibility of economic policies, drawing partly on IMF assessments. Ending an IMF programme without a convincing alternative policy framework could undermine investor confidence. Ultimately, affordable market access depends on stronger tax revenues, a healthier banking sector, better management of state-owned enterprises, and adequate foreign-exchange reserves.

Sovereign bonds come with refinancing risks. The principal often falls due in a single large payment. Governments may expect to repay maturing bonds by issuing new ones, but that option can disappear when investor confidence weakens. Sri Lanka, Ghana and Zambia illustrate how fiscal and external vulnerabilities, compounded by restricted market access, can culminate in debt distress and default. Their circumstances differed, but the lesson is common: borrowing from international markets is easier than ensuring continued access when debts mature.

Multilateral development loans are generally better suited to long-gestation infrastructure projects. Their extended repayment schedules allow more time for economic benefits to materialise. Financing such projects with shorter-maturity bonds creates repayment obligations well before those benefits emerge.

The policy trade-off
Sovereign bonds offer greater flexibility and fewer policy conditions, but at the price of higher borrowing costs and greater refinancing risks. Whether that trade-off is worthwhile depends on the terms Bangladesh can secure.

The Alternative Financing Committee should assess investor appetite and borrowing costs before considering a modest initial issue. A small offering could help establish a presence in international bond markets without taking on excessive commitments. Developing a reliable benchmark requires regular issuance, transparent disclosure, and an active investor base.

That comes from financial strength. Bangladesh still needs stronger public finances, a healthier banking system, reliable energy supply and credible macroeconomic policies. The measure of success is not how much Bangladesh can borrow from global bond markets, but whether doing so improves the country's long-term financing position.

Bangladesh received US$9.88 billion in workers' remittances during July 1 to October 12 of the current fiscal year 2026-27, marking a 12.7 per cent increase from US$8.77 billion in the corresponding period of the previous fiscal year.Buy Maps

According to the latest Bangladesh Bank data, expatriate Bangladeshis sent home US$1.29 billion during October 1-12, compared to US$1.18 billion in the same period of 2025, registering a year-on-year growth of 9.2 per cent, reports BSS.

On October 12 alone, remittance inflow stood at US$124 million.

Asian equities fell sharply on Tuesday led by technology shares as a widening conflict in the West Asia kept oil prices elevated, supporting the dollar ahead of an earnings season that will set the tone for the rest of the year.

Energy prices are back driving global markets as investors weigh the geopolitical developments in West Asia and Russia-Ukraine, with Brent crude futures at $105.9 per barrel, near a two-week high.

Oil markets have been volatile as investors contend with the supply risks from attacks on Saudi Arabia while considering the prospect of additional diesel supplies from Russia.

"Markets are rediscovering that geopolitics matters most when it feeds back into inflation," said Charu Chanana, chief investment strategist at Saxo in Singapore.

"The renewed jump in oil is keeping pressure on yields and taking some shine off expensive growth stocks, especially as the Russia-Ukraine energy truce looks fragile and West Asia supply risks remain live."

In stocks, MSCI's broadest index of Asia-Pacific shares outside Japan fell 2 per cent in early trading, with tech-heavy South Korea's sliding 6 per cent. Japan's Nikkei sank 2.6 per cent after returning from a holiday.

"A lot of it has to do with the chip selloff we saw on Wall Street overnight. That's bleeding into the Asian region," said Kyle Rodda, a senior analyst at Capital.com.

Overnight, the tech-heavy Nasdaq fell 0.5 per cent, dragged by chipmakers as investors fret about the durability of the rally in AI stocks amid higher competition between the US and China.

"When you add another jump in oil prices and some positioning ahead of inflation data and earnings, you have all the ingredients for a risk-off day in Asia," Rodda said.

The cautious sentiment helped keep the US dollar near an 18-month high. The euro last bought $1.1157, while the Japanese yen was at 158.50 per US dollar.

Earnings Test Awaits

Investors' attention will be on the slew of US bank earnings this week to get a gauge on the impact of the recent surge in Treasury yields on dealmaking, lending growth and funding costs across the industry.

A toxic mix of inflationary pressure from elevated energy prices and worries about ballooning government debt have triggered several bouts of bond selloffs in recent weeks, pushing borrowing costs to multi-decade highs across the globe.

Four of the six largest US lenders, JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo will report results later in the day.

Anthony Saglimbene, chief market strategist at Ameriprise Financial, said investors will be looking to bank results for insights on whether households are still paying their bills, borrowing, and spending at healthy levels.

"The Q3 earnings season starts with stocks near record highs and little room for disappointment," he said.

"We believe for stocks to have an opportunity to grind higher from here, corporate America needs to turn in more A’s and B’s on their latest report cards and show they can maintain that momentum into year-end."

The benchmark 10-year yield was down 2.9 basis points at 5.214 per cent in Asian hours, staying close to the 24-year high of 5.364 per cent it hit last week.

Economist Selim Raihan has called for greater involvement of the private sector and international partners, including global buyers and investors, in financing Bangladesh’s green energy transition and supporting green growth. He made the remarks at a policy dialogue in Dhaka yesterday.

Bangladesh needs $230 billion between 2023 and 2050 to adapt to climate change, but the required funding has yet to be secured, said Raihan, a professor of economics at the University of Dhaka and executive director of the South Asian Network on Economic Modeling (SANEM).
Mobilising such a large amount would be challenging, making private investment and international financing essential to meeting the country’s climate goals and supporting the transition to cleaner energy, he said.

Selim made the remarks while presenting a keynote paper at SANEM’s policy dialogue titled “Can Green Growth Drive Bangladesh’s Next Phase of Development?” at the Sheraton Dhaka in the capital.

Businesspeople, economists and government officials attended the event, where discussions also focused on rooftop solar integration, grid stability, battery storage and disposal, and financing green growth through green bonds and carbon markets.

Monzur Hossain, member (secretary) at the General Economics Division of the Bangladesh Planning Commission, said the government was focusing on generating solar electricity from rooftops, particularly in areas along riverbanks.

However, integrating rooftop solar power into the national grid could create instability and imbalances, he said. Establishing isolated grids in some areas could be one solution, and work was underway to address the challenges.

