The Bangladesh Bank (BB) began hearings yesterday with the top executives of nine non-bank financial institutions (NBFIs) to determine whether there are grounds to oppose their planned liquidation.

The central bank had earlier sent letters asking the NBFIs to attend hearings scheduled yesterday and today at its Dhaka headquarters. Representatives from five finance companies attended yesterday’s session.

At the hearings, NBFIs are required to explain why they should not be liquidated, while BB officials present the case for winding them up, according to central bank officials familiar with the matter.

The nine NBFIs facing liquidation are FAS Finance, Bangladesh Industrial Finance Company (BIFC), Premier Leasing, Fareast Finance, GSP Finance, Prime Finance, Aviva Finance, People’s Leasing and International Leasing.

In November last year, the BB board approved the liquidation of the institutions under the newly framed Bank Resolution Ordinance 2025, the country’s first comprehensive framework for resolving failing banks and NBFIs.

The ordinance outlines procedures for merging, restructuring or closing distressed institutions and sets out the hierarchy for repaying creditors after assets are sold.

Together, the nine institutions account for 52 percent, or Tk 25,089 crore, of total defaulted loans in the NBFI sector as of the end of 2024.

BB data show that as of September 2025, the country’s 35 NBFIs held Tk 29,408.66 crore in non-performing loans (NPLs), equivalent to 37.11 percent of their total disbursed loans of Tk 79,251.11 crore. The sector’s NPL ratio was 35.52 percent a year earlier.

Industry insiders attribute the surge in defaults to large-scale irregularities and scams during the previous government.

For instance, according to a BB probe, PK Halder, former managing director of NRB Global Bank (later Global Islami Bank), allegedly embezzled at least Tk 3,500 crore from four NBFIs – People’s Leasing, International Leasing, FAS Finance, and BIFC.

These institutions are now severely distressed, with more than 90 percent of their loan portfolios non-performing.

BB Governor Ahsan H Mansur recently said individual depositors of the nine NBFIs slated for liquidation may get back their principal amounts before Ramadan in February.

Officials said the government has verbally approved around Tk 5,000 crore to repay non-bank depositors.

Central bank data show the nine NBFIs hold Tk 15,370 crore in deposits, of which Tk 3,525 crore belongs to individual depositors and Tk 11,845 crore to banks and corporate clients.

In May last year, BB warned 20 NBFIs with high levels of defaulted loans after they failed to repay depositors.

Dhaka stocks extended their gains for a third consecutive session yesterday (20 January), as cautious investors remained active on both the buying and selling sides amid political uncertainty.

The benchmark DSEX index of the Dhaka Stock Exchange (DSE) gained 17 points to close at 5,109. The blue-chip DS30 index rose by 6 points to 1,970, while the Shariah-based DSES index added 7 points to finish at 1,031.

Turnover increased by 12.98% to Tk670 crore, up from Tk593 crore in the previous session. Of the 388 issues traded, 210 advanced, 109 declined and 69 remained unchanged.

According to market insiders, the stock market had become oversold after several months of decline, largely driven by political uncertainty. However, as the election draws closer, some of that uncertainty has begun to ease, encouraging a return of fresh investment.

They also noted that the market often shows a positive trend around mid-January, which has further supported investor activity. As a result, trading has picked up on both sides of the market.

Over the past year, political uncertainty and several decisions taken by the market regulator were not positively received by investors. Many investors left the market, while a large number of institutional and high-net-worth investors became largely inactive.

This prolonged weakness pushed down the prices of even fundamentally strong stocks.

Analysts said political uncertainty remains the most important factor shaping investor sentiment. As this uncertainty gradually eases, they expect the market to move in a more positive direction.

However, they added that since the situation has not fully stabilised, institutional and large investors are still staying on the sidelines, keeping trading volume below its potential level.

They believe that if policy stability is ensured and investor confidence returns, the capital market has strong potential to recover in the coming period.

Large-cap sectors showed mixed performance during the session. The telecommunication sector posted the highest gain, rising by 1.41%, followed by engineering, which advanced 0.87%. The fuel and power sector gained 0.40%, while pharmaceuticals rose by 0.39%.

On the downside, the non-bank financial institutions (NBFI) sector slipped by 0.02%, banking fell by 0.13%, and the food and allied sector recorded the biggest loss among large-cap sectors, declining by 0.45%. Block trades accounted for 4.8% of the day's total turnover.

The Chittagong Stock Exchange also closed higher. The CSCX index rose by 28 points to 8,819, while the CASPI index gained 44 points to close at 14,243, reflecting a positive mood across both major bourses.

Grameenphone has secured 10 megahertz of spectrum in the 700 MHz band, often called the “golden frequency” for its wide coverage and strong indoor reach, marking the first-ever allocation of the low-band frequency to a mobile operator in Bangladesh.

The spectrum was assigned at the base price, meaning the government will earn Tk 2,370 crore from the deal. The rate was set at Tk 237 crore per megahertz (MHz).

The allocation will run for 15 years, with payments spread over 10 instalments. If the allocation period ends earlier, the payable amount will be adjusted accordingly.

The approval came yesterday at a joint meeting of the Spectrum Auction Committee and the Spectrum Management Committee, said Major General (retd) Md Emdad ul Bari, Chairman of the Bangladesh Telecommunication Regulatory Commission (BTRC).

The BTRC had fixed January 21 as the auction date. With only one bidder in the race, the regulator proceeded under its single bidder allocation rules.

The move follows Robi Axiata’s decision to withdraw from the auction, citing a “mismatch” between the auction timing and its network priorities. Banglalink and state-owned Teletalk stayed away.

Despite the thin turnout, the regulator went ahead, saying that preparations had been underway since 2024. It also said Robi had shown interest in spectrum from another band, which could be taken up later.

Earlier this month, anticipating a lone bidder, the BTRC revised its auction rules. It cut the maximum spectrum cap for a single operator to 10 megahertz from 15, out of a total 25 MHz on offer.

The regulator said the change was meant to protect competition and keep room for other operators in the future.

The 700 MHz band is valued for its ability to cover large areas and penetrate buildings, making it well suited for rural connectivity and indoor coverage.

With the allocation, Bangladesh formally begins using the 700 MHz band for mobile broadband, a step long viewed as key to improving nationwide network reach and service quality.

Tanveer Mohammad, chief corporate affairs officer of Grameenphone, said, “We have received the acknowledgement letter from BTRC stating Grameenphone’s eligibility for the acquisition of the 700 MHz spectrum, on completion of all applicable regulatory requirements. This reinforces our commitment to strengthening network quality and delivering a superior, reliable experience for our customers across Bangladesh.”

