After months of stability, Bangladesh’s currency has started to lose value against the US dollar as Bangladesh Bank stopped intervening in the market due to the possible impact of the US-Israel war against Iran.

Yesterday, the greenback was traded at a maximum of Tk 122.55 each, up from Tk 122.37 on the previous day.

The weighted average interbank exchange rate stood at Tk 122.49 per US dollar, up from Tk 122.43 a day earlier, according to the latest data from Bangladesh Bank.

The interbank exchange rate was Tk 122.36 last Thursday and Tk 122.33 on Wednesday, the data showed.

Central bank data shows that the weighted average interbank exchange rate against the greenback has continued to weaken since March 2 this year.

Officials of the central bank said the regulator has now stopped intervening in the market due to the possible impact, which is why the value of the taka has started to weaken against the US dollar.

They also noted that fuel prices in the international market have increased sharply, which is likely to raise import costs and lead to volatility in the forex market in the coming days.

Considering that potential impact, Bangladesh Bank halted purchasing US dollars from the market, they added.

Bangladesh Bank purchased more than $5 billion from the foreign exchange market since the beginning of this fiscal year until March 2.

However, between FY21 and FY25, Bangladesh Bank sold more than $25 billion from its foreign exchange reserves to meet import payments for fuel, fertiliser and food.

The new governor of Bangladesh Bank recently hinted that the regulator will provide US dollar support from forex reserves to import fuel if needed, officials said.

Due to Bangladesh Bank’s dollar purchase spree, the country’s foreign exchange reserves have continued to rise.

Forex reserves stood at $34 billion as of March 8 this year, according to Bangladesh Bank data. However, the reserves stood at $29.38 billion as per the IMF calculation.

On Saturday, eight leading economists of the country met the new governor of the central bank to discuss ways to address the possible impact of the Middle East crisis on the economy.

The economists suggested that Bangladesh Bank remain cautious about spending from the country’s foreign exchange reserves as tensions in the Middle East threaten to create fresh economic shocks.

They also warned that rising global fuel prices due to the Middle East crisis could increase the country’s import bills and eventually put pressure on the foreign exchange reserves.

The economists advised the central bank to explore alternative funding sources to settle fuel import payments instead of using the reserves.

For four years, Bangladesh has struggled to escape the inflation spiral unleashed by the Russian invasion of Ukraine in February 2022, a crisis that turned it into South Asia's highest-inflation economy.

Now another geopolitical shock is gathering force. On the tenth day of the US-Israel war on Iran, global oil prices have surged past $100 a barrel for the first time since that invasion, threatening to unleash yet another inflation storm on an already strained economy.

The uncomfortable irony is that the escalating war in the Middle East arrives just as a freshly elected government takes office and just as inflation had finally begun to slow.

Following a tightening monetary stance by the Bangladesh Bank, inflation had slipped below 9% – still high, but hinting that the long price surge might finally be losing momentum.

Oil soars 25%, gold drops as Iran war jolts global commodity markets

The latest data from the Bangladesh Bureau of Statistics reveal just how uneasy the inflation landscape still is. Overall inflation climbed to 9.13% in February 2026, a ten-month high. Even more worrying, food inflation – the measure that defines everyday living costs – jumped to 9.30%, the highest in 13 months.

For ordinary households, the pain is becoming structural. Wage growth stood at 8.06%, marking the 48th consecutive month in which income growth has lagged behind inflation.

US crude oil, the front-month West Texas Intermediate futures soared 30% to hit $118.28 a barrel in Monday (9 March) trading hours, while Brent, the international benchmark, jumped more than 25% to $116.67 per barrel.

The surge comes as the escalating US-Israel war on Iran has fuelled fears of prolonged disruption to shipments through the Strait of Hormuz, which carries one-fifth of the world's daily oil supply, while the UAE and Kuwait have begun cutting oil production after the Strait blockage.

Inflation shoots up to 9.13% in February, highest in 10 months

For Bangladesh, such shocks rarely remain distant geopolitical headlines. Even before oil crossed $100 per barrel, panic buying gripped petrol pumps, showing that government assurances and rationing did little to calm fears.

The country imports most of its fuel and fertiliser, so global oil spikes ripple through the economy: transport costs rise, electricity becomes more expensive, fertiliser and irrigation costs climb, shipping costs increase, and eventually the pressure spreads to food markets and consumer goods. In short, global oil shocks quietly reach domestic kitchens.

Bangladesh has faced this before. The Russian invasion of Ukraine sent fuel, fertiliser, and food prices sharply higher, pushing inflation above 9% and keeping it stubbornly elevated for years. Today, the macroeconomic environment is even more fragile.

Merchandise exports fell for the seventh consecutive month in February 2026, while private credit growth dipped to a record low of 6% in January. Even the General Economics Division (GED) of the Planning Commission could not look away – its February 2026 Monthly Economic Update & Outlook report highlighted that a revenue shortfall, combined with weak mid-year Annual Development Programme (ADP) utilisation, is creating mounting fiscal challenges.

Governments scramble to limit fallout of Iran war as oil prices surge

The pressure on the taka is a particular concern. From Tk86 in February 2022 to crossing Tk100 in September 2022, it has now stood at Tk122.5 against the US dollar. With the US-Israel war on Iran driving energy costs ever higher, a further weakening of the taka could sharply push up import bills, electricity and fuel costs, and production expenses, sending the economic burden soaring across Bangladesh.

This also creates a difficult dilemma for monetary policy. With inflation already high, there is little room to loosen policy to stimulate growth. Yet tighter financial conditions risk slowing investment and employment.

Whether this becomes another full-scale inflation storm will depend largely on how long the war persists and whether global energy supply and routes stabilise. But the early signals from markets are unsettling.

Bangladesh is bracing for a storm it cannot fully control, and the coming months will test both policy resilience and the patience of ordinary citizens.