While the government was considering these issues in its commercial projects, private-sector initiatives involving direct electricity sales to the government required strict quality control to protect public interests, Monzur added.

Md Fazlul Hoque, administrator of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), also raised concerns about the practical challenges of implementing solar power projects, particularly battery storage and disposal.

Installing solar systems without batteries can reduce costs, but electricity generated during the day cannot be used at night unless it is stored, he said. However, lower nighttime demand warrants an assessment of whether battery-free systems could remain viable.

Fazlul also highlighted the environmental and technical challenges of battery disposal, particularly in the garment sector, where compliance requirements are stringent.

“Where will the batteries be disposed of? This is a major issue. It is highly technical and potentially very risky,” he said.

Drawing on his 12 years of experience with solar energy projects, Fazlul said implementing solar power initiatives was far more complicated than it might appear.

Fahmida Khatun, distinguished fellow at the Centre for Policy Dialogue (CPD), said green growth had become imperative for Bangladesh rather than a matter of choice.

“For Bangladesh, it is no longer a matter of choice; it has become an imperative,” she said.

The key challenge is to advance green growth through domestic policies and actions alongside international engagement, Fahmida added.

She also urged Bangladesh to explore green bonds and carbon markets to mobilise financing, saying both remained underutilised.

“Financing is an important issue. Bangladesh could explore green bonds and opportunities in carbon markets, areas that we have not explored sufficiently,” she said, adding that greater emphasis on market-based mechanisms was necessary because public resources were limited and faced competing demands.

Bangladesh will request Japan to introduce a country-specific "transitional concessional window" to provide Bangladesh with low-interest loans at least until 2029, as interest rates on loans under the official development assistance (ODA) programme have risen significantly, officials at the Economic Relations Division (ERD) said.

The request is set to be placed at a meeting between Finance and Planning Minister Amir Khosru Mahmud Chowdhury and Japan International Cooperation Agency (Jica) Senior Vice-President Shohei Hara, expected tomorrow, on the sidelines of the annual meetings of the International Monetary Fund and the World Bank in Thailand.

The finance minister is expected to seek measures to reduce the risks associated with Jica's floating-rate loans and propose an interest rate cap on such loans. He may also seek the option to convert floating-rate loans into fixed-rate loans, if necessary, or introduce other mechanisms for sharing interest rate risks between borrowers and lenders, ERD officials said.

They said the need for special concessions was being felt as the rising cost of Japanese loans had become a major concern during the transitional period ahead of Bangladesh's graduation from the Least Developed Country (LDC) category.

In April 2020, Jica's standard fixed interest rate for loans to eligible LDCs and low-income countries was just 0.7%. Under the agency's new lending terms, effective from 1 October 2026, the standard fixed interest rate has risen to 3.50%, marking a fivefold jump in six years. These loans have a repayment period of 30 years, including a 10-year grace period.

Bangladesh will emphasise at the meeting that Japanese ODA loans should not become comparable in cost to market-based financing and that their flexible and concessional nature remains crucial given the country's current economic situation.

Bangladesh is currently in the process of graduating from the LDC category and has also sought additional time to prepare for the transition.

An ERD senior official said interest rates on Jica loans were revised every six months. Before last October, the interest rate on Japanese loans was 3.05%, but it had since risen to 3.50%. The rate could increase further over the next six months.

Meanwhile, the interest rate on new floating-rate loans from Japan currently stands at 1.80%, although there remains a risk that the rate could rise over the long term, even after the loan agreement is signed. The issue is now under review.

ERD officials said that if the six-month Tokyo Term Risk-Free Rate (TORF) were used as the benchmark, the current six-month reference market rate would be approximately 1.35%. Adding a fixed spread of 0.45 percentage points would bring the total interest rate to around 1.80%.

If TORF rises to 1.50%, the total interest rate in the next cycle would increase to 1.95% – 1.50% plus the 0.45-percentage-point spread.

The government believes that although floating-rate loans may initially appear attractive, they can create considerable uncertainty over future debt-servicing costs, particularly for long-term infrastructure projects.

ERD officials said predictability in future debt-servicing costs was essential for medium-term revenue planning and debt management.

Bangladesh seeks to expand budget support

Bangladesh wants to move Japan's development assistance beyond project-based loans towards a regular, long-term framework for budget support and policy-based financing, ERD officials said.

The government also wants to discuss ways to curb cost overruns and repeated deadline extensions in Jica-funded projects, ensure the proper use of funds and improve transparency in project implementation.

Officials said one of the finance minister's key messages at the meeting would be the need to increase Japan's policy-based financing and direct budget support.

Urgent support on Matarbari power plant

Officials familiar with the matter said the finance minister might raise operational and technical problems at the Matarbari Ultra Super Critical Coal-Fired Power Plant directly with Jica's senior vice-president.

Recent reports have highlighted declining generation and several unresolved technical issues, including problems with the boiler and other systems. There have also been delays in determining technical responsibility and resolving the problems.

The main challenges facing the 1,200MW Matarbari coal-fired power plant include supply chain and fuel shortages caused by delays in coal imports and the dollar shortage, difficulties in opening letters of credit on time, mechanical and technical interruptions in maintaining ultra-supercritical technology, and limitations in transmission infrastructure for supplying electricity to the national grid.

These interconnected problems have frequently prevented the plant from generating electricity at full capacity or maintaining an uninterrupted supply.

Govt to be more selective in Jica projects

With interest rates on Jica loans rising, the government has decided to be more selective when approving future projects. New projects will need to align with the country's current development priorities and the government's electoral pledges.

Bangladesh also wants to develop a "strategic investment portfolio" with Jica instead of relying primarily on project-by-project loans. This would place greater emphasis on a project's contribution to employment, exports, production and private investment rather than simply the volume of financing.

Bangladesh seeks Japanese cooperation in new sectors, including export diversification

Bangladesh wants to expand cooperation with Japan beyond traditional development assistance into several new areas, including export diversification, the bond market, skilled human resources, digital transformation, pharmaceuticals and healthcare industries, ERD officials said. The finance minister will present a package of proposals on these issues at the upcoming meeting with Jica.

