The Bangladesh Bank (BB) plans to take the unprecedented step of directly inspecting properties offered as collateral for loans exceeding Tk 50 crore as Governor Ahsan H Mansur intensifies efforts to root out fraud and restore discipline to the crisis-hit banking sector.

In a move that signals a significant tightening of oversight for high-value exposures, BB will no longer rely solely on commercial banks’ internal valuations.

Instead, BB teams will verify the existence and value of lands or properties pledged as security.

The initiative aims to dismantle governance failures in the financial system, where politically connected borrowers have historically secured inflated loans against non-existent or grossly overvalued assets.

“Properties or lands used as collateral will be inspected by a BB team, so that lending can be disciplined,” Mansur said at a press conference on monetary policy in Dhaka yesterday. “Those properties must be registered with the BB for scrutiny.”

The directive targets the upper tier of corporate borrowing, a segment rife with non-performing loans.

Shares of eight non-bank financial institutions (NBFIs) flagged for closure by Bangladesh Bank saw sharp gains today (9 February), with prices rising between 10% and 10.42% on the Dhaka Stock Exchange (DSE).

The central bank had in December last year announced plans to shut down nine NBFIs under the Bank Resolution Ordinance 2025, the country's first comprehensive framework for merging, restructuring, or liquidating failed banks and financial institutions. The nine included FAS Finance, Bangladesh Industrial Finance Company (BIFC), Premier Leasing, Fareast Finance, GSP Finance, Prime Finance, Aviva Finance, Peoples Leasing, and International Leasing.

The closure decision came amid persistent irregularities and weak management, with default loan ratios ranging between 75% and 98%. However, BB later excluded GSP Finance, Prime Finance, and BIFC from the closure list, granting them three to six months to improve financial indicators.

Market insiders said investors reacted to the possibility that a new government after the upcoming election might reconsider or delay the closures, triggering strong buying interest. Earlier, the announcement of the closures had sent share prices of these institutions plunging, causing heavy losses for investors.

Today, FAS Finance rose 10.31%, BIFC 8.33%, Premier Leasing 9.78%, Fareast Finance 10%, GSP Finance 10%, Prime Finance 10%, Peoples Leasing 10.42%, and International Leasing 10.42%.

Bangladesh Bank said a total of Tk15,370 crore in deposits remains stuck in these nine institutions, including Tk3,525 crore from individual depositors and Tk11,845 crore from banks and corporate entities. Among individual deposits, Peoples Leasing holds the largest amount at Tk1,405 crore, followed by Aviva Finance (Tk809 crore), International Leasing (Tk645 crore), Prime Finance (Tk328 crore), and FAS Finance (Tk105 crore).

Seven of the nine NBFIs currently report a negative net asset value per share of Tk95, meaning shareholders would receive nothing if assets were liquidated.

Experts said years of weak oversight, related-party lending, failure to recover defaulted loans, and inflated asset valuations left many of these institutions effectively insolvent.

GQ Ball Pen Industries, a publicly listed company, posted a 4.62% year-on-year rise in sales in the first half of the current fiscal year, while its losses narrowed during the July–December period, according to its latest financial statements.

Sales increased to Tk1.13 crore in H1, up from Tk1.08 crore in the same period of FY25. The company reported a net loss of Tk78 lakh, translating to a loss per share of Tk0.87. In the corresponding period a year earlier, it had posted a larger net loss of Tk1.27 crore, with a per-share loss of Tk1.43.

Explaining the continued losses, the company attributed the negative earnings per share (EPS) primarily to higher raw material and input costs, a stronger US dollar, and subdued sales amid weak market demand. These factors led to a significant operating loss during the period, which weighed on overall earnings.

Despite recording a per-share loss of Tk1.83 for FY25, the company declared a 10% cash dividend for general shareholders, excluding sponsor-directors.

Following the dividend payout, the Dhaka Stock Exchange upgraded GQ Ball Pen's listing status to Category A from Category B. The company's shares closed at Tk491.80 on the latest trading day, down 2.05% from the previous session.

The UK's NatWest Group said on Monday it had agreed to buy Evelyn Partners in a deal valuing one of Britain's largest wealth managers at 2.7 billion pounds ($3.68 billion), including debt.

Evelyn's private equity shareholders, Permira and Warburg Pincus, kicked off a sale of Evelyn last year, drawing interest from Barclays, NatWest, Lloyds and the Royal Bank of Canada, Reuters had reported.

The deal creates Britain's largest private banking and wealth management business and transforms NatWest Group's savings and investment offering for its 20 million customers, the British lender said.

NatWest expects the deal to generate about 100 million pounds in annual cost savings and also announced a 750 million pound share buyback.

Bangladesh’s foreign exchange reserves crossed $29 billion for the first time since the central bank began calculating the stock in line with the International Monetary Fund (IMF) method.

Yesterday, reserves stood at $29.47 billion, up from $29.23 billion recorded on February 5, according to Bangladesh Bank (BB).

