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

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

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

Under the framework, trade documents can be submitted, transmitted and verified electronically across approved international trade corridors, according to a notification issued by the Bangladesh Bank (BB) on Wednesday.

The initiative covers both export and import transactions governed by the Uniform Rules for Collections (URC), the Uniform Customs and Practice for Documentary Credits (UCP) and their electronic versions—eURC and eUCP.

Central bank officials said the framework introduces **Electronic Transferable Records (ETRs) as legally recognised alternatives to paper-based trade documents, subject to compliance with applicable legal and technical standards. It also emphasises interoperability, technology neutrality, data privacy and decentralised verification through secure digital mechanisms.

To participate in the pilot, authorised dealer (AD) banks will be required to obtain Bangladesh Bank approval by specifying the proposed trade corridors, counterparties, transaction types and technology arrangements.

The framework will support the electronic handling of key trade documents, including invoices, transport documents and drafts.

However, AD banks may continue to require physical documents in jurisdictions where electronic records are not legally recognised.

The framework also requires participating banks to implement robust security measures, including encryption, authentication and comprehensive audit trails to ensure the integrity and authenticity of digital trade documents.

According to the notification, the pilot programme will be implemented in phases, with any future expansion depending on its performance and the outcome of regulatory assessments.

Bankers and industry insiders believe the BB’s latest initiative will enhance the efficiency, transparency and resilience of Bangladesh's trade finance ecosystem while reducing processing time and operational costs in cross-border trade.

BBN/SSR/AD

The country’s gross forex reserves rose to $37.05 billion on the day from $36.31 billion of the previous day as disbursement of the fund by the development partners, officials said.

As per the International Monetary Fund (IMF)’s Balance of Payments International Investment Poisson Manual-six edition, generally known as BMP6, the forex reserves rose to $32.48 billion during the period under review from $31.74 billion, according to the central bank’s latest data.

Earlier on June 14 last, the country’s gross forex reserves rose to $36.10 billion from $35.80 billion of the previous day as disbursement of a fund worth $320 million by the Japan International Cooperation Agency (JICA).

Central bank officials, however, said higher remittance inflows and lower import payment obligations have also contributed to the improvement in the country's foreign exchange reserve position.

Purchasing of the US dollars from commercial banks by the central bank has also helped push up the forex reserves recently, they explained.

The central bank of Bangladesh has so far bought $6.42 billion from banks directly since July 13 last under the prevailing free-floating exchange rate arrangement.

BBN/SSR/AD

According to central bank officials, the country's gross forex reserves increased to $36.10 billion on the day from $35.80 billion a day earlier after the JICA disbursement.

The JICA is a government agency responsible for delivering the bulk of Japan's Official Development Assistance (ODA).

Under the International Monetary Fund (IMF)'s Balance of Payments and International Investment Position Manual, Sixth Edition (BMP6) methodology, the reserves rose to $31.55 billion from $31.24 billion, according to the latest data released by the Bangladesh Bank (BB).

"Our gross forex reserves may touch $37 billion by the end of June if the government secures additional funds from overseas sources," a BB senior said, adding that more foreign financing is expected to be reflected in the reserves shortly.

The improvement in the reserve position comes amid continued inflows from development partners.

Meanwhile, the World Bank has recently approved a $450 million loan to support reforms aimed at strengthening Bangladesh's banking sector and reviving economic growth and job creation.

Earlier, on June 14, the Asian Development Bank (ADB) disbursed more than $1.0 billion in budget support to Bangladesh.

Central bank officials, however, said stronger remittance inflows and lower import payment obligations have also contributed to the improvement in the country's foreign exchange reserve position.

The BB’s dollar purchases from commercial banks under the prevailing free-floating exchange rate regime have further boosted reserves, they explained.

The central bank has bought $6.42 billion from banks since July 13 last year.

BBN/SSR/AD

🔹 Distressed loans crossed the BDT 10-trillion mark, reaching BDT 10.08 trillion by the end of 2025.

🔹 If written-off loans are included, total distressed assets rise to BDT 10.87 trillion—equivalent to almost 60% of the banking sector's total outstanding loans and advances of BDT 18.21 trillion.

📌 Composition of Distressed Assets

• Defaulted loans: BDT 5.57 trillion

• Unclassified rescheduled loans: BDT 2.69 trillion

• Loans under court stay orders: BDT 1.82 trillion

• Written-off loans: BDT 834.79 billion

The scale of distressed assets is larger than Bangladesh's proposed national budget for the fiscal year (FY), 2026-27, and highlights the depth of vulnerabilities within the financial system.

Why does it matter?

Distressed loans are a broader measure of banking-sector stress than NPLs alone. They include non-performing, rescheduled, litigated and written-off loans—assets with elevated recovery risks and weakened repayment prospects.

The central bank attributes the deterioration in asset quality to:

✔️ Imprudent lending practices

✔️ Weak credit oversight and monitoring

✔️ Slow recovery of defaulted loans

✔️ Global geopolitical shocks

✔️ Domestic economic challenges affecting business cash flows

⚠️ Capital Adequacy Under Pressure

The banking sector's Capital-to-Risk-Weighted Assets Ratio (CRAR) deteriorated sharply from 3.08% in 2024 to -2.64% in 2025, far below the Basel III minimum requirement of 10%.

Key takeaway:

The challenge facing Bangladesh's banking sector is no longer limited to rising NPLs. The combination of mounting distressed assets, negative capital adequacy, weak profitability and sluggish loan recovery points to a broader systemic issue requiring decisive regulatory, governance and balance-sheet reforms.

BBN/SSR/AD