Officials said discussions would cover improvements in trade and logistics with Japan, as well as reducing Bangladesh's dependence on a limited range of export products, particularly readymade garments.

Bangladesh would finally achieve the government-set 6.5-percent GDP growth notwithstanding a sharply lower forecast by the International Monetary Fund (IMF), Finance Minister Amir Khosru Mahmud Chowdhury has expressed the optimism.

He said the country would assess its economic performance at the end of the fiscal year rather than debate growth projections.

"We do not want to debate anyone's projections. We are carrying on with our work, and the results will be seen at the end of the fiscal year. We remain hopeful of achieving the growth target set in our budget," he told journalists on the sidelines of the IMF-World Bank Annual Meetings in the Thai capital.

The IMF Tuesday projected Bangladesh's gross domestic product (GDP) growth at 3.2 per cent in FY2026-27, less than half the government target.

Meanwhile, the government is pursuing fresh financial support from the World Bank and the IMF to help cushion the economy against mounting external pressures, particularly the impact of the conflict in the Middle East on energy costs.

About his latest engagement with the World Bank as part of an ongoing dialogue, Mr Chowdhury said discussions with the lender were progressing as expected.

"Everything is moving on track. We spoke with the World Bank's vice-president yesterday and held discussions with its managing director for operations today."

The minister said the World Bank understood the economic challenges facing the new government, including the liabilities inherited from previous administrations and the additional pressure created by the ongoing war.

"They want to support us. They understand the circumstances in which the new government took charge, the economic difficulties we inherited and the liabilities left by previous governments.

"They also understand the pressure the ongoing war is putting on the economy, and they are prepared to support us in addressing these challenges," he told the press. Mr Chowdhury said the World Bank was aligned with the government's economic programmes and policy priorities for the short, medium and long terms.

"The World Bank is aligned with our programmes and policies," he said, adding that the discussions would lay the groundwork for continued cooperation.

Asked whether the government was seeking an additional $10 billion in assistance, the finance minister said no concrete decision had emerged from the meetings.

"These meetings are part of a series of discussions that will continue over the next few months. The World Bank's team will then visit Bangladesh, and a final decision will come thereafter."

He said the current discussions were intended to establish the basis for future cooperation rather than produce an immediate financing commitment.

"These discussions will establish the foundation for what we plan to do in the future," he added.

The minister also disclosed that Bangladesh submitted a detailed partnership framework to the World Bank, describing it as an unprecedented step in the country's engagement with the lender.

"This has never happened before, and we are now discussing the agenda outlined in that framework," he said.

The discussions come as Bangladesh seeks external financing to manage economic vulnerabilities, including higher energy import costs, inflationary pressure and strains on public finances.

The government is looking to multilateral development partners to help sustain its economic programme amid heightened geopolitical uncertainty.

Bangladesh entered a $4.7-billion IMF loan programme in January 2023 under the previous Awami League government. The package was subsequently increased to $5.5 billion during the interim administration.

The BNP-led government decided in May this year to exit the programme eight months before its scheduled expiry and later applied for a fresh financing arrangement, according to a June-3 statement by Ivo Krznar, the IMF's mission chief for Bangladesh.

Bangladesh has so far received $3.8 billion in five instalments under the original $4.7-billion package.

The government's pursuit of fresh support from multilateral lenders has gained importance as the conflict in the Middle East threatens to increase energy costs and complicate efforts to stabilise the economy and achieve its growth target.

Bangladesh has pledged to slash project implementation timelines for World Bank-funded initiatives from seven years to five and streamline the approval process from 18 months to just eight, as it seeks to secure $10 billion in additional loan assistance over the next three years.

Finance Minister Amir Khosru Mahmud Chowdhury informed the multilateral lender that the government is aiming to compress the approval window even further, down to five months, to accelerate development delivery.

The commitments were made during a high-level meeting in Bangkok between a Bangladeshi delegation led by senior government policymakers and World Bank Managing Director Anna Bjerde. As part of the discussions, the World Bank agreed to finalise its Country Partnership Framework with Bangladesh by June 2027.

Speaking to reporters following the talks, Khosru expressed satisfaction with the trajectory of negotiations, noting that the World Bank remains fully aligned with Bangladesh's broader economic policies and medium-to-long-term development plans. However, he cautioned that negotiations over the $10 billion package remain ongoing and could take several months to wrap up.

Coordinated support from World Bank and IMF
Senior government officials present at the meeting told The Business Standard that both the World Bank and the International Monetary Fund (IMF) have responded positively to Bangladesh's requests for assistance. Alongside the World Bank talks, the BNP-led government has proposed borrowing $4.5 billion from the IMF under a new loan programme.

"Both institutions are setting conditions across various areas, including banking sector reforms and enhanced revenue collection," a senior government official said. "Discussions are currently under way to coordinate and harmonise these reform requirements to prevent overlapping conditions."

If secured, the additional funding will cushion the economy against global shocks by financing critical energy and fertiliser subsidies, securing essential imports, recapitalising banks, and strengthening overall financial sector resilience.

Four priority pillars underpin $10b proposal

The government's request for additional financing rests on its newly drafted Resilience and Reform Investment Programme, which outlines four key priority pillars:

Trade Financing: Securing essential imports, particularly energy and fertiliser supplies.

Trade Facilitation: Supporting micro, small, and medium-sized enterprises (MSMEs).

Financial Governance: Driving deep reforms across the banking and financial sectors.

Economic Resilience: Enhancing macroeconomic capacity to absorb external shocks.

The proposal follows a high-level meeting between Prime Minister Tarique Rahman and World Bank President Ajay Banga on the sidelines of the UN General Assembly in New York last month. The formal framework was presented to World Bank officials in Bangkok on Monday.

Describing the effort to secure aid under this framework as "unprecedented in Bangladesh's history," the finance minister confirmed that written proposals and initial recommendations have been exchanged between both sides.

Focus on private investment, tax automation, and job creation

The World Bank's reform agenda for Bangladesh places heavy emphasis on private investment and job creation. Key priorities include tackling high non-performing loans (NPLs), reforming state-owned enterprises, and restoring health to the banking system to reignite economic momentum.