This is the highest level since July 12, 2023, when the BB started computing reserves under the sixth edition of the IMF’s Balance of Payments and International Investment Position Manual (BPM6) — a global framework that reflects readily available reserves to clear import bills and other international obligations.

Thanks to rising remittances and moderated import demand, reserves have been gradually replenishing for more than a year.

The turnaround began after the fall of the Awami League government in August 2024, as remittance inflows increased.

The BB said gross reserves reached $34.06 billion yesterday, the highest since November 2022. Continued purchases of the greenback also supported the rebound.

Previously, the BB had sold dollars to support the taka’s value, but at the start of the current fiscal year, it began buying US dollars from banks to curb depreciation and stabilise the exchange rate.

The central bank reported purchasing $4.3 billion during this fiscal year from the interbank market through transparent auctions to build reserves.

In its monetary policy for January-June, the BB said it will maintain a focus on exchange rate flexibility, leveraging strong remittance inflows and improved reserves to buffer against external shocks.

Bangladesh’s gross reserves had crossed $48 billion in August 2021 for the first time. They later declined due to a sharp spike in imports following the removal of Covid-19 curbs and rising global commodity prices amid the Russia-Ukraine war.

By May 2024, overall dollar holdings had fallen to $24 billion.

Gold and silver extended gains on Monday, with the yellow metal trading just above $5,000 per ounce as the dollar dipped, while investors awaited key US jobs and inflation data due later in the week to gauge the interest rate trajectory.

Spot gold rose 0.9 to $5,004.61 per ounce by 0748 GMT after a 4 percent climb on Friday. US gold futures for April delivery gained 1 percent to $5,026.30 per ounce.

“This could be the very short-term intraday correlation between the dollar and silver as well as gold (driving the metals up),” said Kelvin Wong, a senior market analyst at OANDA.

The US dollar was at its lowest level since February 4, making greenback-priced metals cheaper for overseas buyers. The yen strengthened after Japanese Prime Minister Sanae Takaichi swept to victory in Sunday’s election.

“Bargain-hunting is (also) pushing gold back above the $5,000 level,” said KCM chief analyst Tim Waterer.

Investors await monthly reports on employment and consumer prices this week, and expect at least two 25-basis-point rate cuts in 2026, with the first one expected in June. Non-yielding bullion tends to do well in low-interest-rate environments.

“Any softness in the jobs data could help gold’s rebound efforts. We are not expecting a rate cut from the Fed until mid-year, unless the jobs data really starts to drop off a cliff,” Waterer said.

San Francisco Federal Reserve President Mary Daly said on Friday she thinks one or two more interest rate cuts may be needed to counteract weakness in the labour market.

Spot silver climbed 3.7 percent to $80.89 per ounce after a near 10 percent gain in the previous session. It hit an all-time high of $121.64 on January 29.

“Unless silver is able to clear above that key resistance at $92.24, I’m not so convinced in terms of a probability perspective of a medium uptrend,” Wong said.

The Bangladesh Bank (BB) kept its policy rate unchanged at 10 percent yesterday, citing persistent high inflation ahead of the national election this week.

The policy rate, or repo rate, is a key tool used to influence credit demand and money circulation, aiming to contain demand-driven inflation. The central bank said it would maintain its tight monetary stance throughout the January-to-June period.

In line with this approach, the BB has kept the double-digit policy rate since October 2024.

Despite this monetary tightening, inflation rose for the third consecutive month, reaching 8.58 percent in January.

Rising food prices ahead of Ramadan, the month of fasting for Muslims when demand for certain food items usually ticks up, contributed to the increase, according to the state statistical agency BBS.

The 12-month average inflation in January stood at 8.66 percent, well above the BB’s target of reducing the price pressure below 7 percent.

While unveiling the monetary policy, BB Governor Ahsan H Mansur said many objectives had been achieved, but inflation remained above target. He highlighted broader economic improvements, especially in governance and stabilising the banking and financial sector.

“However, inflation remains slightly behind target. The goal was to bring it down to around 7 percent, but it is still about 8.5 percent,” Mansur said, adding that monetary policy alone cannot achieve all outcomes, and that it must be coordinated with fiscal measures.

In the Monetary Policy Statement, the BB reduced the Standing Deposit Facility (SDF) rate, at which commercial banks park excess liquidity with the central bank, by 50 basis points to 7.5 percent.

Amid weak private-sector credit growth, the adjustment is intended to discourage banks from holding funds at the BB and encourage lending to the private sector.

Credit to the private sector fell to a historic low of 6.1 percent in December, while public-sector lending rose to 28.9 percent. However, the projection for private-sector credit growth was at 7.2 percent and public-sector growth at 20.5 percent.

Mansur noted that government borrowing heavily influences the money market, tightening liquidity and keeping interest rates high, which crowds out private-sector lending.

“Total credit has grown, but a large portion has gone to the government rather than the private sector, creating distribution pressure,” he said.