He said, “We appreciate BTRC’s continued support in enabling a future-ready telco ecosystem. This will allow us to further enhance coverage, particularly in underserved and indoor environments, while improving network efficiency and resilience.”

“We look forward to responsibly utilising this spectrum to further elevate service quality and deliver secure, innovative digital services for our more than 85.6 million customers, reinforcing our role as a key enabler of Bangladesh’s digital progress,” he added.

Even so, a large part of the band remains out of reach. Twenty MHz is still locked in a long legal dispute between the BTRC and broadband service provider Always On Network.

Gold prices surged to a record ‌above $4,800 per ounce on Wednesday, as investors sought the metal as a safe haven following a broad selloff in US assets amid heightened tensions between the US and NATO over Greenland.

Spot gold climbed 2.1 percent to $4,862.19 per ounce by 0837 GMT, after scaling a record $4,887.82 earlier in ‌the session. US gold futures for February delivery climbed 2.2 percent to $4,869.40 per ​ounce.

“It’s the loss of trust in the US caused by Trump’s moves over the weekend to tariff European countries and increase coercion in trying to take Greenland. (The move in ‍gold) reflects fears about global geopolitical (tensions),” said Kyle Rodda, a senior market analyst at Capital.com.

On Tuesday, Trump said there was “no going back” on his goal to control Greenland, refusing to rule out taking the Arctic island by force and lashing out at NATO allies.

He later said, “we will work ‍something out where NATO is going to be very happy and where we’re going to be very ‌happy.” Meanwhile, ‌French President Emmanuel Macron said Europe would not give in to bullies or be intimidated, in a scathing criticism of Trump’s threat of steep tariffs at Davos.

“I think crossing $4,800 just reinforces that people don’t want to sell gold before $5,000. It’s a combination of the traditional supporters for gold, which is rising debt, ​a weakening dollar and geopolitical uncertainty,” said Nicholas Frappell, global head of institutional markets at ABC Refinery.

The dollar index languished at a near one-month low after White House threats over Greenland triggered a broad ‍selloff in US assets, from the currency to Wall Street stocks and Treasury bonds.

A weaker dollar makes greenback-priced metals cheaper for overseas buyers.

Stockbrokers have urged the capital market regulator to revise the existing sector classification system of the Dhaka Stock Exchange, arguing that the outdated framework limits meaningful market analysis and weakens the market's appeal to global investors.

In a letter sent to the Bangladesh Securities and Exchange Commission today (21 January), the DSE Brokers Association of Bangladesh (DBA) requested the regulator to initiate a comprehensive review of the current classification structure and consider adopting an internationally aligned model in consultation with relevant stakeholders.

The letter was signed by DBA President Saiful Islam.

At present, the DSE follows a sector classification system comprising 22 sectors, including government bonds, corporate bonds and mutual funds.

According to the brokers, this structure has remained largely unchanged since its introduction many years ago, despite significant evolution in global capital market practices.

In contrast, most international markets now rely on widely accepted frameworks such as the Global Industry Classification Standard (GICS), jointly developed by MSCI and Standard & Poor's, or the Industry Classification Benchmark (ICB).

Under GICS, companies are grouped into 11 sectors, 25 industry groups, 74 industries and 163 sub-industries, offering what the brokers described as a more detailed, consistent and globally comparable structure.

Such frameworks, the brokers said, enable investors to better assess sectoral trends, compare markets across countries and make informed portfolio allocation decisions.

In its letter, the DBA highlighted that the limitations of the existing DSE classification are evident in several company-level examples. Marico Bangladesh Limited is currently grouped under "Pharmaceuticals and Chemicals," while British American Tobacco Bangladesh is classified as "Food and Allied."

Under international standards such as GICS, both would fall under the consumer staples sector, which the brokers said better reflects their main business activities.

Similarly, consumer-focused companies such as Walton, Singer, Bata and Apex would be classified under consumer discretionary, aligning them with global peers that are sensitive to changes in consumer demand and income levels.

The brokers said such mismatches create analytical distortions for investors, researchers, policymakers and international stakeholders. Sector-based performance analysis plays a crucial role in understanding economic cycles, consumption patterns and income trends.

For example, strong gains in consumer discretionary stocks often signal rising household incomes and economic expansion, while the outperformance of defensive sectors like utilities may indicate heightened economic caution.

An outdated or inconsistent classification system, they said, reduces the reliability of these signals.

The DBA said bringing the DSE's sector framework into line with global standards would improve transparency, strengthen market analysis and allow more meaningful comparisons with international markets.

This, it added, could help attract foreign portfolio investment and strengthen the stock market's role as an indicator of the wider economy.

The government has allowed the Bangladesh Petroleum Corporation (BPC) to import liquefied petroleum gas through government-to-government deals amid a nationwide shortage of cooking gas cylinders and a sharp rise in prices.

The situation is being attributed to supply shortages and the authorities believe this move by the government would ease the crisis.

But a number of BPC officials said this would unlikely to bring relief anytime soon. Because, the corporation currently lacks the specialised lighterage vessels and dedicated jetties needed to transport the liquefied petroleum gas (LPG).

Because of these logistical constraints, imports cannot begin immediately, according to a number of BPC officials.

Until now, LPG imports have been handled mainly by the private sector.

According to the current arrangement, BPC is allowed to import only bulk LPG -- gas brought in large tanks or vessels -- which private operators later bottle at their own terminals before selling it in the market.

BPC will supply LPG only to approved private operators and will not be involved in bottling or retail sales.

Market insiders say weak market management and poor oversight have also contributed to the current gas cylinder crisis, but these issues are being overlooked as the authorities rush to boost supply.

“We have several infrastructural limitations, as we have never imported this type of LPG before,” a BPC official said on condition of anonymity.

“Even if we import LPG, we will not sell it directly to consumers. The same private players who currently dominate the market will handle distribution, meaning they can still influence supply and prices,” he added.

PERMISSION GRANTED, BUT CONDITIONS APPLY

According to BPC sources, the corporation first sought permission to import LPG on January 10. The energy ministry gave verbal consent on January 18, followed by written approval on Tuesday.

The approval letter, addressed to BPC Chairman Md Amin Ul Ahsan and signed by Shahina Akhter, senior assistant secretary of the Energy and Mineral Resources Division, allows LPG imports under specific conditions.

These require BPC to consult the LPG Operators Association of Bangladesh (LOAB) to finalise operators, import volumes, payment arrangements, and plans for unloading and distribution, with the ministry granting final approval.