The Bangladeshi delegation highlighted several immediate steps already under way to restore market confidence:

Banking Sector Restructuring: Initiatives are in motion to recapitalise banks and protect depositor confidence, including joint interventions with the International Finance Corporation (IFC), the World Bank's private-sector arm. Visible cleanup measures have already commenced in targeted institutions.

Capital Market Oversight: An independent, professional securities commission has been instituted, replacing the previous political leadership model. Eased regulatory barriers have renewed interest among institutional fund managers across New York, London, and Hong Kong, with progress on a Hong Kong-based equity fund advancing rapidly.

Tax Administration Reforms: In line with longstanding recommendations from the IMF and World Bank, revenue policy formulation has been completely separated from tax administration. Furthermore, full automation of tax processes is being rolled out to boost the national tax-to-GDP ratio.

State-owned Sonali Bank has lent Tk7,000 crore to financially distressed private lender National Bank at an interest rate of 10% for three months, backed by a 100% guarantee from Bangladesh Bank.

Meanwhile, National Bank received around 7,500 withdrawal requests over the past three days, although the total amount sought was significantly lower than the bank's estimates, said its Chairman Melita Mehzabeen.

The bank has been accepting withdrawal requests from customers with deposits exceeding Tk1 lakh since 11 October to assess their demand for funds.

Speaking to The Business Standard today (13 October), Melita said National Bank would resume full and normal banking operations from 15 October 2026.

She expressed gratitude to customers for their patience and continued trust despite the bank's prolonged difficulties.

National Bank has sent SMS notifications to around 1.25 million customers explaining how to submit withdrawal requests at branches and providing the necessary instructions. It has also launched a hotline to provide information and assistance.

The bank is arranging to distribute sufficient cash across its 221 branches and 65 sub-branches. Adequate cash will also be available at its 53 ATMs so customers can withdraw money according to their needs, she said.

Melita added that National Bank was preparing to receive remittances through its own remittance houses and branches in Malaysia, the Maldives and Singapore. Although these institutions had received recognition for their contributions to remittance transfers, liquidity constraints had meant that most remittances sent through them were not routed via National Bank.

The bank is now prepared to ensure that beneficiaries receive remittances on time if the funds are channelled through it, she said.

According to Melita, National Bank is trying to manage its operations using its own funds under Bangladesh Bank's guidance. The central bank has assured it of support if needed, while other financial institutions may also provide assistance when required.

However, transactions will not resume in accounts frozen or restricted under applicable government or Bangladesh Bank regulations. Transactions in dormant accounts or accounts with outdated know-your-customer (KYC) information will also remain suspended until the required procedures are completed.

She also expressed hope that depositors would keep their money with the bank after receiving interest on their deposits rather than withdraw funds before maturity.

A Bangladesh Bank spokesperson told TBS that the central bank had instructed National Bank to take the necessary steps to return depositors' money.

"The governor has assured the bank that Bangladesh Bank will provide support if it faces difficulties while implementing these measures," the spokesperson said.

Under the guarantee arrangement, Bangladesh Bank will reimburse Sonali Bank within three working days if National Bank fails to repay the loan at maturity.

Sonali Bank Managing Director Shawkat Ali Khan said the bank had extended the liquidity support in line with Bangladesh Bank's initiative to restore confidence in the banking sector.

He said the central bank's 100% guarantee ensured that Sonali Bank would be reimbursed within three working days if National Bank failed to repay the loan at maturity, leaving Sonali Bank exposed to no risk.

He added that similar financing had previously been extended to Islamic banks against guarantees from the central bank.

National Bank struggles with financial distress

National Bank was once among the leading private-sector banks in Bangladesh. After the Awami League government came to power in 2009, major changes were made to the bank's board, and control subsequently passed to the Sikder family.

The bank underwent another board change following the fall of the Awami League government on 5 August 2024. However, it has yet to recover from irregularities and alleged financial plundering during the Sikder family's tenure.

A high volume of non-performing loans has weakened its financial indicators. The bank has continued to incur losses and struggled to meet depositors' withdrawal demands.

Bangladesh Bank has also provided substantial liquidity support to keep the loss-making lender afloat. Despite the assistance, the bank's normal transaction activities have yet to improve significantly.

Recently, four National Bank depositors approached the High Court after failing to withdraw their deposits. The court subsequently directed Bangladesh Bank to ensure that the depositors could withdraw money from their savings accounts.

Against this backdrop, National Bank Chairman Melita Mehzabeen and acting managing director Zahidul Haque met Bangladesh Bank Governor Md Mostaqur Rahman on 8 October.

During the meeting, Melita said recent measures taken by the central bank had helped establish good governance at National Bank. She also said positive changes had been introduced in loan management to improve efficiency and operational capacity.

The governor said the bank's liquidity position and its ability to meet depositors' withdrawal demands were being treated as priorities. He instructed the bank to take the necessary measures to protect depositors' interests, maintain confidence in the banking system and ensure orderly operations.

He also directed the bank to ensure that all depositors could withdraw money according to their needs from 15 October.

Central bank's exposure to National Bank

Earlier, National Bank borrowed Tk985 crore from several banks but failed to repay the money within the stipulated period. Bangladesh Bank subsequently settled the liability, turning the amount into a debt owed by National Bank to the central bank.

National Bank currently owes Bangladesh Bank Tk10,568 crore. The entire amount was provided by the central bank through the creation of new money, according to the information provided.

Banking sector insiders say Bangladesh Bank is facilitating loans from other banks against central bank guarantees to support lenders facing liquidity shortages.

While such assistance can help address immediate cash shortages, a lasting recovery will be difficult unless loan recovery improves and distressed banks strengthen their financial positions.

Olympic Industries has decided to buy 32.87 decimals of land in Narayanganj for Tk 1.15 crore to expand its operations.

The leading biscuit and confectionery maker decided to make the purchase at a board meeting on Monday, according to a disclosure on the Dhaka Stock Exchange (DSE) yesterday.

The land is located in Changain mouza under Kanchpur in the Sonargaon area of Narayanganj.

The company will also bear the registration costs, including value-added tax, other taxes and related charges.

This is the second time in a month that Olympic Industries has decided to buy land in the same district. On October 11, the company disclosed plans to purchase land in Narayanganj for Tk 3.38 crore.