In the Monetary Policy Statement, the BB projects public-sector credit growth to reach 21.6 percent in the second half of FY26, driven by pre-election fiscal spending and post-election administrative expenditures during the government transition.

Besides, the government’s budget target of borrowing Tk 1,18,000 crore from the banking system was factored into this projection.

The governor said domestic credit expansion is strong, but private-sector lending could have grown faster if government borrowing were lower.

Mansur said persistent government demand in the money market keeps pressure on overall demand and prevents interest rates from falling rapidly.

He said high rates, though restrictive, have helped stabilise the exchange rate and supported foreign reserve accumulation.

“Earlier, Bangladesh repeatedly failed to meet IMF reserve targets, but since August 2024 all quarterly targets have been achieved or even exceeded, even before receiving IMF funds,” Mansur said.

Gross foreign exchange reserves stood at $34.06 billion yesterday, up from around $26 billion a year earlier. Under IMF calculations, reserves were $29.47 billion according to the BPM6 model.

The policy statement noted that economic activity remained broadly stable, supporting a positive growth outlook. “However, political developments, soft industrial output, persistent inflation, and global headwinds may undermine growth prospects,” it added.

Inflation has moderated, but at a slow pace, suggesting expectations are not yet firmly anchored around the target. “This development underscores the need for continued policy tightening, which should cool inflation further by the end of this fiscal year,” the statement said.

Syed Mahbubur Rahman, managing director of Mutual Trust Bank, told The Daily Star that the policy rate alone cannot curb inflationary pressure, given supply-chain constraints and other factors.

He said that most loans in Bangladesh are corporate, with only 10 percent in retail, so interest rate hikes do not affect consumers immediately. Private-sector loan demand would not rise sharply even after the election.

Birupaksha Paul, professor of economics at the State University of New York in Cortland, said the 10 percent repo rate remains appropriate but is contributing to cost-push inflation.

“Private credit growth was 6.1 percent in December 2025 and is projected to be 8.5 percent in June 2026. While that part is tightened with the aim of reducing inflation, public-sector credit growth, projected at 21.6 percent, will be the main driver of sustained high inflation.”

He noted that the projection is ambitious, given that public-sector credit reached 28.9 percent in December 2025. Additional spending on new pay scales could make reducing it to around 22 percent difficult.

Paul, a former chief economist of BB, added that the economy may gain momentum after the election, but its strength will depend on improvements in law and order.

Ashikur Rahman, principal economist at the Policy Research Institute, said the BB’s cautious stance is justified as inflation remains stubbornly high. The recent rise in prices appears partly driven by electoral dynamics, which boost consumption ahead of national elections.

Fahmida Khatun, executive director at the Centre for Policy Dialogue (CPD), said contractionary monetary policy is appropriate given persistent inflation, but fiscal policy also needs tightening, and market monitoring should be strengthened.

She added that a prolonged tight stance is unfavourable for investment, but controlling inflation must take priority.

In a reaction, the Dhaka Chamber of Commerce and Industry expressed concern over the BB’s decision to maintain a contractionary stance solely to control inflation.

“The reality, however, tells a different story. Despite prolonged tight monetary conditions, inflation has not been effectively contained, proving that this tool has largely failed while inflicting serious damage on productive economic activities,” the chamber said.

The next elected government must prioritise bold economic reforms starting from its very first day in office to sustain macroeconomic stability and reignite growth momentum, economists and policy analysts said today (9 February).

They emphasised that reforms should be front-loaded within the first two years of the tenure, arguing that postponement often leads to political hesitation and a loss of momentum.

The observations came at a seminar titled "Macroeconomic Insights: An economic reform agenda for the elected government," jointly organised by the Policy Research Institute (PRI) and the Australian Government's Department of Foreign Affairs and Trade (DFAT) at a city hotel.

Speaking as the chief guest, Finance Adviser Salehuddin Ahmed said resistance to reform was deeply entrenched across institutions.

"In government and everywhere, there is a lack of coordination and an apathy to reforms. Everyone can talk about reforms, but [many] want the status quo," he said.

"Especially those who have pensions, they want 'let it stay as it is, let it run for another 10 years'. This inertia became the problem we faced," he said.

Political hesitation, reform fatigue

KAS Murshid, former director general of the Bangladesh Institute of Development Studies (BIDS), noted Bangladesh's reform record showed that major changes usually happened only under external pressure.

"The interesting thing about reform is that if you look back at our economic history, the only time when you see significant reform taking place is when the IMF breathes down our necks," he said.

He noted that governments often shy away from necessary changes due to fear of political backlash, usually acting only when forced by external realities.

To counter this, he proposed a dedicated institutional framework. "We actually need some kind of institution, like a Regulatory Reform Commission, that will be solely engaged in looking at policy reforms, researching policy reforms and making recommendations to the government," he said.

Jobs, skills, social protection

Fahmida Khatun, executive director of the Centre for Policy Dialogue (CPD) said, despite years of high GDP growth, the economy failed to generate adequate employment, a key driver behind the recent social uprisings.