The share price of British American Tobacco Bangladesh Company (BATBC) came under significant pressure after it reported a major loss and sharply reduced its dividend, triggering a negative investor reaction and a notable fall in the stock.

Around the annual disclosure on 2 March, the company's share price dropped by nearly 21% in four consecutive trading sessions.

The sharp fall came as the company, which has long been known for paying high dividends, significantly reduced its dividend payout this year, prompting many investors to sell their holdings.

Even before declaring the dividend, its share price had fallen 7% and after the news was widely reported, selling pressure intensified further. In the trading sessions following the publication of the news, the share price declined by around 21%, reflecting investors' concerns over the company's weak earnings performance and lower dividend declaration.

The company's share price today regained 2.41% to Tk216.80 on the Dhaka stock exchange, while the premier index DSEX rose 132 points in a positive sentiment.

BATBC recommended a 30% cash dividend for 2025, sharply lower than the 300% cash dividend it distributed in 2024, reflecting a significant decline in its financial performance.

The multinational tobacco company reported a loss of Tk136 crore in the October-December quarter of 2025, indicating a sharp deterioration in earnings due to declining cigarette sales and higher operating costs.

According to the company, earnings per share (EPS) fell by 67% for the year ended 31 December 2025, mainly due to lower turnover and increased operating expenses. Costs rose amid inflationary pressure and higher levels of operational activity in certain segments of the business.

In July 2025, the company shut down its Dhaka factory and transferred plant, machinery, and cigarette manufacturing equipment to its Savar factory. The forced closure, along with relocation and restructuring costs, created a one-off negative impact of Tk715 crore on operating profit compared to the previous year.

For the full year ended December 2025, the company's EPS stood at Tk10.81, while it posted a loss per share of Tk2.53 in the fourth quarter.

The company will hold its annual general meeting on 30 April, with the record date set for 1 April to approve the financial statements and proposed dividend.

The government is managing the country's overall economic activities with a careful eye on the global economic situation and various crises, Finance Minister Amir Khasru Mahmud Chowdhury said today (9 March).

"The economic challenges arising from wars and other global factors cannot be avoided. Our current activities and future economic projections are determined with these realities in mind," he said at a press conference held at the ministry's conference room to inaugurate the "Family Card" programme which launches tomorrow.

Responding to a question on whether the government would continue austerity measures in spending, he said all ministries have been instructed to plan programmes according to the prevailing situation.

"The upcoming budget will also be prepared considering these circumstances," he added.

Asked about securing oil supply from China, Khasru said, "For energy security, we are seeking cooperation from various countries. Energy security is extremely important for the country, so the government is in discussions with all countries that can supply energy and seeking their support."

He also highlighted the "Family Card" initiative as a landmark poverty reduction effort.

"To my knowledge, such a large-scale poverty alleviation programme has not been undertaken in Bangladesh before. Through this, we aim to deliver economic benefits directly to people at their doorstep," he said.

The minister emphasised that the initiative reflects a gradual shift toward a welfare state in Bangladesh.

"In the past, economic benefits were distributed through patronage systems. Now, the government is directly reaching the common people," he noted.

Prime Minister Tarique Rahman will inaugurate the Family Card programme today (10 March) at the T&T playground in Banani, adjacent to the Korail slum, aiming to deliver economic benefits directly to citizens' doorsteps.

At a press conference on the launching programme at the Secretariat yesterday (9 March), Finance Minister Amir Khosru Mahmud Chowdhury described the initiative as non-political, non-partisan, and fully transparent, noting that it is designed to ensure the benefits of the nation's economy reach every citizen.

Social Welfare Minister Abu Zafar Md Zahid Hossain detailed the programme, explaining that under the pilot phase, 37,567 female-headed households have been selected to receive allowances ahead of Eid in March.

Each eligible family will receive one Family Card covering up to five members, with additional cards issued proportionally for larger households, he added. "If a woman head of household already receives other government allowances, those will be cancelled, while benefits to other family members will continue," the minister explained.

Under the pilot, each household will receive a monthly allowance of Tk2,500, with plans to expand to include food assistance in the future.

A total of Tk38.07 crore has been allocated for the pilot, with Tk25.15 crore (66%) earmarked for direct cash transfers and Tk12.92 crore (34%) for data collection, system development, card preparation, and programme management.

The pilot covers 13 city corporations and 15 wards across 13 districts, supported by committees at ward, union, upazila, and district levels.

Ward committees collected detailed household information—including socio-economic status, family size, education, housing, assets (TV, fridge, computer, mobile), and remittance flows—which was then verified at union and upazila levels.

During the pilot, data from 67,854 female-headed households were analysed using a Proxy Means Test (PMT) or poverty index, classifying families into five categories: ultra-poor, poor, lower-middle-class, middle-class, and upper-class.

After verification, 47,777 households in the ultra-poor, poor, and lower-middle-class categories were confirmed, and the final 37,567 households were selected based on factors such as existing government allowances, employment, or pension status.

"The entire selection process is software-driven through the PMT, leaving no room for corruption, favouritism, or manual interference," the Social Welfare Minister stressed.

Each selected household will receive a modern smart Family Card equipped with a chip, QR code, and Near-field communication (NFC) technology to ensure safety and durability.

Minister Zahid Hossain said that households were deemed ineligible if any member received a salary, allowance, grant, or pension from government, autonomous, or state-owned institutions, if the female head worked as a teacher or staff member in an MPO-listed institution, or if the household owned commercial licenses, large businesses, luxury assets (cars, air conditioners), or savings certificates worth Tk500,000 or more.

The Family Card allowance will be disbursed directly from the Social Welfare Ministry's social security budget to beneficiaries' mobile wallets or bank accounts via the G2P (Government-to-Person) system, he added.