In fiscal year 2025-26, the company’s revenue rose by more than 6 percent to Tk 2,955 crore.

However, net profit edged down to Tk 199 crore from Tk 201 crore a year earlier, which the company attributed to higher income tax expenses, according to a price-sensitive disclosure.

Olympic Industries has recommended a 35 percent cash dividend for the year ended June 30, 2026, up from 30 percent a year earlier.

The company’s shares remained unchanged at Tk 139.40 at the end of trading yesterday on the DSE.

Sponsors and directors held 37.38 percent of the company’s shares as of September 30, 2026, while institutional and foreign investors held the remainder, according to DSE data.

Bangladesh has extended the deadline for submitting bids under its Offshore Bidding Round 2026 by four months to 31 March 2027 from 30 November 2026, following requests from international oil companies (IOCs).

The government has also made data-sale packages for the bidding round more accessible to encourage participation, according to a press release issued by the Ministry of Power, Energy and Mineral Resources today (13 October).

The ministry said the decision followed recent discussions with several internationally renowned oil companies and their requests regarding the bidding process.

The extended deadline will give interested companies more time to assess available data and prepare their bids for offshore exploration, the ministry said.

It expects the deadline extension and improved access to data packages to boost international oil companies' interest in the bidding round.

The information was disclosed in the press release by Muhammad Arif Sadek, deputy chief information officer of the ministry.

In a move to sustain industrial production and maintain market stability, Bangladesh Bank extended policy support and relaxed financial restrictions under the Bank Company Act for two Beximco Group companies — Shinepukur Ceramics and Beximco LPG Unit-1.

The two companies have been exempted from complying with Section 27Kaka(3) of the act, a move expected to ease difficulties in opening letters of credit (LCs) and securing working capital to import raw materials.

The central bank issued a circular today (12 October) granting the exemption until 31 December 2027.

Under the facility, Shinepukur Ceramics, a listed company, can now open LCs with a 15% margin, down from the previous 100%. Despite not being a defaulter itself, the company had been treated as one because of defaults by other Beximco Group companies.

Beximco LPG Unit-1, meanwhile, will be allowed to open LCs with a 100% margin. Previously, defaults by other group companies had prevented the LPG business from opening any LCs.

Following the fall of the Awami League government on 5 August 2024, Beximco LPG Unit-1 was unable to open LCs and had to buy raw materials from other domestic LPG companies to supply the market. The new facility will allow it to import raw materials directly.

Earlier, the Bangladesh Securities and Exchange Commission (BSEC) restructured the boards of three listed Beximco Group companies, excluding the group's vice-chairman, Salman F Rahman.

Shinepukur Ceramics

The Bangladesh Bank notification said the central bank had granted the facility under the powers conferred by Section 121.

It said that although Sonali Bank's customer Shinepukur Ceramics Limited is a loan defaulter, its existing working capital limit of Tk105 crore had been renewed in the national interest. The renewed facility will remain valid until 31 December 2027.

As a result, the company will not face any complications under Section 27Kaka (3) of the Bank Company Act, 1991.

The central bank imposed two conditions for the facility. First, the Finance Division will bear no liability for the credit facility, and Sonali Bank will not be able to claim financial assistance from the government in the future.

Second, all earnings of Shinepukur Ceramics must be deposited into a designated account, from which Sonali Bank's dues must be repaid regularly on a proportional basis.

A Beximco Group official, speaking on condition of anonymity, said, "Shinepukur Ceramics will be able to operate at its optimum capacity following approval for the renewal of its working capital facility. Since 5 August, the company had been required to open letters of credit (LCs) with a 100% margin, while its funded facilities had declined to Tk35 crore from Tk80 crore."

Beximco LPG Unit-1

A separate notification said National Bank PLC had been allowed, under Section 121 of the Bank Company Act, to open letters of credit (LCs) and provide working capital to its loan-defaulting customer Beximco LPG Unit-1 Limited against a 100% margin.

Subject to certain conditions, the restrictions under Section 27Kaka(3) of the Bank Company Act, 1991, will not apply to the facility until 31 December 2027.

The conditions stipulate that the facility will not create any liability for the government or Bangladesh Bank, and National Bank will not be entitled to seek financial assistance from either in the future.

All earnings of Beximco LPG Unit-1 Limited must be deposited into a designated account, from which National Bank's dues must be repaid regularly on a proportional basis.

Earlier, following a request from the group, the BSEC approved the reconstitution of the boards of three listed Beximco Group companies — Beximco Pharmaceuticals, Beximco Ltd and Shinepukur Ceramics — excluding Vice Chairman Salman F Rahman, to break a years-long deadlock and resume regular operations.

With Salman F Rahman, former private industry and investment adviser to ousted prime minister Sheikh Hasina, excluded, the three companies will operate without him on their boards for the first time since their inception, according to group sources.

Salman agreed in September to step down from the boards of Beximco's listed companies to resolve the prolonged operational deadlock and restore full operations. He has remained in custody since August 2024 over multiple criminal charges.

Following consultations with the government and regulatory bodies, Beximco Group applied to the BSEC to reconstitute the boards of its listed companies.

Strong investment in AI infrastructure is keeping global growth at around 3 percent, yielding major benefits for many Asian economies that supply the hardware, such as Thailand, International Monetary Fund Managing Director Kristalina Georgieva said on Monday.

The artificial intelligence investment boom was already delivering a "demand shock, an investment shock" that could boost growth in advanced Asian economies by a half to one full percentage point, and emerging Asian economies by 0.2 to 0.8 percentage point, she said.

"AI, love it, hate it. It's already here," Georgieva said.

"That shift into higher gear is what is keeping the world economy growing at around 3 percent, despite the fact we are being dragged down by the energy supply shock," she told hundreds of participants on the first day of a weeklong set of meetings of the IMF and World Bank in the Thai capital.

The IMF in July forecast global growth at 3 percent in 2026. It will release an updated outlook on Tuesday. Some 18,000 people are expected to attend the meetings this week, including finance officials from the IMF's 191 members. Several ministers will skip the meeting to focus on domestic priorities, including US Treasury Secretary Scott Bessent and Spanish Finance Minister Arcadi España, sources familiar with the matter said.