On Tuesday, Energy Adviser Muhammad Fouzul Kabir Khan told The Daily Star that imports must be increased if the government wants to keep the country’s LPG market under control.

“The government’s involvement in the sector would make market monitoring easier, as we would be able to regularly oversee sales and ensure fair pricing,” he said.

He added that BPC officials are already reviewing potential sources for government-to-government imports and expressed hope that the crisis would be resolved soon.

Mani Lal Das, general manager (commercial and operations) at BPC, told The Daily Star that initial discussions would focus on suppliers in Indonesia, Qatar and the United Arab Emirates, countries from which Bangladesh already imports other petroleum products.

“We are preparing to send emails to these companies and will move ahead with those that can offer competitive prices, flexible terms and quick delivery,” he said.

Acknowledging logistical challenges for BPC’s first LPG imports, he said LPG cargoes usually arrive at the outer anchorage near Kutubdia and must be transferred to specialised lighterage vessels for unloading.

“However, we do not have such vessels or jetties,” he added.

To address the issue, Das said BPC is considering importing LPG in smaller consignments of 5,000 to 7,000 tonnes or working with suppliers that can provide three specialised lighterage vessels.

“One vessel would serve the Khulna-Daulatdia route, while two would be used in the Chattogram zone,” he added.

He expressed hope, saying discussions with potential suppliers are ongoing and that a final decision is expected within days.

However, a member of BPC’s procurement committee, speaking on condition of anonymity, said the entire process could take at least two months.

SUPPLY NOT THE MAIN ISSUE

Meanwhile, market data suggest that supply constraints are not caused by imports.

Over the past three years, LPG imports steadily increased: 12.23 lakh tonnes in 2023, 14.42 lakh tonnes in 2024, and 14.65 lakh tonnes in 2025, totalling 41.3 lakh tonnes.

In the last six months of 2025, imports rose 18 percent compared with the first half of the year, while average import costs fell 14 percent -- from Tk 87 per kg to about Tk 75 per kg, according to National Board of Revenue data. Most of the 14.65 lakh tonnes imported in 2025 arrived during this period.

Despite stable imports and lower costs, LPG prices remain high, raising concerns about artificial shortages. Retail prices are still much higher than government-set rates. In January, the government raised the price of a 12kg LPG cylinder by Tk 53 to Tk 1,306, but in Dhaka and Chattogram, it is selling for Tk 1,750 to Tk 2,100 -- Tk 400 to Tk 750 above the official rate.

Nazer Hossain, vice-president of the Consumers Association of Bangladesh, said the issue is not the volume of imports but poor market management.

“Over the past six months, LPG imports have risen, and average import costs have fallen, yet prices have increased, creating an artificial shortage,” he said.

“If the government imports LPG only to hand it over to the same suppliers, the crisis will not end. Alongside imports, distribution and market monitoring must be strengthened,” he added.

BPC officials also said that 98-99 percent of the LPG market is controlled by the private sector, limiting the government’s ability to intervene effectively. While 25 companies import LPG, just four dominate, accounting for 57 percent of total imports.

According to NBR data, Omera Petroleum Limited has the largest share at 17.96 percent, followed by Meghna Fresh LPG Ltd at 16.24 percent. Jamuna Spacetech Joint Venture and United Aygaz LPG Ltd control 12.38 percent and 9.11 percent, respectively.

Global liquefied natural gas (LNG) output is set to jump this year, easing constraints seen since the 2022 Ukraine war and dampening prices, which could spur demand including from top importers China and India, analysts say.

This year marks the start of a large wave of supply that analysts expect to last until 2029, depressing prices that could drive more demand from emerging economies.

“2026 is expected to be a transitional year for the LNG market,” said Kpler. “The market is expected to move away from tightness toward ample availability, with sufficient supply even as winter demand and storage needs emerge, particularly in Europe.”

SUPPLY

Estimates from S&P Global Energy, Kpler and Rystad Energy forecast at least 35 million metric tons of new capacity coming online this year, primarily from the US and Qatar. This could lift global LNG supplies by up to 10 percent year-on-year, with 2026 supply forecasts from Kpler, Rystad, ICIS and Rabobank in a range of 460 million and 484 million metric tons.

Projects like Golden Pass LNG on the US Gulf Coast and Qatar’s North Field expansion are expected to contribute sizable volumes, while output is set to ramp up from Corpus Christi and Plaquemines LNG in the US, LNG Canada and the Greater Tortue Ahmeyim projects offshore Senegal and Mauritania.

The additional supply will pressure global prices, with analysts from Rabbobank, Rystad and Kpler predicting a range of averages for Asian spot LNG from $9.50 to $9.90 per million British thermal units (mmBtu) in 2026, down from an average of $12.45 in 2025.

Rystad and Kpler gave forecasts for gas prices at the Title Transfer Facility in the Netherlands, the European benchmark, to average in a range of $9.50 to $9.74 per mmBtu this year, down from an average of $14.20 in 2025.

With Asia LNG and European gas prices easing, price spreads to US benchmark Henry Hub will narrow, squeezing US LNG export margins at a time when feedgas costs are rising, said analysts at Vortexa, Rabobank and S&P Global Energy.

CHINA, INDIA TO DRIVE DEMAND

Asia’s LNG demand, which slipped in 2025 on price sensitivity and competition from alternative fuels, is forecast to recover by 4 percent to 7 percent this year led by China and India as lower prices spur additional spot purchasing, fuel switching and stockpiling, according to a range of outlooks from Rystad, Kpler and S&P Global Energy.

As winter grips northern China, 72-year-old farmer He Wenxiang runs his gas boiler only occasionally to warm the bedroom radiator.

New contracts will also add to rising imports, with Chinese demand expected to rise by 6 million to 7 million tons and Indian demand by 5 million tons, said Kpler analyst Nelson Xiong.

“Much of the new contracted supply should be absorbed domestically,” he said.

China’s 2025 imports slumped amid weak industrial demand, US tariffs, and strong domestic and piped gas supply. Demand this year is set to rise but may still fall short of 2024 levels, said Rystad Energy analyst Ole Dramdal, forecasting imports at 76.5 million tons this year, up 12 percent from 2025, as Beijing prioritizes domestic production.

However, a substantial surplus of China’s contracted volume will likely be remarketed as the country’s long-term LNG contracts are expected to reach above 80 million tons per year, Dramdal added, while Turkey, Malaysia and Taiwan will see their combined imports rise by 6.2 million tons in 2026.

EUROPE ABSORBS SUPPLY

Europe became a driver for global LNG demand after it cut Russian supply following Moscow’s full-scale invasion of Ukraine.