During data collection, beneficiaries' account information was gathered to ensure timely, accurate, and interference-free delivery of funds directly to recipients

The Group of Seven (G7) finance ministers will ‌discuss on Monday a joint release of oil from emergency reserves coordinated by the International Energy Agency, the Financial Times reported.

Three G7 countries, including ⁠the US, have so far expressed support for the idea, the FT said citing sources, and added that the ministers and the IEA Executive Director Fatih Birol will hold a call to discuss the impact of the Iran ‌war.

The ⁠report comes as oil prices surged more than 25% on Monday to their highest levels since mid-2022 as some major producers cut ⁠supplies and fears of prolonged shipping disruptions gripped the market due to the expanding US-Israeli ⁠war with Iran.

The IEA and the G7 presidency did not respond to ⁠requests for comment outside regular business hours.

Bangladesh Bank (BB) has appointed observers at National Bank, Al-Arafah Islami Bank, Premier Bank, and IFIC Bank to closely monitor their activities.

The central bank made the decision this week.

“The decision to appoint observers at these banks is part of a continuous process,” said Arief Hossain Khan, executive director and spokesperson of Bangladesh Bank.

Munir Ahmed Chowdhury, director of the Bank Supervision Department-12 of BB, has been appointed as an observer to the National Bank.

Mohammad Anisur Rahman, director of the Islamic Banking Regulations and Policy Department, has been assigned to observe Al-Arafah Islami Bank.

ANM Moinul Kabir, director of the Payment Systems Department-1, has been appointed to Premier Bank.

AKM Kamruzzaman, director of the Forex Reserve and Treasury Management Department-1, has been appointed to IFIC Bank.

The central bank usually appoints observers to banks whose financial health is deteriorating.

Observers take part in board meetings and monitor the banks’ operations. They are withdrawn once the financial health of the bank improves.

After the fall of the Awami League-led government on August 5, 2024, the central bank restructured the boards of 14 banks, including these four lenders.

Mobile telecom operators have urged the regulator to ensure priority allocation of fuel and electricity for network operations, warning that disruptions in supply could affect nationwide connectivity.

Limited availability of fuel at filling stations is creating risks for maintaining uninterrupted telecom services across the country, Association of Mobile Telecom Operators of Bangladesh (AMTOB) said in a letter to the chairman of the Bangladesh Telecommunication Regulatory Commission (BTRC) yesterday (9 March).

Companies have also expressed concern about sustaining operations during the upcoming Eid holidays amid government indications of possible load shedding.

AMTOB Secretary General Mohammad Zulfikar said mobile operators rely heavily on diesel- and petrol-powered generators to keep networks running, particularly during power outages.

"If fuel supply becomes uncertain, it could hamper maintenance activities, generator operations and emergency responses required to keep the telecom network functioning," he said.

The association noted that telecommunications have been declared an essential service by the government and currently support more than 185 million mobile subscribers across the country.

Telecom infrastructure also plays a vital role in enabling emergency communication, public safety services, digital financial transactions, business operations and government services.

According to the letter, reduced fuel availability at some filling stations has already created operational challenges for operators.

AMTOB warned that insufficient fuel supply could lead to network outages across large geographical areas, instability in data centres, equipment damage and longer service restoration times.

To prevent such disruptions, the association requested the regulator to coordinate with relevant authorities to ensure priority fuel allocation for mobile network operators and tower companies.

It also called for uninterrupted fuel supply for core network facilities and data centres, assured fuel availability for base transceiver stations (BTS) and maintenance vehicles, and reduced load shedding at critical telecom infrastructure sites.

Bangladesh has been facing persistent energy challenges in recent times as the country remains heavily dependent on imported fuels, including liquefied natural gas, petroleum products and coal.

The war in the Middle East has raised concern of fuel supply, triggering the government to adopt rationing measures. Conflict has also sparked panic buying, creating shortages at fuel pumps.

A tanker carrying more than 27,000 tonnes of diesel reached the waters of Chattogram Port today (9 March), amid a nationwide fear of supply shortage ten days after the conflict in the Middle East broke out.

Shipping agents said four more diesel tankers are scheduled to arrive at the port within a week.

Together, the five tankers will bring about 147,205 tonnes of refined diesel imported from Asian countries, according to port and shipping sources.

The arrival comes at a time when diesel demand has increased due to panic buying following the war in the Middle East. To manage stock levels, the government has recently reduced the daily fuel supply.

Port sources said the tanker Xiu Chi, carrying 27,204 tonnes of diesel from Singapore, entered the port's maritime area earlier in the day. According to vessel tracking data from MarineTraffic, the tanker is currently anchored near Kutubdia.

Another tanker, Lian Huan Hu, is expected to reach the port tonight from Singapore with nearly 30,000 tonnes of diesel. The tanker SPT Themis is scheduled to arrive on Thursday carrying 30,484 tonnes.

Two additional vessels — Raffles Samurai and Chang Hang Hong Tu — are expected to reach the port next Saturday, each carrying around 30,000 tonnes of diesel.

Nazrul Islam, managing director of Pride Shipping Lines, the local agent for the four tankers, told The Business Standard that the vessels are expected to arrive within a week according to schedule.

"Once they reach the port waters, the unloading will begin sequentially," he said.

According to the Bangladesh Petroleum Corporation (BPC), the country's normal daily demand for diesel is around 12,000 tonnes. The five tankers together could meet roughly 12 days of demand.

However, since Sunday, the government has reduced daily diesel supply to about 9,000 tonnes to maintain adequate reserves. At that rate, the incoming shipments could cover around 16 days of demand.

Existing stockpiles are expected to last another 16 to 17 days, meaning the combined supply would be sufficient to meet nearly a month of the country's diesel demand.

BPC data shows that diesel accounts for about 70% of Bangladesh's total fuel consumption, with most of it imported directly.

