The central bank will take the funds as placements, generally known as deposits, for at least three years at the 9.50% policy rate, while providing the remaining BDT 190 billion from its own resources.

In banking, 'placement' generally means placing surplus funds with another bank or financial institution for a specified period and at an agreed interest rate.

The 17 banks are Sonali, BRAC, City, Pubali, Dutch-Bangla, Eastern, Bank Asia, Agrani, Rupali, Mutual Trust, Uttara, Prime, National Credit and Commerce, Mercantile, Trust, Jamuna and Southeast.

The package targets some of the economy’s weakest areas:

→ BDT 200b for closed industrial and services-sector enterprises

→ BDT 50b for CMSMEs

→ BDT 100b for agriculture and rural activities

→ BDT 30b for export diversification

→ BDT 30b for developing the northern region as an agricultural hub

However, the initiative addresses a key dilemma in Bangladesh’s banking sector: banks have excess liquidity, but private-sector credit demand remains weak and lenders remain cautious amid elevated NPLs and economic uncertainty.

By shifting surplus liquidity towards targeted refinancing and pre-financing schemes, the package could help restart closed businesses, stimulate investment and generate employment.

Actually, effective implementation, borrower selection, recovery mechanisms and banks’ willingness to take productive-sector credit risk will determine the ultimate impact.

The private sector is expected to access the facilities at an average interest rate of7.0%, creating a significant interest-rate advantage for targeted borrowers.

The real test now is execution: whether BDT 600b can translate from liquidity support into actual investment, production and jobs.

BBN/SSR/AD

Under the new arrangement, resident entities acting as strategic partners, local agents or authorised representatives of foreign companies may arrange the required bid bonds, performance guarantees or SBLCs for projects in Bangladesh, according to a notification issued by the Bangladesh Bank (BB) on Thursday.

The central bank issued the notification as a partial modification of the existing provisions governing the issuance of guarantees in favour of local project authorities on behalf of resident entities, according to officials.

They also said the facility will apply where the underlying contractual arrangements permit the acceptance of such guarantees or SBLCs by the relevant project authorities or procuring entities.

The resident entity must also have a bona fide contractual or commercial relationship with the foreign awardee, supported by documentary evidence.

The central bank said Authorised Dealer (AD) banks must ensure that the exposure arising from such guarantees or SBLCs is adequately covered by collateral or counter-security, commensurate with the nature and extent of the exposure and based on the banker-customer relationship and underlying contractual arrangements.

The contractual arrangements must also provide for appropriate reimbursement and compensation to resident entities for costs, liabilities and expenses arising from the guarantee or SBLC.

They should specify, where appropriate, how any amount payable upon invocation will be settled by the foreign company.

The ADs will have to issue such guarantees and SBLCs in accordance with their applicable credit norms, risk-management policies and prudential requirements, including the prescribed single-borrower exposure limit. Approval from the Board of Directors or other competent authority, as applicable, will also be required.

BBN/SSR/AD

The decision was taken at the 13th meeting of the Monetary Policy Committee (MPC), the first for fiscal year (FY), 2026-27, held at the central bank's headquarters in Dhaka on Thursday with Bangladesh Bank (BB) Governor Md Mostaqur Rahman in the chair.

The revised rate will take effect from August 2, 2026, according to a press statement.

BBN/SSR/AD

Mr. Zhang will oversee ADB’s operations in Bangladesh—one of its largest country programs—further strengthen the bank’s long-standing partnership with the Government of Bangladesh, lead strategic policy dialogue with stakeholders, and guide the preparation of ADB’s next country partnership strategy.

 “It is a privilege to serve as ADB Country Director for Bangladesh at an important stage in the country’s development,” said Mr. Zhang. “Bangladesh has demonstrated remarkable resilience and economic progress over past decades. ADB remains committed to working closely with the government and development partners to create quality jobs, strengthen resilience, accelerate private sector-led growth, and deepen regional cooperation through innovative financing, knowledge solutions, and high-quality investments.”

Mr. Zhang brings more than 30 years of professional experience in sustainable development, including over 20 years with ADB. Throughout his career, he has led transformative programs and strategic initiatives in agriculture, food systems, water resources, environment, natural capital, and rural development. He has also built strong partnerships with governments, development institutions, academia, and the private sector.