She pointed to a serious skills mismatch in the labour market, where higher educational qualifications often correlate with higher unemployment rates.

Fahmida urged the next government to focus heavily on labour market reforms and social protection, noting that without domestic resource mobilisation, funding these safety nets would be impossible.

Speaking at the event, Clinton Pobke, deputy high commissioner at the Australian High Commission in Bangladesh, said the country had strong economic potential if the right policies were implemented. "If the foundational policy pieces are put in place, there is no reason Bangladesh couldn't sustain 8-10% growth," he said.

Presenting the keynote paper, PRI principal economist, Ashikur Rahman, highlighted serious weaknesses in the banking sector, describing the situation as precarious.

He revealed that while non-performing loans (NPLs) in private sector banks were reported at around 7% earlier in 2024, asset quality reviews (AQRs) have now uncovered the real figure to be approximately 32%.

"The NPL did not suddenly increase; it was hidden," he said. "The banking sector has a staggering Tk6.4 trillion in distressed assets sitting on balance sheets."

PRI Chairman Zaidi Sattar, along with other industry experts and development partners, also spoke at the seminar, reiterating calls for a regulatory reform commission and stronger policy coordination to navigate the changing geopolitical landscape.

The Economic Partnership Agreement (EPA) between Bangladesh and Japan is expected to come into force immediately after approval by Japan's newly formed parliament.

Officials said the deal will initially cost Bangladesh around Tk20 crore in annual revenue, while creating significant opportunities for exports, services, investment, and employment.

The announcement was made today (9 February) at a press conference held by the Ministry of Commerce at the Secretariat. Commerce Adviser Sk Bashir Uddin and Commerce Secretary Mahbubur Rahman addressed the press, outlining the key features, benefits, and challenges of the EPA.

The agreement was signed on Friday in Tokyo, with Sk Bashir Uddin and Japanese Deputy Foreign Minister Hori Iwao representing their respective countries. Negotiations began on March 24, 2025, and after seven rounds covering 21 issues, the agreement was finalised.

Trade and Tariff Benefits

Under the EPA, Bangladesh will grant Japan duty-free access for 1,039 products, while Japan will provide duty-free entry for 7,379 Bangladeshi products. Currently, Bangladesh's tariff line includes 7,458 items.

Commerce Secretary Mahbubur Rahman explained that according to WTO principles, countries are generally required to provide duty-free access to 80% of products, which will be implemented gradually over 5 to 15 years, with some products taking up to 18 years to achieve full duty-free treatment. He added that additional products will be granted duty-free access to Japan over time.

Mahbubur Rahman also noted that many products, including food items, cotton, and yarn, already enter Japan at zero duty, while machinery faces 1% duty.

Combining these, Bangladesh has already provided 1,039 products with duty-free access, meaning the immediate revenue loss is minimal.

Bashiruddin said the expected initial revenue loss is around Tk20 crore or less per year.

Service Sector and Investment Opportunities

The EPA allows Bangladesh to operate 120 services duty-free in Japan, while Japan opens 98 services in Bangladesh. Currently, sectors such as five-star hotels and mobile phone services are included. Officials said the agreement is expected to attract Japanese investment into Bangladesh's service sector.

A key feature of the agreement is the single-stage transformation facility for Bangladesh's ready-made garments. Bangladesh can import fabric, manufacture garments with only 30% value addition, and export them duty-free to Japan. Bashiruddin highlighted that this provision could significantly enhance the competitiveness of Bangladesh's garment industry.

Implementation Timeline

Mahbubur Rahman said the EPA must be approved by parliament before coming into effect. Following Japan's Sunday election, the National Diet is expected to convene soon, after which the agreement will become operational.

Bashiruddin added that Bangladesh is not rushing implementation, as it already enjoys duty-free access under its LDC status, extended until 2029.

Economic and Employment Opportunities

Bashiruddin said the agreement creates broad economic opportunities, including expanded exports, investment, and employment for Bangladeshis in Japan.

The EPA has already increased the flow of Bangladeshis to Japan, particularly for language training, enabling them to access a variety of skilled jobs. Japanese language institutes are expected to expand, providing further workforce development.

Challenges and Next Steps

On potential challenges, Sheikh Bashiruddin said that as Bangladesh graduates from LDC status, it must liberalize trade under WTO frameworks. Businesses will need to strengthen their capacity to fully leverage the EPA; otherwise, challenges may arise. The agreement provides 18 years to build sectoral capacity, ultimately benefiting domestic industries and consumers.

Ramadan Market Stability

Addressing market stability during the upcoming Ramadan, Sheikh Bashiruddin said the government has ensured sufficient imports to meet demand, despite potential strikes and misinformation on social media.

While acknowledging that strikes are a democratic right, he warned that unrest could negatively affect markets. Officials said imports are already in transit, ensuring that sufficient goods will reach the market. He expressed confidence that the upcoming Ramadan would see better market stability than last year.