AI WILL HAVE PROFOUND CONSEQUENCES

Georgieva said AI amounted to a "slow-moving tsunami" that would have profound consequences for jobs, growth, education and even how governments generate revenue through taxation, given the expected shift from labor to capital. The IMF estimates that AI could lead to 40 percent of jobs being augmented, downgraded or eliminated, over time, she said.

An initial study showed that 10 percent of jobs in the US already required AI skills. While routine, repetitive jobs were shrinking, low-paying jobs were increasing in two lower-paying sectors, construction and data centers. "It is a transformative technology. It so completely changes how we work, how we live," she said, noting that an AI assistant now gave her a 30-second message about her schedule each day.

The US, China and India are the most important producers in the AI supply chain, but many of the firms building the needed infrastructure are in Asia, Georgieva said, referencing Thailand, host of this year's annual meetings.

AI IMPACT ON ENTRY-LEVEL JOBS

World Bank President Ajay Banga, who has made jobs a central focus of his presidency, said the development bank was focused on leveraging "small AI", which is not dependent on large language models, to generate enormous productivity gains for farmers, healthcare systems, educators and others in emerging markets.

Singapore's President Tharman Shanmugaratnam, speaking at the same event, said governments should address how AI was reducing job opportunities for graduates. "There is a particular problem that we have to address very soon ... and that is that, the first rung in employment, your first job upon graduation, is now seeing less demand," he said.

He said the world should also guard against AI resulting in a "new divergence" in growth and job creation between developing and advanced economies.

"AI is going to widen the divergence if we are too passive about it," he said.

"So we've got to do everything we can to first use AI to create good jobs and to create jobs that can be done well by human beings, can allow them to ride up a career ladder despite AI."

Bangladesh's rural borrowing rate has risen from 36% to 42% of households over two decades, while agriculture's share of rural loans has fallen from 25% a decade ago to 16%.

The findings were presented at a workshop on food-system financing organised today (12 October) by the Bangladesh Institute of Development Studies (BIDS) and the International Food Policy Research Institute (IFPRI) in Agargaon, Dhaka, with support from the Consultative Group on International Agricultural Research's (CGIAR) Better Diets and Nutrition Science programme.

NGO microfinance institutions account for three out of every four rural loans. Although the median size of NGO microloans has nearly doubled in real terms, borrowers face mounting repayment pressure. NGO loans carry a flat 15% rate, equivalent to an effective rate of about 27%, compared with bank lending rates averaging around 10%. Informal moneylenders charge 50%-60% annually.
The share of borrowers spending over 40% of their income on instalments has risen from 22% to 41%, reaching 79% among the poorest 20% of households. The share of NGO borrowers also taking moneylender loans has increased from 27% to 49%.

Small farmers face credit constraints

Research presented at the workshop found that borrowing per acre for farms smaller than half an acre doubled from Tk6,000 in 2010 to Tk13,500 in 2022. Banks' emphasis on land ownership excludes many farmers who lease land with cash.

Agricultural loans largely finance fertiliser, seeds, livestock and land leases, with little investment in mechanisation. Fewer than 2% of farm households own tractors or power tillers, while banks finance only 2%-7% of agricultural machinery costs.

Loan repayment schedules also fail to match farm income cycles. While 60–80% of agricultural bank and moneylender loans allow lump-sum or annual repayment after harvest, only 4–6% of NGO loans offer similar flexibility.

Livestock, which contributes 7.6% of agricultural GDP and is owned by small farmers in 90% of cases, receives less than 5% of agricultural loans. Research suggests cattle fattening can yield 20%-30% profit over six months.

Experts seek broader financing reforms

PKSF Managing Director Md Fazlul Kader said financing must cover the entire food system, including collection, storage, processing and marketing, while supporting environment-friendly farming.

BIDS Director General Prof AK Enamul Haque called for risk-sharing arrangements and greater use of technology to raise productivity, warning that rising debt could push farmers out of agriculture.

Microcredit Regulatory Authority Executive Vice-Chairman Prof Mohammad Helal Uddin said the sector's accumulated surplus grew from Tk3,000 crore in 2006 to Tk69,000 crore. He called for reviewing financing costs and service charges, which can reach 24%, noting that greater reliance on savings could reduce borrowing costs.

Agriculture Secretary Md Selim Khan stressed accessible machinery finance and repayment schedules aligned with harvest seasons.

Participants said expanding credit alone would not improve farmers' financial security without lower financing costs, flexible repayment terms and effective risk-sharing mechanisms.

Dhaka Stock Exchange (DSE) Chairman Mominul Islam on Monday warned that investors are being defrauded through fake investment offers, misinformation and promises of doubling their money in a short time on social media.

“Investors are suffering financial losses due to these scams, which are run using the logos of stock exchanges and financial institutions,” he said at a seminar titled "Digital Deception and Scam Alert" held at the DSE Tower in the capital's Nikunja area.

Mominul said public confidence in the capital market is also being eroded, stressing the need for modern surveillance, enforcement of laws, greater investor awareness and stronger communication to tackle the situation.

The DSE and the DSE Brokers Association of Bangladesh (DBA) jointly organised the seminar as part of "World Investor Week 2026."

The DSE chairman said a key condition for ensuring effective information flow in the capital market is delivering timely, accurate and complete information to investors. “However, with the spread of social media, digital fraud has emerged as a new challenge.”

Using the logos of stock exchanges and various financial institutions, many people are posing as registered or licensed financial analysts, he said, adding that such moves are aimed at misleading and influencing investors.

Unrealistic promises, such as turning Tk 1 lakh into Tk 2 lakh within two weeks, are being used to lure people into traps, Mominul said.

Fraudsters are running various scams, including Ponzi schemes, by exploiting people's desire to get rich quickly, he said, noting that social media has spread such frauds far more widely than before.

The DSE chairman further said a huge volume of information unrelated to market fundamentals is circulating on social media. “Some individuals, in the name of technical analysis, are making remarks about the market that have no connection to its fundamentals.”

"Vested quarters may be behind such activities," he said, adding that investors are being confused and there is a risk of disruption to the normal functioning of the market.

Mominul said the DSE has taken steps to modernise its surveillance and monitoring systems.