Prior to this appointment, Mr. Zhang served as Senior Director of ADB’s Agriculture, Food, Nature, and Rural Development Sector Office, where he guided the bank’s strategic and operational engagement in advancing sustainable and resilient development across the region.

Mr. Zhang is a national of the People’s Republic of China. He holds a doctorate in environmental engineering from Tsinghua University, a master’s degree in water resources management, and a bachelor’s degree in hydrology from Sichuan University. He also completed executive education at Harvard Business School.

BBN/SSR/AD

Under the framework, authorised dealer (AD) banks are allowed to process outward remittances through partnerships with foreign payment platforms and service providers, termed Cross-Border Digital Payment Service Providers (CDPSPs), according to a notification issued by the Bangladesh Bank (BB) on Wednesday.  

A core feature of the framework is the introduction of Digital Value Accounts (DVAs) - digital wallets or stored-value accounts opened in the name of users. These accounts will operate under a Master DVA maintained by the respective bank, ensuring regulatory oversight.

DVAs may be used for travel-related foreign exchange - including private, medical, and official purposes - as well as for payments such as membership fees, IT services, visa fees, and hotel bookings. DVA users are allowed to make cross-border online payments up to a specified limit.

The facility may also be extended against balances held in Export Retention Quota (ERQ) and Resident Foreign Currency Deposit (RFCD) accounts.

Banks shall obtain prior regulatory acknowledgement from the central bank before launching such services, providing details of partnerships, system integration, and compliance arrangements.

The initiative signals a shift towards integrating digital payment channels into the regulated financial system. Previously, banks were permitted to use OPGSPs primarily for inward remittances.

Market observers believe the move could attract global payment platforms such as PayPal and Stripe to explore Bangladesh market, particularly in freelancing, e-commerce, and cross-border service trade.

BBN/SSR/AD

Dhaka, Bangladesh (BBN)- The central bank has introduced a structured framework to regulate import trade into Free Trade Zones (FTZs), aiming to facilitate transactions while ensuring prudent risk management by banks.

Under the framework, Authorized Dealer (AD) banks and Offshore Banking Units (OBUs) will handle FTZ-related transactions in line with foreign exchange regulations, according to a notification issued by the Bangladesh Bank (BB) on Thursday.

Eligible importers include industrial enterprises, importers on record authorized to undertake trading activities, and logistics service providers operating within FTZs, it added.

The framework allows consignment-based imports, where ownership remains with foreign suppliers until goods are used in production or sold. Banks will not treat such goods as inventory or assume exposure until ownership is transferred.

Transactions involving FTZs are clearly defined in the circular. Purchases by domestic buyers will be treated as imports, while sales by FTZ enterprises will be treated as exports for sellers and imports for buyers, requiring compliance with EXP and IMP procedures. All payments shall be settled in freely convertible foreign currencies.

Goods under consignment may remain in FTZs for up to 48–60 months, while usance imports, including buyer’s and supplier’s credit, are capped at 270 days.

AD banks may extend financing similar to that for specialized zones, while OBUs can provide foreign currency financing within regulatory limits, officials at the central bank explained.

BBN/SSR/AD

Eligible manufacturing and service-sector enterprises operating both within and outside specialized zones, including EPZs, EZs and High-Tech Parks, will be able to obtain short-, medium- and long-term foreign loans subject to specified conditions, according to a notification issued by the Bangladesh Bank (BB) on Wednesday.

For short-term borrowings of less than one year, companies outside specialized zones may obtain interest-free loans for working capital purposes without prior approval from the Bangladesh Bank. They may also avail cost-bearing loans at an all-in-cost of up to 3.0 per cent per annum for bona fide business purposes, including input procurement. Such loans must be repaid in a bullet payment at maturity and may be rolled over for a maximum aggregate tenor of three years.

For medium-term borrowings of one to five years, the central bank has allowed interest-free loans of up to US$ 50 million and cost-bearing loans of up to $5.0 million for capital expenditure, including the purchase of machinery, equipment and construction.

Long-term borrowings of more than five years will also be allowed, with borrowing costs capped at 3.0 per cent per annum where applicable, officials at the central bank explained.

The notification also allows outstanding borrowings to be converted into equity subject to existing regulations.

Industry insiders believe that the new measures are expected to improve access to affordable overseas financing and encourage greater foreign investment in Bangladesh.