Business leaders today (9 February) demanded stricter watch over large importers and extortion networks, warning that harassing small retailers will not help keep prices of essential commodities stable ahead of Ramadan and the upcoming national election.

They blamed macro-level extortion by a section of the police and administration for market instability, saying such practices directly push up prices of daily essentials.

The speakers urged the authorities to increase monitoring on major importers, mill gates and key supply-chain points rather than conducting frequent drives against small shopkeepers.

The demands were raised at a consultation meeting organised by the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) to review the import, stock, supply and price situation of essential commodities ahead of Ramadan.

The meeting was chaired by FBCCI Administrator and Additional Secretary to the Ministry of Commerce Md Abdur Rahim Khan.

Addressing the meeting, Abdur Rahim Khan said that, as in previous years, FBCCI would monitor the market during Ramadan to ensure normal supply and reasonable prices so that consumers can buy essential goods at fair rates with the cooperation of businesses.

He noted that the volume of letters of credit (LCs) opened this year is significantly higher than last year, describing it as a positive sign for market stability. He also urged all stakeholders to remain cautious and restrained so that no unexpected or abnormal behaviour disrupts the supply chain.

Mohammad Imran Master, president of the Bangladesh Raw Materials Wholesale Traders Association, said perishable goods cannot be controlled by syndicates due to their nature.

"Supplies of onions, chillies, brinjal and coriander are adequate.

Prices may rise slightly during the first few days of Ramadan if demand increases suddenly, but that will not be long-lasting," he said.

He added that there could be some pressure on lemon supply, though no major shortage is expected overall.

Golam Mowla, general secretary of the Bangladesh Edible Oil Wholesalers Association, criticised enforcement agencies for targeting small retailers every Ramadan. "NSI, DGFI or the district administration raids small shops as soon as Ramadan begins. For selling at eight annas or one taka more, small traders are fined hundreds of thousands of taka," he said.

"But there is no effective monitoring of large importers or at the mill-gate level, where hundreds of crores are siphoned off. Oversight must be ensured at the higher level."

Market observer Kazi Abdul Hannan warned that large-scale extortion could intensify during the transition period of Ramadan and the national election. He alleged that in some markets, traders are forced to pay lump-sum extortion ranging from Tk5 lakh to Tk10 lakh to district and upazila-level administration and police. "This extortion has a direct impact on commodity prices," he said.

Highlighting the plight of poultry farmers, Poultry Association adviser Khandaker Monir Ahmed said producers are on the brink of collapse as selling prices have fallen far below production costs. "Against a production cost of Tk10.58 per egg, farmers are being forced to sell at Tk5–6," he said.

Criticising the government's subsidised egg sales, he warned that fixing prices below production costs would eventually destroy the industry.

Consumers Association of Bangladesh (CAB) General Secretary Md Humayun Kabir Bhuiyan said 10 monitoring teams will operate daily across Dhaka during Ramadan to oversee market conditions. He urged traders to preserve cash memos and sell goods at reasonable profit margins, warning that those creating artificial shortages through unethical practices would face strict action.

Business leaders at the meeting also proposed withdrawing additional duties on dates and suggested importing frozen meat to address potential protein shortages during Ramadan.

Speakers agreed that if proper monitoring is ensured and extortion is curbed, there is no rational reason for prices to rise during Ramadan this year.

Representing Meghna Group, Deputy General Manager Taslim Shahriar said there is no problem in the sugar market. "We are supplying a record volume of sugar. Last year sugar was priced at Tk130 per kg; now it is Tk92–93 at the mill gate," he said.

He added that despite fluctuations in the international market and some port-related challenges due to long holidays, sufficient stock is in the pipeline and the market is expected to remain stable during Ramadan.

FBCCI former director Gias Uddin Khokon painted a grim picture of the overall business environment, alleging widespread bribery and harassment.

"To obtain a gas connection for industry, bribes of up to Tk5 crore are demanded. Although bank interest rates were supposed to decrease, they have increased instead," he said. "With extortion, bribery and harassment at every step, businesses cannot control prices. Market monitoring should have started much earlier."

Representatives from government agencies, private sector bodies, business owners' associations and various trade organisations were present at the consultation meeting.

The newly signed Economic Partnership Agreement (EPA) with Japan will cost Bangladesh less than Tk 20 crore annually in forgone import duties on Japanese goods, while potentially delivering substantial benefits through expanded exports and labour mobility to the world’s fifth-largest economy.

The February 6 agreement, signed in Tokyo, creates a heavily asymmetric arrangement that favours Bangladesh, according to a briefing by Commerce Adviser Sk Bashir Uddin held at the commerce ministry office in Dhaka yesterday.

Under the deal, Japan will provide immediate duty-free access to 7,379 Bangladeshi products while Bangladesh will grant the same privilege to just 1,039 Japanese items, a ratio of more than seven to one.

The number of duty-free Japanese products will increase gradually over 18 years. Bangladesh’s garment industry, the crown jewel of the export sector, stands to gain significantly from favourable terms that could enhance its competitiveness in the Japanese market.