According to the National Board of Revenue, Bangladesh imported 2.328 million tonnes of diesel from nine countries between July and February of the current fiscal year.

Of that total, 78% came from Singapore, Malaysia, and India, while no diesel was imported from Middle Eastern countries during the period.

Fuel reserves in Bangladesh have increased with the arrival of two fuel-laden ships, but the government will continue rationing supplies due to uncertainty surrounding the ongoing war, Power, Energy and Mineral Resources Minister Iqbal Hassan Mahmood Tuku said today (8 March).

"Once these two ships deliver fuel, our reserves will increase further," he said while speaking at a discussion programme at the Jatiya Press Club.

The minister said rising reserves do not mean fuel can be used in an uncontrolled manner. "We will continue rationing for as long as the war continues."

Explaining the need for rationing, Tuku said the duration of the war remains uncertain and the government wants to use the existing reserves carefully.

"We do not know when the war will end. That is why we have asked people to use fuel sparingly and introduced rationing so that the reserves last longer. If we consume everything at once, the reserves will quickly run out. But if we manage consumption properly, we will be able to continue for a longer time," he added.

Tuku also said rumours are being spread that the government may increase electricity and fuel prices due to the war.

"I want to assure people that we are not increasing power prices for now," he said.

The minister urged people not to panic or stockpile fuel out of fear of a price hike.

"There is no shortage of fuel, but rationing must continue. We do not know when the war will end, and people should understand that," he added.

The minister also urged BNP leaders and activists, as well as the public, to remain vigilant so that fuel is not smuggled or sold on the black market.

Referring to the condition of the power sector under the previous government, Tuku said the current administration inherited a fragile and debt-ridden system with outstanding dues of around Tk76,000 crore.

"Despite the challenges, we have managed to keep the system stable so far, and we hope it will remain stable in the future," he said.

Oil prices surged about 20% on Monday (9 March), hitting their highest since July 2022, as the expanding US-Israeli war with Iran ‌led some major Middle Eastern oil producers to cut supplies and on fears of prolonged disruption to shipping through the Strait of Hormuz chokepoint.

Iraq and Kuwait have begun cutting oil output, adding to earlier liquefied natural gas reductions from Qatar, as the war blocked shipments from the Middle East.

Analysts predict the United Arab Emirates and Saudi Arabia will have to also cut output ​soon as they run out of oil storage.

The war could leave consumers and businesses worldwide facing weeks or months of higher fuel prices even ​if the week-old conflict ends quickly, as suppliers grapple with damaged facilities, disrupted logistics and elevated risks to shipping.

Brent crude futures ⁠rose as much as $18.35, or 19.8%, to $111.04 a barrel and were up $15.24, or 16.4%, at $107.93 as of 0014 GMT on Monday.

US West Texas Intermediate (WTI) crude futures were ​up $16.50, or 18.2%, at $107.40 a barrel, after rising as much as $20.34, or 22.4%, to $111.24 earlier in the session.

Brent climbed 27% and WTI rose 35.6% last week, before ​the latest jumps.

"I think prices have rallied this morning on the reports that Middle East producers are now reducing output due to storage facilities filling up fast," said Daniel Hynes, senior commodity strategist at ANZ.

"The next flag will be whether it eventually gets to a point where they have to start shutting in oil wells, which not only impacts output even further, it ​delays a response once the conflict eases as well. That would potentially sustain those prices for much longer," Hynes added.

Iraqi oil production from its main southern oilfields ​has fallen by 70% to just 1.3 million barrels per day as the country is unable to export oil via the Strait of Hormuz due to the Iran war, three industry ‌sources said ⁠on Sunday. Crude storage has reached maximum capacity, said an official with the state-run Basra Oil Company.

Kuwait Petroleum Corporation began cutting oil output on Saturday and declared force majeure on shipments, though it did not say how much production it would shut.

Iran's attacks on oil infrastructure across the region have continued. Fujairah Media Office said fire broke out in the UAE's Fujairah oil industry zone resulting from debris falling, with no injuries reported. Saudi Arabia's Defence Ministry said on X it intercepted a drone heading to ​the Shaybah oilfield.

New leader

Iran on Monday named Mojtaba ​Khamenei to succeed his father Ali ⁠Khamenei as Supreme Leader, signalling that hardliners remain firmly in charge in Tehran a week into its conflict with the United States and Israel.

"With the appointment of the late leader's son as Iran's new leader, US President Donald Trump's goal of ​regime change in Iran has become more difficult," said Satoru Yoshida, a commodity analyst with Rakuten Securities.

"That view accelerated buying, ​as Iran is expected ⁠to continue its closure of the Strait of Hormuz and attacks on other oil-producing nations' facilities, as seen last week," he said, predicting WTI could rise to $120 and then $130 a barrel in a relatively short period.

Israel's military has threatened to kill any replacement for Khamenei, while Trump said the war might only end once Iran's military and rulers had ⁠been wiped ​out.

Meanwhile, as oil prices surged, US Senate Democratic Leader Chuck Schumer called on Trump to release ​oil from the Strategic Petroleum Reserve.

"President Trump should release oil from the SPR now to stabilise markets, bring prices down, and stop the price shock that American families are already feeling thanks to his ​reckless war," Schumer said in a statement.

The government has issued a fresh circular to appoint a managing director (MD) for state-owned Sammilito Islami Bank after the previously selected candidate declined to take the position.

The Financial Institutions Division of the Ministry of Finance published the new recruitment notice today (8 March), inviting applications from qualified and experienced candidates.

In February, Nabil Mustafizur Rahman, additional managing director of United Commercial Bank (UCB) PLC, was appointed as the MD of Sammilito Islami Bank.

However, he later expressed his inability to assume the role citing "physical illness," a reliable Bangladesh Bank source confirmed the matter to The Business Standard.