BBN/SSR/AD

Dhaka, Bangladesh (BBN)- Bangladesh's foreign exchange reserves have once again demonstrated resilience. Despite settling US$1.48 billion in import payments to the Asian Clearing Union (ACU), gross reserves remain comfortably above $36.5 billion, underscoring the country's improving external sector position.

Key Highlights

📌 Gross reserves: US$36.52 billion (after ACU payment)

📌 BPM6 reserves: US$31.87 billion

📌 ACU payment: US$1.48 billion (down from US$1.51 billion previously)

📌 Bangladesh Bank purchased: US$6.42 billion from commercial banks since adopting the market-based exchange rate regime in July 2025.

Why are reserves improving?

The stronger reserve position is being supported by several factors:

• Record remittance inflows, which continue to strengthen foreign currency liquidity.
• Lower import payment obligations, reflecting subdued import demand and easing pressure on the external account.
• Higher external financing, including government borrowing from development partners.
• Bangladesh Bank's dollar purchases from commercial banks, which have helped rebuild reserves while maintaining exchange rate stability.

Why does it matter?

Maintaining reserves above US$36 billion even after a large ACU settlement signals a stronger external buffer. According to Bangladesh Bank, the current reserve level is sufficient to cover more than six months of imports, reinforcing confidence in the country's ability to manage external payment obligations.

Bottom Line

Bangladesh's external sector is showing signs of gradual strengthening. While challenges remain—particularly export performance and global uncertainties—the combination of strong remittance inflows, prudent reserve management, moderated imports and sustained external financing is helping rebuild the country's foreign exchange cushion.

BBN/SSR/AD

Seven key producers—including Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman —will collectively increase output by 188,000 barrels per day, marking the fifth consecutive monthly increase.

The decision reflects growing confidence that oil supply disruptions caused by the recent Iran–Israel conflict are easing as shipping through the Strait of Hormuz gradually resumes. Consequently, Brent crude has retreated to around US$72 per barrel, compared with peaks above $120 during the conflict.

What does this mean?

✅ Supply is recovering: OPEC+ is signalling that the market can absorb higher production as export routes reopen.

✅ Oil prices remain anchored: The return of Brent to pre-war levels suggests that supply concerns have eased, reducing immediate inflationary pressure on energy-importing economies.

✅ Geopolitical risks remain: Although tanker traffic has resumed, Western navies continue to describe the security threat in the Strait of Hormuz as substantial. Any renewed disruption could quickly reverse the recent decline in oil prices.

Why it matters for BangladeshFor Bangladesh, softer oil prices could ease the import bill, reduce pressure on foreign exchange reserves, improve the current account balance, and help contain domestic inflation. However, policymakers should remain cautious, as geopolitical tensions in the Gulf continue to pose significant upside risks to global energy prices.

Bangladesh spent nearly $7.5 billion on petroleum imports in the first nine months of FY2025–26, with the annual import bill likely to reach around US$10 billion by the end of the fiscal year.

Bottom line: OPEC+ is shifting its focus from crisis management to supply normalization. Yet, with geopolitical uncertainty still lingering, the global oil market is likely to remain highly sensitive to developments in the Middle East.

BBN/SSR/AD

Authorised dealer (AD) banks are now allowed to offer FRAs to importers availing foreign currency import loans, according to a circular issued by the Bangladesh Bank (BB) on Thursday.  

The measure is aimed at protecting importers from volatility in global benchmark rates, particularly SOFR.

Under the framework, FRAs are strictly limited to hedging purposes and will be backed by genuine underlying import transactions, officials at the central bank said, adding that speculative or uncovered positions have been expressly prohibited.

The instrument allows importers to lock in an interest rate for a future period, with settlement based on the difference between the agreed rate and the prevailing benchmark.

To ensure prudential discipline, banks are required to fully offset their FRA exposures on a same-day, back-to-back basis, without taking market risk onto their own books, they explained.  

The pricing spread has been capped at 10 basis points, and overall exposure is restricted to 25 per cent of a bank’s average monthly foreign exchange inflows, according to the circular.

The central bank in its circular also emphasizes strong governance, including mandatory ISDA-based documentation, daily mark-to-market valuation, and robust internal risk management practices. Early termination of contracts must be settled at market rates with proper documentation.

Bankers and industry insiders say the move is expected to provide greater certainty to importers, while gradually advancing the country’s derivatives market within a well-regulated framework.

BBN/SSR/AD