Bangladesh’s garment industry stands to gain significantly from favourable terms that could enhance its competitiveness in the Japanese market
The agreement permits single-stage transformation, allowing manufacturers to enjoy zero-duty benefits even when using imported fabrics, Commerce Secretary Mahbubur Rahman said at the conference.

This provision addresses a key constraint for Bangladeshi exporters, who often rely on imported textiles due to limited domestic fabric production capacity.

The secretary also noted that Bangladesh, being a least developed country (LDC), enjoyed a privilege in some areas in the deal with Japan, a developed nation.

For instance, he said Bangladesh has been given 10 years of relaxation in the intellectual property rights which means Japan will not ask for the patent right of the goods in next 10 years from the date of enforcement of the EPA.

Beyond trade in goods, the EPA creates significant opportunities for Bangladeshi professionals in Japan’s ageing, labour-constrained economy.

The agreement enables skilled workers, including doctors, nurses, caregivers, and domestic helpers, to access Japanese employment markets, Adviser Bashir Uddin said.

Japanese investors are already establishing language training centers in Bangladesh to prepare workers for these opportunities.

The commerce adviser expressed optimism that students and professionals will be able to access opportunities in the G-7 nation, potentially creating a new avenue for foreign remittances.

The services component of the agreement also tilts in Bangladesh’s favour. Bangladesh secured access to 120 Japanese sub-sectors while opening 98 sub-sectors across 12 sectors to Japanese investment.

The EPA’s timing proves crucial as Bangladesh prepares to graduate from LDC status later this year, which typically triggers loss of preferential trade terms. While Japan has separately extended existing LDC benefits for Bangladeshi goods until 2029, the EPA provides a more permanent framework for market access.

The deal represents Bangladesh’s first comprehensive bilateral trade agreement with a major developed economy, following a more limited preferential trade arrangement with Bhutan in December 2020. It reflects the government’s strategy to secure preferential access with key trading partners before losing LDC privileges, with similar negotiations underway with other major economies to maintain export competitiveness in the post-LDC era.

The agreement awaits ratification by Japan’s parliament, the Diet, which is expected within the next few days as the general election in Japan was held February 8, said the commerce adviser. The adviser also said seven rounds of negotiation were held to sign the agreement between the two countries.

State Minister for Foreign Affairs in Japan HORII Iwao signed the agreement on behalf of Japan while Bashir Uddin from Bangladesh on behalf of Bangladesh.

Bangladesh Bank has yet again decided to be clenched-fist on money supply.

During the second half of this fiscal year, according to monetary policy statement (MPS), the policy rate will remain unchanged at 10 per cent as inflation frowns.

In the new MPS unveiled Monday, the central bank, however, takes into cognizance concerns vented by economists and businesses over investment stagnation and announces some stimuli like higher credit supply to private sector.

But monetary experts opine differently about the inflation-control strategy, saying that the Bangladesh Bank (BB) brings some changes in the projections of monetary policy statement that might further feed into inflation, driven largely by supply-side factors.

According to the latest MPS for January-June period, the disinflation process is currently showing some inconsistencies, but remains at a relatively elevated level, suggesting that a policy-rate reduction may not be prudent at this time.

"It's essential to anchor the exchange-rate stability. As this helps contain imported inflation, lowering the policy rate could unintentionally create depreciation pressure on the exchange rate," it is stated in the policy document.

There are also several near-term inflation risks, including the upcoming national elections, the approaching holy month of Ramadan, and the possible announcement of a new national pay scale.

"These elements typically stimulate demand and consumer spending, underscoring the need for a careful, balanced monetary policy."

Accordingly, BB will maintain the policy rate at 10.0 per cent and continue its tighter stance in the second half of the fiscal 2025-26, the regulator says to justify the carryover contractionary policy.

The Standing Lending Facility (SLF) will be held at 11.5 per cent. However, BB decided to lower Standing Deposit Facility (SDF) by 50 basis points from 8.0 per cent to 7.5 per cent.

The lowering of SDF is aimed at encouraging interbank money market as well as private-sector investment, loan and advances activities.

Under the MPS, the broad money or M2 is projected at 7.8 per cent until December 2025 but the money-supply growth actually reached 9.60 per cent. The initial broad money projection was 8.50 per cent by end of June next. Now the projection is revised upward to 11.50 per cent.

In terms of credit to the public sector, the projection has been enhanced to 21.60 per cent by June next in place of prior projection of 18.10 per cent.

Simultaneously, the projection of private-sector credit growth has also been expanded to 8.50 per cent until June next from the initial projection of 8.0 per cent, in accordance with the latest MPS.

Bangladesh Bank Governor Dr Ahsan H. Mansur said they ought to concentrate on building up foreign-exchange reserves. In the process, they have purchased more than US$4.50 billion from the banks in the last seven months and injected liquidity worth over Tk 500 billion into the market.