As he did not join the post, the authorities have issued a fresh recruitment notice for the position.

According to the circular, the selected candidate will initially be appointed on a three-year contractual basis, with the possibility of renewal based on satisfactory performance.

Applicants must have at least 20 years of experience in the banking sector. They must also have served either as the chief executive officer of a bank or held a position directly below the CEO for at least two years.

Candidates are required to have expertise in Islamic banking operations, Shariah governance, Islamic accounting systems, profit distribution mechanisms, and Islamic risk management. Experience in digital banking, organisational transformation, or bank mergers will be considered an added qualification.
Nabil Mustafizur Rahman appointed first MD of Sammilito Islami Bank

Applicants must be between 45 and 60 years of age at the time of the circular's publication and must not be loan defaulters.

The appointed MD will oversee all operations of the bank, including corporate, SME, retail, treasury, agriculture, international trade, and digital banking. The role will also involve developing Shariah-based banking products, strengthening risk management, and coordinating organisational integration following the bank merger.

Applications will initially be screened based on qualifications, after which shortlisted candidates will be invited for interviews. Final appointment will require background verification and approval under Bangladesh Bank's "fit and proper" criteria.

Interested candidates must submit their CV, cover letter, attested copies of academic and professional certificates, a copy of their national ID card, and a passport-size photograph. Applications must be sent in a sealed envelope addressed to the Secretary of the Financial Institutions Division at the Bangladesh Secretariat in Dhaka, along with a PDF copy sent via email.

The deadline for submitting applications is 25 March by 5pm.

Sammilito Islami Bank PLC was formed as a new state-owned bank through the merger of five weak Islamic banks – EXIM Bank, Social Islami Bank, First Security Islami Bank, Global Islami Bank, and Union Bank.

The bank's paid-up capital has been set at Tk35,000 crore, of which the government will contribute Tk20,000 crore and Tk15,000 crore will come from depositors' shares. Its authorised capital has been fixed at Tk40,000 crore.

Following the payment of $1.37 billion in bills to the Asian Clearing Union (ACU), the country's foreign exchange reserves have once again fallen below $30 billion.

Bangladesh Bank Spokesperson and Executive Director Arief Hossain Khan confirmed the development today (8 March), saying that after the ACU payment for January and February, the reserves now stand at $29.38 billion.

ACU payments are made every two months to settle import transactions among member countries under the regional clearing arrangement.

The ACU was established on 9 December 1974 under the initiative of the United Nations Economic and Social Commission for Asia, with its headquarters in Tehran, Iran.

The organisation facilitates the settlement of trade payments among its nine member countries – Bangladesh, Bhutan, India, Iran, Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka – through a multilateral clearing system involving the central banks of these nations.

Overall inflation rose to its highest level in ten months in February, climbing to 9.13 percent from 8.58 percent in January, according to data released by the Bangladesh Bureau of Statistics yesterday.

Economists say rising food prices ahead of Ramadan and election-related spending added to demand pressures, pushing the Consumer Price Index (CPI), a measure of the prices of a basket of goods and services, above 9 percent for the first time since May last year.

February also marks the fourth consecutive monthly increase since inflation touched a 39-month low of 8.17 percent in October.

Food inflation bore the brunt of the rise, jumping to 9.30 percent in February from 8.29 percent the previous month. Non-food inflation also edged higher, reaching 9.01 percent from 8.81 percent, reflecting continued pressure in housing, transport and healthcare.

Bangladesh has been struggling with persistent inflation for more than three years. The burden falls hardest on the poor and low-income households, who spend a disproportionate share of their earnings on food and have the least capacity to absorb price shocks.

Inflation moderated slightly in recent months, but the 12-month annual average rate remained above 8.5 percent in January even though Bangladesh Bank maintains a hawkish monetary policy stance aimed at curbing demand-driven price increases and stabilising the economy.

As part of its tightening measures, the central bank has kept the policy rate at 10 percent for nearly one and a half years.

In its latest monthly economic updates, the General Economic Division under the Planning Commission said the recent trend indicates continued pressure from food prices within the overall inflation framework.

Sectoral contribution analysis shows that food remains the largest contributor to headline inflation in January.

Food accounted for 43.06 percent of overall inflation in January, up from 40 percent in December. Fish and dry fish remained the highest contributors, although their share decreased from 43.34 percent to 32.27 percent, it said.

ELECTION SPENDING, SUPPLY PRESSURE

Zahid Hussain, former lead economist at the World Bank’s Dhaka office, pointed to a convergence of February-specific factors. “We cannot look at this solely through the lens of monetary policy.”

Noting that urban food inflation rose the most, he explained, “part of this increase seems linked to election-related demand”.

Campaign spending, providing snacks at tea stalls or serving biryani, boosts the food component and contributes to higher prices, he said.

On the supply side, he noted, “A major disruption at the ports in February increased inflation expectations and hoarding tendencies.”

The economist also explained that combined with the lean season for food production -- the peak winter season has ended, but the spring harvest has not yet arrived -- this created a double burden on food prices.”

Hussain went on to point out that non-food inflation also rose, particularly in the miscellaneous category, which went from 21 to 24 percent. Understanding this category is key, as it recorded the highest inflation.

CONTRACTIONARY POLICY ESSENTIAL: ECONOMISTS

Regarding monetary policy, Hussain said, “Without the contractionary stance, the situation would have been even worse. The new governor had discussed reducing the policy rate, but that option has been postponed in light of recent challenges.”

With the Middle East conflict between Iran and US-Israel now threatening fuel and import costs, he warned the outlook was worsening.

“Now, with the war adding further pressure, it’s like rubbing salt on the wound. Inflation, growth, and employment are all under strain, and the situation ahead does not look positive from any perspective,” he said.

Ashikur Rahman, principal economist of the Policy Research Institute, also agrees that the central bank’s monetary policy stance is the right way to handle the situation.