It is also moving to make investor awareness programmes more effective in coordination with the Bangladesh Securities and Exchange Commission (BSEC), he said.

Preventive measures alone cannot stop digital fraud, the DSE chairman said, adding that credible information and positive messages must also be presented to counter misleading campaigns.

For this, he stressed building strong brokerage houses, merchant banks and asset management companies in the capital market, saying their institutional capacity and governance must be improved while also focusing on earning public trust.

Mominul underlined the need for collective efforts to develop the capital market as a strong and effective pillar of the economy.

Effective surveillance, greater awareness and a robust communication system must be built to combat digital fraud and restore investor confidence, he added.

The International Monetary Fund (IMF) has further lowered Bangladesh’s growth forecast for the fiscal year 2026-27 (FY27) to 3.2 per cent, down from its previous projection of 3.5 per cent made in July.

The Washington-based lender unveiled the latest projections in its World Economic Outlook (WEO) on Tuesday in Bangkok, as part of the 2026 Annual Meetings of the IMF and the World Bank Group.

The IMF also projected Bangladesh’s inflation rate to rise to 10.9 per cent in FY27, up from its April forecast of 6.0 per cent.

During the first three months of the current fiscal year, headline inflation stood at 8.32 per cent, 8.26 per cent and 8.34 per cent, respectively.

The IMF’s latest projections came days after the World Bank and the Asian Development Bank (ADB) issued weaker economic outlooks for Bangladesh for FY27.

On October 6, the World Bank projected Bangladesh’s gross domestic product (GDP) growth at 3.4 per cent in FY27, citing energy and banking-sector vulnerabilities, weak investment and persistent inflationary pressures as factors weighing on economic activity.
The World Bank also forecast inflation to remain elevated at 8.6 per cent in the current fiscal year.

Earlier, in September, the Manila-based ADB lowered its FY27 growth forecast for Bangladesh to 4.0 per cent from its earlier projection of 4.5 per cent.

In its Asian Development Outlook (ADO) September 2026 report, the ADB said severe structural energy deficits, banking-sector stress and persistent inflationary pressures would continue to constrain the country’s economic expansion in FY27.

The ADB also projected Bangladesh’s inflation rate to rise to 9.0 per cent in the current fiscal year.

Strong deposit growth in August has failed to spur robust private sector credit expansion, according to a government report.

Banking sector deposits stood at Tk 21.31 lakh crore in August 2026, up 12 percent year-on-year, according to the Economic Update & Outlook September 2026 prepared by the General Economics Division (GED) of the Bangladesh Planning Commission.

“This is faster than the 10.01 percent growth recorded a year earlier, so deposit collection has gained momentum,” the report said.

“It suggests that liquidity in the banking system has improved and that depositors’ confidence is recovering,” it added.

In contrast, private sector credit grew by 4.75 percent year-on-year to Tk 18.30 lakh crore in August, below the 6.35 percent growth recorded in the same period the previous year, according to the report.

Private sector credit is likely to remain subdued in the near term if borrowing costs stay high, the GED report says
Private sector credit is likely to remain subdued in the near term if borrowing costs stay high, business confidence recovers slowly and credit risk remains elevated, the report said.

Credit growth was uneven across sectors. Public sector credit rose by 32.45 percent to Tk 7.22 lakh crore in August, more than double the 14.81 percent growth recorded in the previous year.

“Heavy public sector borrowing may also crowd out private lending. The pace of private credit recovery will therefore be the key indicator to watch,” the report said.

Overall, the gap between deposit growth and private credit growth points to ample liquidity that is not being channelled into productive private investment, according to the GED.

Policy attention should focus on easing financing costs, improving the investment climate and strengthening the banking sector’s ability to lend, it said.

“Sustained deposit growth would give banks the resources to support a revival of private credit as macroeconomic conditions stabilise,” it added.

Bangladesh has discussed a possible new long-term liquefied natural gas (LNG) supply agreement with QatarEnergy, exploring ways to diversify supplies through the company's international portfolio of sources and transportation routes amid growing concerns over energy security.

State Minister for Power, Energy and Mineral Resources Aninda Islam Amit held bilateral talks with Saad bin Sherida Al Kaabi, Qatar's minister of state for energy affairs and also QatarEnergy President and CEO, in Saudi Arabia yesterday (11 October), according to a press release issued by the Ministry of Power, Energy and Mineral Resources.

The discussions covered Bangladesh's growing gas demand, its existing LNG import arrangements and the possibility of a new long-term supply contract.
State Minister for Power, Energy and Mineral Resources Aninda Islam Amit (third from the left) is pictured during bilateral talks with QatarEnergy in Saudi Arabia on 11 October 2026. Photo: Courtesy
State Minister for Power, Energy and Mineral Resources Aninda Islam Amit (third from the left) is pictured during bilateral talks with QatarEnergy in Saudi Arabia on 11 October 2026. Photo: Courtesy

The meeting also highlighted the potential to diversify LNG supply sources and routes through QatarEnergy's international portfolio, an important consideration for Bangladesh as it seeks to strengthen energy security amid disruptions to international fuel supply chains.

Qatar has been a major LNG supplier to Bangladesh under long-term contracts.

However, disruptions to Qatari LNG supplies following the US-Israel war on Iran and the closure of the Strait of Hormuz have increased uncertainty over deliveries, putting additional pressure on Bangladesh's efforts to secure gas for power generation, industry and other consumers.

The latest discussions come as Bangladesh seeks to broaden its supplier base and reduce exposure to supply disruptions in any single region or shipping route.

Saudi Arabia talks focus on energy security

In a separate meeting, Amit sought Saudi Arabia's cooperation in strengthening Bangladesh's energy security and expanding bilateral cooperation in the energy sector.

He met Saudi Assistant Minister of Energy Nasser Al-Qahtani, with discussions focusing on long-term energy cooperation, the establishment of a framework for collaboration between the two countries and potential support for Bangladesh's energy development plans.

Amit highlighted the need for long-term energy supply arrangements and cooperation in developing LNG infrastructure, including terminal facilities.

He also raised the prospects for offshore and onshore gas exploration as Bangladesh seeks to strengthen domestic supply and meet its growing energy requirements.