Kpler sees Europe’s 2026 LNG imports rising by 22 million tons while Rystad forecasts an increase of 20 million tons and Energy Aspects and ICIS see gains of around 13 million tons. This is driven by higher storage injection needs after lower end-of-winter inventories, higher domestic gas consumption amid softer average TTF prices, growing Turkish demand, and its role as a balancing market for rising Atlantic basin supply.

“Europe has been poised to absorb a large share of the new LNG supply, showing the strongest near-term incremental demand,” said Rystad’s Dramdal.

Europe will begin phasing out Russian piped gas and LNG this year, with analysts expecting LNG cargoes from the Yamal project to find alternative destinations like Turkey and Egypt, while Europe backfills the displaced volumes with Atlantic basin supply.

In the first half of the current 2025-26 fiscal year – from July to December – revenue collection by the National Board of Revenue (NBR) increased by 14% compared with the same period of the previous fiscal year.

However, collection fell Tk45,976 crore short of the target. NBR officials and experts attribute the large deficit primarily to the ambitious targets set for the current year. They also cite the lack of the expected momentum in the economy and insufficient enthusiasm among field-level officials to boost revenue by preventing evasion.

According to the latest data released by the NBR, revenue collection in December rose by just over 10% compared with the same month of the previous fiscal year. Growth rates in earlier months had been higher. In December alone, the shortfall against the target amounted to Tk15,181 crore.

Statistics show that against a target of Tk2,31,205 crore for the first six months, actual revenue collection stood at Tk1,85,229 crore. During this period, collection increased by over 14% compared with the same period last fiscal year.

However, to meet the overall target set for the NBR, revenue collection would need to grow by 53% compared with last year.

Experts say there is no precedent in Bangladesh's history for revenue growth at such a high rate.

Towfiqul Islam Khan, additional research director at the Centre for Policy Dialogue (CPD), told The Business Standard, "At the time of the last budget, we had already said that this target was unattainable. Later, another Tk55,000 crore was added to the target. As a result, the total target has become quite ambitious."

"As a result, there could be a large shortfall at the end of the year," he said.

He added, "There is no explanation as to what basis the government added an additional Tk55,000 crore to the NBR's target. It may have been done to align with IMF targets, but this is nothing more than 'eye-wash'."

Md Farid Uddin, a former member of the NBR, said, "There is no likelihood of such momentum in the economy over the next six months that would make it possible to achieve such a large target. This means the institution is heading towards a massive shortfall compared with the target."

He said that since the 2016–17 fiscal year, the government has been presenting large expenditure budgets, which led to correspondingly high revenue targets, resulting in deficits every year.

However, he noted that given the size of Bangladesh's economy, achieving this level of revenue collection is not impossible. But the necessary reforms have not been undertaken. As a result, it will not be possible to formalise the largely informal economy – accounting for more than half of economic activity – and revenue will not be collected in line with the targets.

A tax zone commissioner at the NBR, speaking on condition of anonymity, said that even the target set at the beginning of the year would have been difficult to achieve under the current circumstances. With the target later increased further, achieving it has become practically impossible.

At the start of the fiscal year, the NBR's revenue target was set at Tk4,99,000 crore. Last month, it was raised to Tk5,54,000 crore.

The official added that with an election scheduled for February, there are no signs of a sudden acceleration in the economy thereafter. Even if momentum does pick up, revenue collection will not increase at such a high rate in practical terms.

According to NBR data, in the first half of the fiscal year, income tax collection increased by 14.67%, VAT by nearly 20%, and import tax growth remained below 7%.

Oil prices fell on Wednesday as an expected build-up of US crude inventories outweighed a temporary halt in output at two large fields in Kazakhstan and geopolitical pressure from US threats of tariffs over its bid to gain control of Greenland.

Brent futures fell 97 cents, or 1.5 percent, to $63.95 a barrel at 0745 GMT. The US West Texas Intermediate crude contract lost 78 cents, or 1.3 percent, to trade at $59.58 a barrel.

Both contracts closed nearly $1 a barrel, or 1.5 percent higher, in the previous session after Opec+ producer Kazakhstan halted output at the Tengiz and Korolev oilfields on Sunday due to power distribution issues. Strong China economic data was also positive.

Oil production at the two Kazakh fields could be halted for another seven to 10 days, three industry sources told Reuters.

The oil output halt at Tengiz, one of the world’s largest oil fields, and Korolev is temporary, and downward pressure from an expected rise in US crude inventories along with geopolitical tension will persist, IG market analyst Tony Sycamore said on Wednesday.

US President Donald Trump’s promise of fresh tariffs on European nations if no deal for the US to gain control of Greenland was reached is adding pressure to the oil markets because the tariffs risk slowing economic growth.

Trump said on Tuesday there was “no going back” on his goal to control Greenland.

US crude oil and gasoline stockpiles were expected to have risen last week, while distillate inventories likely fell, a preliminary Reuters poll showed on Tuesday.

Six analysts polled by Reuters estimated on average that crude inventories rose by about 1.7 million barrels in the week to January 16.

The American Petroleum Institute weekly inventory data is due at 4:30 p.m. EST (2130 GMT) on Wednesday, and the Energy Information Administration, the statistical arm of the US Department of Energy, at 12 p.m. EST (1700 GMT) on Thursday, both a day later due to a US federal holiday on Monday.

As winter grips northern China, 72-year-old farmer He Wenxiang runs his gas boiler only occasionally to warm the bedroom radiator.

While that inventory growth would be negative for oil prices, Gregory Brew, senior analyst with the Eurasia Group consultancy, said the potential for US-Iran tensions to re-escalate would help elevate oil prices.

Trump threatened to strike Iran over its violent crackdown on anti-government protests earlier this month.

Any attack on Iranian Supreme Leader Ayatollah Ali Khamenei would trigger a declaration of jihad, or holy war, the Iranian Students’ News Agency quoted Iran’s national security parliamentary commission as saying on Tuesday.

“While the US demurred from striking Iran immediately, tensions are likely to remain high as additional US military assets move to the Middle East and diplomacy to de-escalate tensions fails to make progress,” Brew said in a note.

Tax compliance among the public will not improve unless transparency is ensured in how tax revenues collected from people are spent, economists said at a seminar in Dhaka today (21 January).

"As long as people can't see where the money collected from them is being spent, tax compliance will not develop," said Rashed Al Mahmud Titumir, professor at the Department of Development Studies of the University of Dhaka, at the seminar held at the Bangladesh Development Bank Limited (BDBL) building.