“The twelve-month moving average clearly shows that inflation is on a downward trajectory, indicating that the current contractionary monetary stance is beginning to yield results,” he said.

“Bangladesh’s real policy rate, calculated by subtracting the inflation rate from the policy rate, stands at roughly 1.5 percent, one of the lowest in South Asia,” he added.

He cautioned that any premature easing risked reigniting inflation and undermining macroeconomic stability.

Md Deen Islam, a professor of economics at Dhaka University, echoed a similar tone on keeping monetary policy unchanged.

“The limited impact of higher policy rates largely reflects weak monetary transmission in the banking sector. Lending rates and credit flows often do not adjust fully to policy signals due to structural inefficiencies and high levels of non-performing loans.”

“Much of the recent inflation in Bangladesh has been driven by supply-side factors -- rising food prices, exchange rate depreciation, and higher import costs for fuel and essential commodities -- which monetary policy alone cannot easily control,” he noted.

He emphasised that addressing inflation effectively requires a broader policy mix that combines prudent monetary management with improvements in supply chains, enhanced market competition, exchange rate stability, and fiscal coordination.

Bangladesh and India have agreed to resolve problems surrounding projects financed under India’s line of credit (LoC) assistance, following talks between Indian High Commissioner Pranay Verma and Bangladesh Finance Minister Amir Khosru Mahmud Chowdhury in Dhaka yesterday.

Speaking to reporters after the meeting, Khosru said they also discussed the progress of LoC-supported projects. “Hopefully, the projects will see further progress in the coming days.”

Verma described the meeting as “very positive and productive”, saying discussions focused on strengthening financial sector cooperation, expanding economic relations and other issues of mutual interest between the two countries.

Both countries remain satisfied with the progress of the ongoing projects, he said.

“Some initial challenges have emerged in a few large projects, but efforts are being made to resolve them,” he said.

The talks come against the backdrop of sluggish disbursement under the three LoC agreements signed since 2010.

Of a total commitment spanning 42 projects, only $1.88 billion was disbursed by June 2024 against cumulative LoC deals worth over $7 billion, while Bangladesh repaid $254 million.

The first LoC, worth $862 million for 15 projects, was signed in 2010. The second, worth $2 billion for 12 projects, was signed in March 2016. The third credit deal, amounting to $4.5 billion, was signed for 15 projects in October 2017.

Just 14 of the 42 projects have been completed, at a cost of roughly $410 million, or about 6 percent of the overall commitment under the first two credit lines.

Beyond the LoC, the two sides discussed a broader range of bilateral issues, including trade, customs, financial sector cooperation and digital infrastructure.

Verma said Bangladesh’s priorities in the financial sector were discussed during the meeting, including improving the ease of doing business, tax reforms and expanding the use of technology to ensure broader participation in economic activities.

The Indian envoy said he briefed the finance minister on India’s experience expanding financial inclusion through its digital public infrastructure.

The two sides also discussed development projects being implemented jointly by the two countries.

On trade, the Indian high commissioner said both sides emphasised the need to further strengthen bilateral trade and economic ties.

Discussions also focused on making existing connectivity through sea, land and air routes more efficient to facilitate trade and business activities.

“If various processes can be simplified as part of ease of doing business, cooperation between businesses of the two countries will increase,” Verma said.

He added that this would help boost bilateral trade as well as increase Bangladesh’s exports to the Indian market.

The meeting also discussed ways to integrate the two economies more closely at both bilateral and regional levels, he said.

Verma said constructive discussions would take place in the future regarding the potential use of ports between the two countries.

He added that stronger bilateral relations could be built in the future based on shared development priorities, new ideas, technology and people-centric cooperation.

The taka weakened sharply against the US dollar yesterday (8 March), snapping six months of exchange rate stability as demand for greenbacks rose to meet growing energy import bills amid the Middle East war.

In the inter-bank market, the dollar rose by as high as Tk0.25 in a single day to trade between Tk122.50 and Tk122.55 yesterday, compared with Tk122.30 on the last working day on Thursday, according to banking sources.

The sudden rise in the dollar price has raised concerns about further inflationary pressure. Consumer inflation already climbed over 9% in February, the highest level in the past 10 months.

Although the Bangladesh Bank had verbally instructed banks to keep the remittance exchange rate at a maximum of Tk122.45, most banks did not maintain the limit, according to industry insiders.

Energy crisis averted for now as more oil, gas on the way

Bankers say exchange houses had already raised remittance rates, forcing banks to buy more dollars from the market to meet growing energy import bills for the Bangladesh Petroleum Corporation as global oil prices increased following the outbreak of the war.

In addition, remittance inflows from the Gulf countries have slowed since last week due to the ongoing war, further tightening the dollar supply in the market, several bankers said, wishing not to be named.

The Bangladesh Bank is likely to step in to sell dollars to retain rates if banks come up with demand, said a senior executive of the regulator.

He noted that the central bank has already stopped purchasing dollars from banks as a precautionary measure as the foreign exchange market shows signs of stress.

Despite yesterday's rise in the dollar price, no banks approached the regulator to buy dollars, he added.

During the current 2025-26 fiscal year, the central bank purchased about $5.4 billion from the market to prevent excessive appreciation of the taka amid weak import demand caused by sluggish business activity.

Meanwhile, the Reserve Bank of India has also intervened in the market by selling dollars to stem losses in the Indian rupee, which recorded its steepest decline in more than a month, closing above Rs91.47 per dollar in the first week of March, according to media reports.

Recently, the Bangladesh Bank held discussions with economists to assess the potential impact of the war. Experts advised the central bank to allow some exchange rate adjustment in order to protect foreign exchange reserves.