The state minister expressed hope that Saudi Arabia would extend its support to help Bangladesh achieve its energy goals by 2030.

He also stressed the importance of exchanges between representatives of the two countries and the establishment of a cooperation framework to advance joint initiatives.

The Saudi side said Bangladesh holds particular importance as a brotherly country and expressed optimism about strengthening existing cooperation in energy security and other development areas.

The discussions with Saudi Arabia are significant as Bangladesh seeks additional international partners to support its energy needs while dealing with uncertainty in global LNG markets.

ACWA Power expresses interest in renewable energy investment

Amit also met Samir J Serhan, chief executive officer of Saudi energy and water company ACWA Power, to discuss investment opportunities in Bangladesh's renewable energy sector.

ACWA Power expressed interest in investing in the sector, according to the ministry's press release.

The meetings took place on the sidelines of the 17th International Energy Forum in Riyadh. Members of the Bangladesh delegation and officials from the Bangladesh Embassy in Saudi Arabia were also present.

Indications are there that the International Monetary Fund (IMF) might extend a loan of US$4.5 billion under a new programme to Bangladesh.Bangladesh economic news

Officials said the preliminary positive indications came as a Bangladesh delegation led by Finance Minister Amir Khosru Mahmud Chowdhury Monday opened negotiations on the sidelines of the IMF-World Bank annual meetings in Bangkok.

The IMF lending recipe that covers three years is meant to help meet the country's external financing needs and support economic reforms.

Preliminary discussions between Bangladesh and the Washington-based multilateral lender have figured out a $4.5-billion package, although the final amount, financing terms and policy conditions have yet to be agreed, officials at the Ministry of Finance (MoF) said.

The proposed programme is expected to provide balance-of-payments (BoP) support to Bangladesh, which continues to face pressure from elevated inflation, external-financing requirements, weak revenue mobilisation and vulnerabilities in the banking sector.

After a meeting with the IMF, Finance Minister Amir Khosru Mahmud Chowdhury Monday told journalists that they completed first round of discussions with the IMF on the day and would sit again on Tuesday or Wednesday.

A senior MoF official said the IMF spoke of the types of conditions that are lookalike with the terminated previous loan programme.

"IMF's talks are dominating some conditions like improvement in Bangladesh's tax-GDP ratio, baking sector reforms, rationalizing subsidies in energy and agriculture sectors and tightening monetary policy to control inflation," the MoF official told The Financial Express.Trade policy analysis

The proposed assistance would come at a critical time for Bangladesh's economy, as policymakers seek to rebuild foreign-exchange reserves, stabilise prices and maintain external-sector stability.

Balance-of-payments support would help the country meet its external-financing requirements and strengthen its capacity to manage foreign-exchange pressures.

The actual impact, however, would depend on the disbursement schedule, financing terms and implementation of the agreed policy measures.

The MoF official said: "After the Bank-Fund meeting, a mission from the IMF is likely to visit Bangladesh within a month. Then the final talks on the terms and conditions of the proposed loan will be finalised."

Meanwhile, Bangladesh has already received substantial financial assistance under the last IMF-supported arrangements, which include the Extended Credit Facility (ECF), Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF).

On January 30, 2023, the IMF approved a $4.7-billion loan arrangement for Bangladesh. The then Awami League government had sought the assistance through a letter sent in July 2022.

Of the seven instalments under that arrangement, $3.64 billion had been disbursed in five instalments.

During the interim government, the size of the loan was increased by $800 million to $5.5 billion in June 2025.Read Market News

Later, the present government decided to scrap the ongoing programme and requested a fresh financial arrangement to reflect changing economic circumstances and its reform priorities.

The MoF official said banking-sector reform is expected to be a major component of the proposed programme.

Bangladesh's banking industry has faced longstanding weaknesses, including non-performing- loan (NPL) buildups, capital deficiencies and governance concerns.

The government is also likely to face pressure to increase domestic revenue collection, which remains low relative to the size of the economy.

Potential measures include widening the tax base, improving tax administration and reviewing exemptions and duties. Any additional revenue measures would need to be balanced against their effects on inflation, households and businesses.

The IMF has also emphasised the need for prudent fiscal and monetary policies, improved exchange-rate flexibility and better-targeted subsidies.

Meanwhile, the Finance Minister said on Monday in Bangkok that Bangladesh is optimistic about securing a new loan programme with the IMF and is negotiating a World Bank partnership framework that would provide a financial cushion against mounting energy costs and capital shortfalls in the banking sector.

The government is seeking support for the next two to three years to manage the pressure on public finances from high oil and gas prices amid ongoing wars and global economic uncertainty, while exploring ways to address capital deficiencies in banks with support from the International Finance Corporation (IFC).Bangladesh economic news

"We need a cushion against that pressure. We need this cushion for two to three years under the partnership to support our deficit in energy and banks," he told journalists at the IMF-World Bank Annual Meetings in Bangkok.

He said discussions with both the IMF and the World Bank were progressing, expressing confidence that outstanding issues would be resolved through further negotiations and a phased implementation of reforms.

"We are optimistic on the loan," Mr Khosru said.

He wouldn't disclose the amount Bangladesh seeking from the IMF. He would discuss the matter later.

On the World Bank's proposed partnership framework, he said negotiations were underway and a team from the lender would visit Dhaka to assess the country situation.

"We are in discussion with the World Bank on a partnership framework agreement. We will have a programme with the World Bank which will be pretty good," he said.

He said the government expected revenue earnings to rise soon, with the tax-to-GDP ratio gradually increasing as fiscal measures took effect.

The finance minister dispels musings that the government is uncomfortable with the IMF's position, saying that its policies are broadly aligned with the public mandate and that discussions with the lender are continuing.Trade policy analysis

The finance minister said the IFC expressed interest in helping address capital shortages in Bangladesh's banking sector and the private sector, adding that representatives of the World Bank's private-sector lending outfit would visit Dhaka.

"Interestingly, IFC showed interest. They are coming to Dhaka. IFC is working on recapitalisation of banks and the private sector," he said.

He has noted that capital deficiencies affected a number of banks and private businesses, making fresh investment important for restoring financial strength and supporting economic activity.