Titumir said taxpayers want to know whether their money is being spent for their benefit. Stating that people have lost trust in the revenue system, he said, "This is because there is no fairness in it."

Masud Khan, chairman of Unilever Consumer Care, raised similar concerns. "What do I receive in return for the tax I pay? In other countries, taxpayers receive many services for free," he said.

"If people could understand that paying tax brings them benefits, they would be more willing to pay," he added.

He said only 20% of tax-eligible people in the country currently pay taxes, while the burden created by the remaining 80% who do not pay falls on that 20%.

Participants said corruption and mismanagement in previous governments led to the wastage of taxpayers' money. They also criticised the National Board of Revenue's policy of collecting minimum tax, arguing it undermines fairness. It was noted that Bangladesh is the only country where minimum tax is collected in this way.

Minimum tax refers to tax deducted at source at a fixed rate. Even if a company makes less profit than the tax deducted – or incurs a loss – the deducted amount is not refunded. Speakers said this goes against the basic principle that tax should be paid on income, and that companies often face an effective tax rate higher than the official corporate tax rate.

Online returns

Masud Khan, also described the current online tax return filing system as difficult and confusing, contradicting repeated claims by National Board of Revenue Chairman Abdur Rahman Khan that it is easy.

After the event, Khan told The Business Standard, "My son lives in the US, where tax returns can be filed very easily."

"I asked for his help after failing to complete it myself. He said it was very complicated, and eventually even he could not do it," he added.

The NBR chairman has said at different programmes that "Anyone who can click the 'Like' button on Facebook can fill out an online tax return."

Khan said even after submitting a return, individuals and companies often do not know whether it has been finally accepted.

"After submission, the return may still be selected for audit by the commissionerate, tax intelligence, or the Central Intelligence Cell. Even after that, it may again be audited. As an assessee, I do not know when my return will finally be accepted," he said.

During the event, he highlighted various concerns and objections raised by businesspeople regarding Bangladesh's tax, customs, and VAT systems.

Foreign portfolio investors today (20 January) identified capital gain tax complexities and a limited pool of quality listed companies and a sense of insecurity as major structural barriers holding back Bangladesh's capital market, urging policy reforms, mandatory listings and political stability to unlock long-term growth.

The concerns were raised at a discussion titled "Post-Election 2026 Horizon: Economy, Politics, Capital Market," organised by BRAC EPL Stock Brokerage Limited in Dhaka, where global fund managers, policymakers, bankers and political leaders exchanged views on the future of the economy and financial markets.

Matthias Martinez, a foreign investor from Sweden-based Tundra Fonder, said capital gains tax remains one of the major deterrents for foreign investors in Bangladesh, not because of the rate alone, but due to the administrative complexity involved.

"Capital gains tax creates a significant administrative hurdle for foreign investors," he said, citing Vietnam as an example of a smarter and more investor-friendly approach. "Vietnam deducts tax at the transaction level, which simplifies compliance enormously. Bangladesh needs to think along similar lines."

Martinez also pointed out that Bangladesh suffers from a poor number of investable listed companies compared to its peer economies.

Gordon Fraser from global asset manager BlackRock echoed similar concerns, stressing that easy market access and robust valuation methodologies are essential to attract large institutional funds. "Funds need clarity, liquidity and reliable valuation frameworks. Without these, it is difficult to deploy meaningful capital."

In the keynote presentation, MA Razzaque, chairman of Research and Policy Integration for Development, said Bangladesh's economic trajectory is closely linked to both political and macroeconomic transitions. "The growth prospects for the medium term remain quite strong," he noted, citing International Monetary Fund projections that place Bangladesh's growth at around 6.3% by 2030, provided political transition remains favourable.

Razzaque highlighted the challenges and opportunities arising from Bangladesh's graduation from Least Developed Country status. While the country enjoys strong global competitiveness in the garments sector due to low-cost production, he warned that post-graduation realities would require broader market access and free trade agreements.

"Poor infrastructure, complex regulations, labour rights compliance and environmental standards are not easy challenges to overcome in the short term," he said, adding that Bangladesh must carefully decide whether to delay graduation to better prepare for these structural shifts.

He emphasised that a politically mandated government is crucial to drive difficult reforms, calling the next election "extremely important" for restoring confidence and policy momentum.

Saifuddin Ahmed, commissioner of the Bangladesh Securities and Exchange Commission, said the capital market is designed to provide long-term funding and must focus on quality capital and stronger disclosure standards.

He said reforms are underway in capital issuance, mutual funds and margin rules to ensure transparency and accountability.

"We are also evolving market infrastructure through the redesign of the Dhaka and Chittagong stock exchanges following demutualisation," he added.

Amir Khasru Mahmud Chowdhury, a member of the BNP standing committee, said many of Bangladesh's economic problems stem from a lack of accountability. Expressing hope for a free, fair and transparent election, he said an elected government is essential to restore investor confidence.

"If the capital market becomes fully functional, the government can raise funds domestically instead of relying on external borrowing," he said.

Referring to Bangladesh's IMF loan, which came with stringent conditions, Khasru said, "If the country has a vibrant capital market, the government might not go to the outside for the funds to complete the development projects."

Speakers argued that reform should focus on deregulation rather than further tightening.

Despite these challenges, they maintained that Bangladesh remains relatively well-positioned compared to peer countries, provided reforms are implemented and political legitimacy is restored. "Without an elected government, investors will not gain confidence," one panellist said, adding that accountability is the foundation of market trust.

The discussion also underscored the need for an independent and capable regulator.

Mashrur Arefin, managing director of City Bank and president of the Association of Bankers, Bangladesh, said reforms in the banking sector are ongoing but have sometimes created unintended consequences, such as investor losses from recent bank mergers.

With a view to future expansion of operations, Olympic Industries, a listed company in the food and allied sector, has decided to purchase 19.25 decimals of land at an agreed price of Tk57.75 lakh in Narayanganj.

The company has also decided to invest Tk20 lakh in Tripti Industries as a sponsor shareholder in the name of Olympic Industries.

The board approved an investment decision in land and subscription of ordinary shares in Tripti Industries on 19 January, which was disclosed through the stock exchanges on Tuesday.

Land investment

Olympic Industries said its board approved the purchase of 19.25 decimal land under the mouza Madanpur-6 in Narayanganj district to undertake construction to accommodate future expansion of operations.

The purchaser, Olympic Industries, shall also bear the total registration costs, inclusive of value-added tax, taxes and other charges, the disclosure said.

Investment in Tripti Industries

The board of Olympic Industries has approved an investment of Tk20 lakh in Tripti Industries, divided into 2 lakh ordinary shares worth Tk10 each, as a sponsor shareholder in the name of Olympic Industries.