According to the latest data, the country's foreign exchange reserves stood at $30.76 billion on 5 March, calculated under the methodology of the International Monetary Fund, which is sufficient to cover more than four months of import payments.

The government is planning to upgrade Bangladesh's stock market from its current frontier market status to an emerging market in a bid to strengthen the capital market and restore investor confidence, Prime Minister's Adviser on Finance and Planning Rashed Al Mahmud Titumir has said.

He said the government's immediate priority is to deepen and broaden the capital market while increasing participation from ordinary citizens so that more people can take part in economic activities not only as consumers but also as owners.

Titumir made the remarks at a discussion titled "Challenges and Way Forward for the New Government in the Capital Market," organised by the Capital Market Journalists Forum (CMJF) at Fars Hotel in Dhaka yesterday.

Bangladesh's equity market is currently classified as a frontier market by major global index providers, a category generally used for smaller or less liquid markets that are still developing and have not yet reached the scale and accessibility of emerging markets.

Speaking at the event, Titumir said structural reforms are essential to transform the capital market and achieve the government's long-term goals.

According to him, the market has long suffered from stagnation due to persistent problems such as manipulation, lack of transparency and weaknesses in the regulatory framework.

"If the market itself does not function properly, external oversight alone cannot solve the problem," he said, stressing the need for greater accountability among institutions responsible for maintaining market discipline.

The adviser noted that auditors, asset valuers and credit rating agencies play a critical role in ensuring transparency in the financial system. If these institutions fail to perform their responsibilities properly, investor confidence in the capital market will continue to decline, he added.

Titumir also emphasised the need for a clear financing structure in the economy. Policymakers, he said, must determine which companies should rely on bank loans and which should raise long-term funds from the capital market.

He further suggested that the government could finance large public infrastructure projects through bonds rather than relying solely on budgetary allocations.

Highlighting the need for diversification of financial instruments, the adviser said Bangladesh should gradually move toward a bond-based financing system and develop new products in the capital market.

He also proposed establishing an Islamic stock exchange in the country to attract investors from Indonesia, Malaysia and Gulf countries, alongside creating an investment gateway for non-resident Bangladeshis.

Titumir said an economy driven mainly by consumption or borrowing cannot be sustainable in the long run. "We want to move from a debt-dependent society to an ownership-based society," he said, noting that the capital market could serve as an important platform for economic democratisation.

At the event, Bangladesh Securities and Exchange Commission (BSEC) Chairman Khandoker Rashed Maqsood said the regulator has conducted around 200 investigations and imposed fines amounting to nearly Tk1,500 crore as part of recent reforms in the market.

National Board of Revenue Chairman Abdur Rahman Khan said incentives provided to the capital market in the past did not produce the expected outcomes. He stressed the need to address negative perceptions about the market while ensuring sustainable revenue collection.

Market stakeholders also highlighted structural challenges in the financial system. Md Moniruzzaman, managing director of Prime Bank Securities, said Bangladesh faces three major problems: liquidity shortages in the capital market, pressure on the banking sector and low tax collection.

Dhaka Stock Exchange Chairman Mominul Islam emphasised the need for coordination among ministries to bring more state-owned institutions to the market.

Chittagong Stock Exchange Chairman AKM Habibur Rahman said a strong capital market requires a stable banking system, a stable economy and the rule of law.

Bangladesh Association of Publicly Listed Companies President Riyad Mahmud called for greater digitalisation and said high listing fees are discouraging companies from launching initial public offerings.

Bangladesh Merchant Bankers Association Secretary General Sumit Poddar said no new companies have entered the market in the past two years, stressing the importance of attracting a few high-quality firms during IPO seasons rather than focusing on the number of listings.

Banks will have to keep provisions for potential losses before loans turn bad, from January 2028, according to a directive given by Bangladesh Bank (BB), which aims to enable lenders to detect the risk of credit deterioration in advance and enhance transparency in financial reporting.

To identify potential loan losses, banks will be required to classify loans based on a global standard -- the International Financial Reporting Standard 9 (IFRS 9). It specifies how an entity should classify and measure financial assets, financial liabilities and some contracts to buy or sell non-financial items.

In a circular yesterday, BB introduced guidelines for the loan loss framework based on IFRS 9.

Under the guidelines, banks will be required to apply the IFRS 9-based Expected Credit Loss (ECL) model to funded and non-funded credit facilities from January 1, 2028. The system will later be extended to other financial instruments from January 1, 2029.

Under the new framework, loans will be classified into three stages based on changes in credit risk: performing loans (Stage 1), loans with a significant increase in risk (Stage 2), and credit-impaired loans (Stage 3).

Provisions will be calculated based on either 12-month or lifetime expected credit losses, depending on the stage. A provision against loans is an expense set aside by banks from their earnings to cover anticipated losses from unpaid or defaulted loans.

The new rules will also extend provisioning requirements to off-balance-sheet exposures such as loan commitments, bank guarantees and unused credit lines, enabling banks to assess risks more comprehensively.

Currently, banks follow a rule-based loan classification and provisioning system, which relies on the “incurred-loss” approach -- where provisions are typically made after loans show clear signs of deterioration.

The IFRS 9 framework will shift the system to a forward-looking model, requiring banks to estimate potential credit losses in advance rather than waiting for borrowers to default.

Lenders will also have to account for macroeconomic indicators such as economic growth, inflation and interest rate trends when assessing credit risk.

Banks will need to upgrade their data infrastructure and risk-modelling systems to implement the framework, while the central bank will provide regulatory guidance and supervisory support to ensure a smooth transition, central bank officials said.

Industry insiders said that the successful implementation of IFRS 9 would make the banking sector more resilient and attractive to foreign investors by strengthening international confidence.

Flourish Garments Bangladesh Co Ltd, a China (Hong Kong)-based company, will invest $15.34 million to set up a high-end garment manufacturing factory at the Bepza Economic Zone (Bepza EZ) in Mirsharai, Chattogram.