"Yes, it has a cost but we don't see it as cost because the broad money projection (11.50 per cent) is still lower if we consider the nominal GDP and inflation target (over 12 per cent)," he told the policy-presentation function.

Talking about the nature of the MPS, the central bank governor said it is tightened but not as tight as it used to be. "The reality is we're easing up within the tighter framework."

Responding to a question over possible impact of the government bank- borrowing pressure if the proposed pay scale is implemented, the governor said it would certainly push up government bank borrowings if it is not met by increasing revenues.

He said the credit growth to the public sector had already climbed as high as 28.9 per cent by December last. "If it increases further, it will have negative impact on private sector. So, we need to make the government understand the consequences. We want the government will meet a portion of the funding requirement through revenue mobilisation so that presser is lesser."

Dr Mansur thinks it will cause two problems: interest rate will not decrease or rise further and fuel inflationary pressure. "These are unpleasant tradeoffs. We cannot deny it."

Regarding the lowering of SDF rate by 50 basis points, he said there are banks having surplus liquidity but they did not invest in the money market. Instead, they keep the funds into the BB at 8.0 per cent.

"The BB does not need money. We want banks invest the money in interbank market or in the private sector. That's why we cut the SDF rate to discourage it," he added.

Contacted for his view, former lead economist of World Bank's Dhaka Office Dr Zahid Hussain said the monetary-policy regime shifted to interest-rate targeting from monetary targeting. Under the policy shift, there is no target but projections.ঢাকা বিমান টিকেট

He says the central bank can contain inflation through controlling demand-side factors but the latest inflation spikes largely driven by the supply-side factors where the central bank has almost no control.

In this MPS, the economist says, some sort of easiness has been observed. "If demand side loses, it will create additional fuel to the fire. With this strategy, bringing down inflation at the expected level is not realistic."

About the SDF-rate cut, he says the rate is lowered mainly because of public-sector-borrowing pressure. "It may be a mild measure to prevent crowding-out effect." The economist was suggesting the central bank to mention the future path of reforms like Bangladesh Bank Order, Bank Company Act, Distressed Asset Management Act and AQR (asset quality review) in the MPS, which is missing.

In an immediate reaction, Dhaka Chamber of Commerce and Industry (DCCI) expressed grave concern and disappointment over central bank's decision to maintain contractionary monetary policy solely in the name of controlling inflation.

"Despite prolonged tight monetary conditions," it says, "inflation has not been effectively contained, proving that this tool has largely failed while inflicting serious damage on productive economic activities."

The trade body believes growth, employment and investment cannot be revived under an excessively restrictive monetary regime. "We look forward to the next elected government adopting a more pragmatic and growth-supportive policy framework coordinating the fiscal and monetary policy," it says, as the election is barely three days away now.

The benchmark index of the Dhaka Stock Exchange (DSE) posted its strongest single-day gain of 2026 yesterday (9 February), as investors rushed to take early positions ahead of the national election, buoyed by growing optimism over political clarity and expectations of continued capital market reforms under the next government.

The DSEX jumped 1.58%, gaining 82 points to close at 5,311, marking the sharpest one-day rise this year. The rally brought the index close to its recent peak of 5,337, recorded on 8 October 2025, and reflected a decisive shift in investor sentiment after weeks of cautious trading.

Broad-Based Rally and Rising Turnover

Market breadth was overwhelmingly positive, with 327 advancing issues against 37 decliners, while 33 stocks remained unchanged. Turnover rose 35% to Tk646 crore, driven by participation from both retail and institutional investors.

The surge added around Tk3,300 crore to the Dhaka bourse's market capitalisation in a single session, highlighting renewed confidence in equities.

According to EBL Securities, investors were motivated by the opportunity to take early positions in momentum-driven and undervalued stocks, encouraged by expectations of a favorable market trend following improved political clarity. Buyers dominated trading from the outset, maintaining control throughout the day, leading to broad-based gains across sectors.

Analysts noted that the announcement of the election schedule and clearer signals from political parties on economic and market reforms encouraged investors to return to equities more decisively after a prolonged period of subdued sentiment.

Sector Highlights

Banking stocks led trading activity, accounting for 20.6% of total turnover, as investors bet on improved profitability and policy support. Pharmaceutical shares contributed 15.7%, while textile stocks made up 15.6%, indicating broad-based interest across key industrial sectors.

Minhaz Mannan Emon, director of the Dhaka Stock Exchange, told The Business Standard that reforms by the Bangladesh Securities and Exchange Commission (BSEC) under the interim government have played a key role in rebuilding investor confidence. These initiatives include improving the quality of IPOs, strengthening market discipline, curbing manipulation through amended IPO, margin loan, and mutual fund rules, and taking action against major market manipulators.

Although earlier reforms did not trigger a sustained rally, investor sentiment has strengthened after the country's two major political parties separately addressed the capital market in their election manifestos, according to Ashequr Rahman, managing director of Midway Securities. Investors are hopeful that whichever party forms the government will honor commitments to market reforms, ensuring a more stable and predictable policy environment.