The proposed authorised capital of Tripti Industries will be Tk50 crore, divided into 5 crore ordinary shares of Tk10 each, while the paid-up capital will be Tk50 lakh, divided into 5 lakh ordinary shares of Tk10 each.

Previously, there was a listed company named Tripti Industries under the common management of Olympic Industries. In 2008, Olympic Industries and Tripti Industries merged, after which the business has been operating under the name Olympic Industries.

Regarding the investment in Tripti Industries, Mintu Kumar Das, company secretary of Olympic Industries, told The Business Standard: "The board has taken the decision to invest in Tripti Industries. The nature and business line will be decided after the completion of all formalities."

In FY25, Olympic Industries posted Tk2,772 crore revenue with a 6.91% growth year-on-year, and posted a profit of Tk201 crore, which was Tk183.40 crore in the previous fiscal year.

It had paid 30% cash dividend to its shareholders.

On Tuesday, its share price closed at Tk174.70 each at the Dhaka Stock Exchange (DSE).

The National Board of Revenue (NBR) posted a 14 percent growth in revenue collection in the first half of the current fiscal year (FY), yet missed the target for the period by a staggering Tk 46,000 crore or nearly 10 percent.

The development raises questions whether the board would be able to meet its hiked target for the year as experts and officials point out the latest growth is not remarkable, rather a recovery from last year’s turbulence amid a more stable political and business climate.

The revenue board has failed to meet its annual target for at least a decade as of last year.

In the July-December period of FY2025-26, NBR logged Tk 185,229 crore, according to the board’s provisional data.

All three main revenue streams contributed to the rise. Local level value-added tax (VAT) collection reached Tk 70,493 crore, up from Tk 58,759 crore a year earlier, marking around a 20 percent increase.

Income and travel taxes rose to Tk 61,875 crore, a 14.67 percent rise on the same period last year. Customs duties from international trade increased by 6.81 percent to Tk 52,860 crore, due to higher imports following the easing of restrictions.

However, speaking on condition of anonymity, an NBR official said the half-yearly growth was “usual”, largely reflecting a low base caused by last year’s political turbulence.

He also blamed the subdued government development spending and weak private investment for missing the target.

“Slow public-sector projects have weighed on VAT and customs revenue, while cautious investment has constrained corporate tax growth,” the official said, adding that revenue gains are likely to remain modest until economic activity strengthens further.

Experts also caution that the growth is not enough to celebrate.

“A 14 percent growth sounds encouraging, but in reality, it is not a major achievement. It largely reflects a shift from negative to positive territory,” said Fahmida Khatun, executive director of the Centre for Policy Dialogue (CPD).

She said the recovery is welcome, but warned against overstating it, pointing out that last year’s revenue collection had been depressed for a prolonged period due to political unrest and broader instability.

Khatun added that the growth rate is not particularly high when compared with earlier periods of sustained positive expansion. “It shows that collections can improve with effort, but it is not something to celebrate excessively.”

Going against the usual practice and history, the interim government raised the revenue collection target for the fiscal year by 5 percent, taking the goal to Tk 588,000 crore from the original Tk 564,000 crore.

The upward adjustment followed stronger-than-expected performance in the July-September period, when revenue rose by 17.6 percent, far higher than the 4.94 percent recorded in the same period a year ago.

On the higher target, Khatun said setting ambitious goals without matching capacity has become a recurring pattern.

“This has turned into a tradition – setting ambitious targets and then failing to meet them. Repeating this only exposes institutional weaknesses,” she said.

“If the capacity to collect does not align with the target, it points to gaps in manpower, institutional strength and systems,” she added.

While revenue mobilisation must increase and the tax-to-GDP ratio improve, Khatun said achieving that would require deeper reforms, including stronger institutions, improved human resources and technological upgrades. “Without these reforms, revenue shortfalls will persist.”

A recent study by the Office of the United Nations High Commissioner for Human Rights said Bangladesh could collect taxes equal to 14 percent of its GDP, almost double the present rate of 6.6 percent.

Instead, the tax-to-GDP ratio has fallen, reflecting the country’s heavy dependence on indirect taxes and limiting funds for essential services such as education and healthcare.

Dhaka stocks extended their gains for a third consecutive session yesterday (20 January), as cautious investors remained active on both the buying and selling sides amid political uncertainty.

The benchmark DSEX index of the Dhaka Stock Exchange (DSE) gained 17 points to close at 5,109. The blue-chip DS30 index rose by 6 points to 1,970, while the Shariah-based DSES index added 7 points to finish at 1,031.

Turnover increased by 12.98% to Tk670 crore, up from Tk593 crore in the previous session. Of the 388 issues traded, 210 advanced, 109 declined and 69 remained unchanged.

According to market insiders, the stock market had become oversold after several months of decline, largely driven by political uncertainty. However, as the election draws closer, some of that uncertainty has begun to ease, encouraging a return of fresh investment.

They also noted that the market often shows a positive trend around mid-January, which has further supported investor activity. As a result, trading has picked up on both sides of the market.

Over the past year, political uncertainty and several decisions taken by the market regulator were not positively received by investors. Many investors left the market, while a large number of institutional and high-net-worth investors became largely inactive.

This prolonged weakness pushed down the prices of even fundamentally strong stocks.

Analysts said political uncertainty remains the most important factor shaping investor sentiment. As this uncertainty gradually eases, they expect the market to move in a more positive direction.

However, they added that since the situation has not fully stabilised, institutional and large investors are still staying on the sidelines, keeping trading volume below its potential level.

They believe that if policy stability is ensured and investor confidence returns, the capital market has strong potential to recover in the coming period.

Large-cap sectors showed mixed performance during the session. The telecommunication sector posted the highest gain, rising by 1.41%, followed by engineering, which advanced 0.87%. The fuel and power sector gained 0.40%, while pharmaceuticals rose by 0.39%.

On the downside, the non-bank financial institutions (NBFI) sector slipped by 0.02%, banking fell by 0.13%, and the food and allied sector recorded the biggest loss among large-cap sectors, declining by 0.45%. Block trades accounted for 4.8% of the day's total turnover.

The Chittagong Stock Exchange also closed higher. The CSCX index rose by 28 points to 8,819, while the CASPI index gained 44 points to close at 14,243, reflecting a positive mood across both major bourses.

Square Pharmaceuticals' Chairman Samuel S Chowdhury has announced that he will buy 20 lakh shares of the company at the prevailing market price, according to a disclosure filed with the Dhaka Stock Exchange (DSE) today (20 January).