The factory will annually produce four million pieces of garments, including fleece jackets, soft-shell jackets, down jackets, cotton coats, leather jackets, underwear, T-shirts, polo shirts, shorts and parkas.

The product range will also include long pants, ski suits, ski pants, windproof jackets, fishing suits, hiking suits, yoga suits, running suits, jeans, knitted shorts, faux leather clothing, deer-skin velvet clothing, golf clothing and casual skirts.

The investment will create job opportunities for 1,988 Bangladeshi nationals.

Md Tanvir Hossain, executive director (investment promotion) of the Bangladesh Export Processing Zones Authority (Bepza), and Han Junxiao, managing director of Flourish Garments Bangladesh Co Ltd, signed the agreement at the Bepza Complex in Dhaka yesterday, according to a press release.

Major General Mohammad Moazzem Hossain, executive chairman of Bepza, attended the programme. Speaking at the signing ceremony, Hossain assured the company of Bepza’s full support to ensure smooth and successful business operations in the zone.

He noted that Bepza continues to expand its facilities and develop new zones to accommodate growing investor interest and further strengthen Bangladesh’s export-oriented industrial base.

The Bepza executive chairman also urged the new investor to encourage and attract more high-quality and responsible investors to Bepza zones, contributing to sustainable industrial growth and export diversification in Bangladesh.

Abdullah Al Mamun, member (engineering); ANM Foyzul Haque, member (finance); Samir Biswas, executive director (administration), and ASM Anwar Parvez, executive director (public relations), along with senior officials of Bepza and representatives of the company, were also present.

US retail gasoline and diesel prices are soaring as the U.S.-Israel war with Iran constrains oil and fuel exports, which could be a political test for President Donald Trump's Republican Party ahead ​of midterm elections in November.

Fuel prices jumped more than 10 percent this week as oil rose above $90 a barrel, its highest in years, adding pain at the ‌pump for consumers already strained by inflation. Trump on Thursday shrugged off higher gasoline prices in an interview with Reuters, opens new tab, saying "if they rise, they rise."

The president had vowed to lower energy prices and unleash U.S. oil and gas drilling during his second term, but much of his tenure has been marked by volatility and uncertainty amid shifts in policies like tariffs and geopolitical turmoil. The US is the world's largest oil producer. It is a major exporter ​but also imports millions of barrels a day since it is the world's largest oil consumer.

As of Friday, the national average prices for regular gasoline stood at $3.32 a ​gallon, up 11 percent from a week ago and the highest since September 2024, according to data from the motorists association AAA. Diesel was at $4.33, ⁠up 15 percent from a week ago, surging to the highest since November 2023.

US motorists in parts of the Midwest and the South, including states that supported Trump, have ​seen some of the steepest increases in fuel costs since the conflict in Iran started.

In Georgia, a swing state, average retail gasoline prices rose 40.1 cents a gallon over the past week, ​according to fuel tracking site GasBuddy.

Andrenna McDaniel, a healthcare insurance worker in South Fulton, Georgia, said she was surprised to see prices skyrocket overnight.

“They jumped up so quickly," she said on Friday, adding that she does not agree with the war at all.

McDaniel, a Democrat, said that for now she is only driving for the most important things, and feels lucky that she works from home so she does not have to drive as ​much as other people do.

Georgia voted for Donald Trump in the 2024 election.

Trump voter Richard Soule, 69, a US Air Force veteran and a retired firefighter, said a little pain at the pump ​is worth Trump's efforts to protect America.

Gasoline prices are displayed at a gas station price display, in Carlsbad, California

Gasoline prices are displayed at a gas station price display, in Carlsbad, California, US, March 3, 2026. REUTERS/Mike Blake/File Photo Purchase Licensing Rights, opens new tab

"When President Trump went in there and bombed out their nuclear, and they just thumbed their nose at it, I believe he did the right thing at the right ‌time," Soule said ⁠on Friday as he filled up his Ford F-150 truck in Marietta, Georgia.

Other states, including Indiana and West Virginia have seen prices rise by 44.3 cents and 43.9 cents, respectively.

PRICES MAY RISE FURTHER

More pain may be on the way, analysts said, as oil prices continue to trend upward. On Friday, US oil futures settled at $90.90 a barrel, up nearly $10 and the biggest single-day rise since April 2020.

“Given current market conditions, the national average price of gasoline could climb toward $3.50 to $3.70 per gallon in the coming days if oil continues rising and supply disruptions persist,” GasBuddy analyst Patrick De ​Haan said.

The disruptions in the Middle East and ​the Strait of Hormuz, a key trade ⁠conduit, have boosted demand for US oil abroad, which in turn has driven up prices for domestic refiners too.

“The US has weaned itself off of its dependence on Middle Eastern crude, but obviously Asian refineries, and to a lesser extent, European refineries have not,” Denton Cinquegrana, chief oil ​analyst with OPIS.

“That’s what you’re seeing happen in the spot market, because the demand for US exports rise, and so the price rise."

Seasonal ​factors could add further ⁠pressure. Gasoline prices typically go up in the spring and peak in the summer due to higher gasoline demand and production of summer-blend gasoline, which is more costly to produce.

Diesel fuel saw an even more aggressive jump since Iran began retaliating against US and Israeli strikes, significantly disrupting shipping in the Strait of Hormuz.

Global diesel inventories have remained in tight supply due to heavy demand for heating and power generation ⁠during a ​prolonged winter in the US and other parts of the world and a structural tightness of refining capacity.

Sticker prices ​of everything from food to furniture go up when the cost of diesel goes up, as the fuel is mainly used in freight transportation, manufacturing, agriculture, and global shipping, analysts said.

“In a world where buzzword seems to be 'affordability', that is ​certainly not going to help," Cinquegrana said.