Under the plan, the shares, worth Tk43 crore with each costing Tk215.20, will be acquired from both the public market and through block transactions on the DSE within the next 30 working days.

Samuel Chowdhury already holds a significant stake in the company – 8.42 shares until June 2025 – and this latest planned purchase underscores the continued confidence of senior leadership in Square Pharma's long-term prospects.

Earlier this month, in a separate disclosures, Square Pharmaceuticals Managing Director Tapan Chowdhury, and Director Ratna Patra also announced plans to buy a total 30 lakh shares – with Tapan purchasing 20 lakh shares and Ratna 10 lakh – of the company at the market price within the next 30 working days.

Until June 2025, Tapan held 8.55 crore shares and Ratna 7.95 crore shares of Square Pharmaceuticals.

Industry data shows that sponsor-directors of Square Pharmaceuticals have been steadily increasing their holdings, a trend often viewed by market observers as a sign of confidence in the company's future performance.

Square Pharmaceuticals is currently the second-largest listed company on the DSE by market capitalisation, valued at around Tk18,500 crore, which represents roughly 5.6% of the total market capitalisation of the bourse.

According to the company's December shareholding statement, sponsors and directors jointly hold a combined 43.59% of the company's shares, institutional investors own 14.54%, foreign investors 14.52%, and general investors account for the remaining 27.35%.

In the first half of the current 2025-26 fiscal year – from July to December – revenue collection by the National Board of Revenue (NBR) increased by 14% compared with the same period of the previous fiscal year.

However, collection fell Tk68,995 crore short of the target. In the same period last fiscal year, the shortfall stood at Tk57,891 crore. NBR officials and experts attribute the large deficit primarily to the ambitious targets set for the current year. They also cite the lack of the expected momentum in the economy and insufficient enthusiasm among field-level officials to boost revenue by preventing evasion.

According to the latest data released by the NBR, revenue collection in December rose by just over 10% compared with the same month of the previous fiscal year. Growth rates in earlier months had been higher. In December alone, the shortfall against the target amounted to Tk12,536 crore.

Statistics show that against a target of Tk2,31,205 crore for the first six months, actual revenue collection stood at Tk162,210 crore. During this period, collection increased by over 14% compared with the same period last fiscal year.

However, to meet the overall target set for the NBR, revenue collection would need to grow by 53% compared with last year.

Experts say there is no precedent in Bangladesh's history for revenue growth at such a high rate.

Towfiqul Islam Khan, additional research director at the Centre for Policy Dialogue (CPD), told The Business Standard, "At the time of the last budget, we had already said that this target was unattainable. Later, another Tk55,000 crore was added to the target. As a result, the total target has become quite ambitious."

"As a result, there could be a large shortfall at the end of the year," he said.

He added, "There is no explanation as to what basis the government added an additional Tk55,000 crore to the NBR's target. It may have been done to align with IMF targets, but this is nothing more than 'eye-wash'."

Md Farid Uddin, a former member of the NBR, said, "There is no likelihood of such momentum in the economy over the next six months that would make it possible to achieve such a large target. This means the institution is heading towards a massive shortfall compared with the target."

He said that since the 2016–17 fiscal year, the government has been presenting large expenditure budgets, which led to correspondingly high revenue targets, resulting in deficits every year.

However, he noted that given the size of Bangladesh's economy, achieving this level of revenue collection is not impossible. But the necessary reforms have not been undertaken. As a result, it will not be possible to formalise the largely informal economy – accounting for more than half of economic activity – and revenue will not be collected in line with the targets.

A tax zone commissioner at the NBR, speaking on condition of anonymity, said that even the target set at the beginning of the year would have been difficult to achieve under the current circumstances. With the target later increased further, achieving it has become practically impossible.

At the start of the fiscal year, the NBR's revenue target was set at Tk4,99,000 crore. Last month, it was raised to Tk5,54,000 crore.

The official added that with an election scheduled for February, there are no signs of a sudden acceleration in the economy thereafter. Even if momentum does pick up, revenue collection will not increase at such a high rate in practical terms.

According to NBR data, in the first half of the fiscal year, income tax collection increased by 14.67%, VAT by nearly 20%, and import tax growth remained below 7%.

President Donald Trump's return to office has triggered an escalating transatlantic trade dispute, centred on new US tariffs linked to Greenland and Washington's proposal to take control of the territory, according to the sources.

After resuming the presidency, Trump imposed a 10% "Greenland tariff" on imports from several European countries, including the Nordic states, Germany, France, the Netherlands and Britain. The move was framed as retaliation for the deployment of small numbers of European troops to Greenland, says the Economist.

The new levy comes on top of existing US tariffs of 15% on European Union goods and 10% on British products. Trump has also threatened to raise the Greenland-related tariffs to 25% by the summer of 2026 if European governments do not agree to a US takeover of Greenland, the sources said.

Economists estimate that the immediate macroeconomic impact of the 10% tariffs would be limited, reducing EU output by around 0.04% and US output by about 0.02%. Research cited by the sources indicates that American importers and consumers have borne roughly 96% of the cost of existing tariffs, with prices charged by European firms largely unchanged.

The effects have been uneven across sectors. Imports of industrial equipment from Europe fell by 4% in late 2025, while imports of vehicles, including cars, boats and aircraft, dropped by 32%. Luxury carmakers have been among the hardest hit, with Porsche's operating profits falling by 90% in 2025. Pharmaceutical and healthcare groups such as GSK and Novo Nordisk are also considered highly exposed, as they generate about half of their revenues in the US while maintaining a relatively smaller cost base there.

In response, the EU has prepared a range of potential countermeasures. These include more than €90 billion in retaliatory tariffs on US goods, targeting products made in Republican-leaning districts or items with readily available European substitutes.

European officials have also discussed the use of strategic export controls, such as restricting scrap metal sales to US smelters or limiting exports of products where Europe holds a near-monopoly. These include advanced lithography machines used in chipmaking, produced by ASML, as well as Airbus aircraft and certain military helicopters.

Additional options under consideration include tighter regulation of US technology companies operating in Europe, potentially excluding them from government procurement, and measures that could limit access for American financial firms to European markets.

Despite these tools, the sources suggest the United States would retain greater leverage in a prolonged economic confrontation. Washington could restrict European access to US-based cloud services, use the dominance of the dollar and the US financial system as pressure points, or impose export controls on military equipment and intelligence sharing, including support related to Ukraine.

The sources also point to a potential soft-power dimension. The United States is set to co-host the 2026 FIFA World Cup, where European and South American teams are expected to be among the tournament's main attractions. A European boycott, while unlikely, would carry limited economic cost for Europe but could deal a symbolic blow to the US administration, the sources said.

Gold climbed to a fresh record high today (20 January), scaling the unprecedented $4,700 ‌an ounce milestone as escalating geopolitical tensions boosted safe-haven demand, while silver also broke above $95 for the first time.

Spot gold gained 1.5% to $4,737.18 per ounce by 09:49am ET (14:49 GMT), after reaching a record high of $4,750.49 earlier in the day. US gold futures for February delivery climbed ‌3.2% to $4,742.70/oz. "Gold has surged deeper into uncharted territory as investors hedge ​against rising political risk," said Fawad Razaqzada, market analyst at City Index and FOREX.com.

"A softer dollar is providing an additional tailwind for precious metals, reinforcing gold's rally at a ‍time when confidence in US assets appears to be wobbling."

Wall Street's main indexes opened sharply lower today (20 January), as investors were spooked by renewed tariff threats from President Donald Trump against Europe over control of ⁠Greenland.

The remarks have heightened tensions ahead of Trump's expected meeting with global business leaders ‍in Davos, Switzerland, on Wednesday.

The US dollar was set for its largest daily fall in over a month, ‌making ‌greenback-priced gold more affordable for overseas buyers.

Gold, seen as a safe store of value during economic and political instability, soared 64% in 2025 and has added another 9.5% since the start of the year. The metal's rally has also been supported by expectations of ⁠US interest rate cuts, ⁠which reduce the opportunity ​cost of holding non-yielding bullion.

Markets are pricing in two rate cuts of 25-basis-points from mid-2026, while focus intensified after US Treasury Secretary Scott Bessent said Trump could name a new Federal Reserve chair as ‍early as next week.

"$4,800 and $4,900 are the next obvious reference points (for gold), with the key $5,000 handle standing out as the longer-term psychological target," Razaqzada added.

Spot silver slipped 0.3% to $94.37/oz, after hitting a record $95.87 earlier. ​The white metal added about 147% in 2025 ‍and has gained more than 34% since the start of 2026. Elsewhere, spot platinum added 2.8% to $2,440.94/oz, while palladium was ​down 0.7% at $1,828.39.

Bangladesh Bank (BB) has allowed a special loan rescheduling and restructuring facility for distressed export-oriented and domestic shipbuilding companies in a bid to keep the sector operational and improve loan recovery by banks.

As per a BB circular issued yesterday, borrowers will have to make a 3 percent down payment on their outstanding loan balance to qualify for the facility. They must pay 1.5 percent at the time of application and the rest within the next six months.

Defaulters will be able to reschedule or restructure their loans for up to 10 years, including a maximum two-year grace period, depending on the borrower’s repayment capacity and business prospects.

During the grace period, interest must be paid on a monthly or quarterly basis. Blocked interest will have to be repaid in instalments after the grace period ends without additional interest.

Borrowers must submit applications to their banks by June 30, 2026, along with the required down payment. On the other hand, banks have been instructed to decide on applications within 60 days of receipt.

BB has also instructed all scheduled banks to consider case-by-case applications from genuinely affected shipbuilders for special rescheduling of their classified loans as of December 31, 2025.

For loans which were rescheduled under an earlier 2023 circular, banks may grant an additional two-year extension, subject to a further 2 percent down payment.

The central bank said the move became necessary due to disruptions in global supply chains, geopolitical instability in Europe, and a global economic slowdown that hurt the cash flows of shipbuilders beyond their control.

Firms found guilty of fraud, willful default, or loan manipulation will not be eligible for the facility, BB clarified. Before approving any rescheduling, banks must conduct a special inspection to verify whether the borrower was genuinely affected by circumstances beyond their control. Islamic banks have been asked to apply the same policy in line with Shariah principles.

The circular takes immediate effect under Section 45 of the Bank Company Act, 1991.

Bankers say the move could provide breathing space to the struggling shipbuilding sector, which has significant export potential but has faced financial stress in recent years due to global market volatility.

At the end of 2024, total outstanding loans in the shipbuilding and ship-breaking industry stood at Tk 20,506 crore, of which Tk 8,031 crore had become defaulted, according to BB data.

The Bangladesh Bank (BB) is going to unveil its monetary policy statement for January to June of the current fiscal year on January 29, at a time when inflation remains elevated despite a high policy rate.

The central bank monetary policy committee is scheduled to meet this week to finalise the policy stance for the six-month period. The proposal will then be placed before the board of directors of the banking regulator for approval on January 25.

BB Governor Ahsan H Mansur will announce the policy at a press conference at the central bank headquarters.

The monetary authority, tasked with managing currency, money supply, and interest rates to maintain price stability, will unveil the policy amid renewed price pressures.

In December, Inflation rose to 8.49 percent from 8.29 percent a month earlier, according to the Bangladesh Bureau of Statistics (BBS).

Industry insiders said inflation is showing signs of heating up again despite the central bank’s tight monetary stance, pointing to supply-side constraints rather than excess demand as the primary driver of rising prices.

The central bank has kept the policy rate unchanged at 10 percent since October 2024, resisting calls from business groups for a rate cut.

Zahid Hussain, a former lead economist at the World Bank’s Dhaka office, said the central bank has little room to ease policy while inflation is high.

Cutting the policy rate at this stage could add to inflationary pressures rather than stabilise prices, he said, adding that the central bank is likely to keep the rate at 10 percent in the near term.

“Inflation is not being driven only by excess demand; supply-side bottlenecks and global supply chain disruptions are also playing a major role in keeping prices elevated,” said the economist.

On exchange rate management, Hussain said Bangladesh Bank is prioritising stability rather than allowing the taka to strengthen against the US dollar.

“Despite steady remittance inflows and improved dollar availability, the central bank is avoiding taka appreciation. While a stronger taka could have reduced import costs, it could also hurt exporters’ earnings and discourage remittance inflows, prompting the central bank to keep the exchange rate stable,” he added.

Private sector credit growth remains subdued, while short-term foreign borrowing has declined, he said. Although lower interest rates could support investment, persistently high inflation limits the scope for such moves.

“Meanwhile, Bangladesh Bank’s dollar purchases have injected liquidity into the banking system, but sluggish credit demand has contained inflationary risks for now,” he noted.

Md Ezazul Islam, director general of the Bangladesh Institute of Bank Management (BIBM), said the central bank should maintain its tight monetary stance for at least the next six months, or at least three months, to rein in inflation.

With an election schedule approaching, demand for credit is likely to rise, he said, commenting that any rate cut at this stage could add to inflationary pressure.