Top Gainers and Broad Participation

Trading activity centred on large-cap and actively traded stocks, with Simtex Industries, Asiatic Laboratories, Dhaka Bank, Islami Bank, and Bangladesh Shipping Corporation emerging as the top traded counters. Non-bank financial institutions led sectoral gains with a 2.6% rise, followed by textile and cement stocks, each advancing 2.4%.

Individual gainers included Sharp Industries, AB Bank, LankaBangla Finance, IFIC Bank, and Premier Bank, reflecting strong buying interest across manufacturing and financial sectors. Some profit-taking occurred in stocks like Islami Bank and Al-Arafah Islami Bank, as well as select mutual funds and industrial shares, causing minor price corrections.

Market participants said the broad-based nature of the rally indicates a healthy recovery rather than a narrow speculative surge confined to a few stocks.

Workers and employees at Chattogram Port have suspended their indefinite strike over the proposed New Mooring Container Terminal deal with DP World until 15 February, considering the upcoming general election and the need to keep goods moving ahead of Ramadan.

The announcement came in a press release issued early today (9 February) by the Chattogram Bandar Rokkha Sangram Parishad, which has been spearheading protests for the past nine days.

The group said Shipping Adviser Brig Gen (retd) M Sakhawat Hussain and Bida Chairman Chowdhury Ashik Mahmud Bin Harun had earlier told journalists that the interim government would not sign the NCT agreement during its tenure.

Despite the assurance, the platform alleged that the Chittagong Port Authority had taken a series of punitive actions against protesting workers. These included the arrest of five port employees, the filing of what it described as harassment cases, the transfer of 15 employees to different ports across the country and the imposition of various disciplinary measures.

It added that housing allocations of protesting workers had been cancelled and that 16 employees had been suspended, along with other penalties.

"In the interest of the 13th national election in 2026 and to ensure uninterrupted release of essential goods ahead of Ramadan, and following discussions with our leaders, we have decided to suspend the strike programme from 8am on 9 February to 15 February," the press release said.

The workers warned that failure to address their concerns within this period would prompt fresh programmes, to be announced at a press conference on 16 February.

The statement was signed by Mohammad Humayun Kabir and Mohammad Ibrahim Khokon, coordinators of the council.

It began its work abstention programme at 8am on 31 January, initially observing an eight-hour stoppage from 8am to 4pm for three days.

From last Tuesday (3 February), the protest escalated into an indefinite work stoppage, which was briefly suspended for two days following a visit by the shipping adviser on Thursday.

Despite the pause, the council alleged that further administrative actions by the CPA had reignited tensions, prompting workers to resume an indefinite strike yesterday morning.

The renewed stoppage disrupted operations at port terminals and the outer anchorage.

Indian refiners are avoiding Russian oil purchases for delivery in April and are expected to stay away from such trades for longer, refining and trade sources said, a move that could help New Delhi seal a trade pact with Washington.

The US and India moved closer to a trade pact on Friday, announcing a framework for a deal they hope to conclude by March that would lower tariffs and deepen economic cooperation.

Indian Oil, Bharat Petroleum and Reliance Industries are not accepting offers from traders for Russian oil loading in March and April, said a trader who approached the refiners.

These refiners, however, had already scheduled some deliveries of Russian oil in March, refining sources said. Most other refiners have stopped buying Russian crude.

TRUMP SAYS INDIA 'COMMITTED' TO HALTING PURCHASES

The three refiners and the oil ministry did not respond to requests for comment. The trade minister on Saturday referred questions about Russian oil to the foreign ministry.

A foreign ministry spokesperson said: "Diversifying our energy sourcing in keeping with objective market conditions and evolving international dynamics is at the core of our strategy" to ensure energy security for the world's most-populous nation.

Although a US-India statement on the trade framework did not mention Russian oil, President Donald Trump rescinded his 25 percent tariffs on Indian goods, imposed over Russian oil purchases, because, he said, New Delhi had "committed to stop directly or indirectly" importing Russian oil.

New Delhi has not announced plans to halt Russian oil imports.
India became the top buyer of discounted Russian seaborne crude after Russia invaded Ukraine in 2022, spurring a backlash from Western nations that had targeted Russia's energy sector with sanctions aimed at curtailing Moscow's revenue and making it harder to fund the war.

INDIA'S RUSSIAN-OIL IMPORTS A FRACTION OF 2025 LEVELS

One regular Indian buyer is Russia-backed private refiner Nayara, which relies solely on Russian oil for its 400,000-barrel-per-day refinery. Sources said Nayara may be allowed to keep buying Russian oil because other crude sellers pulled back after the European Union sanctioned the refiner in July.

Nayara also does not plan to import Russian crude in April due to a month-long refinery maintenance shutdown, a source familiar with its operations said.

Nayara did not respond to an email seeking comment.

Indian refiners may change their plan and place orders for Russian oil only if advised by the government, sources said.

Trump's order said US officials would monitor and recommend reinstating the tariffs if India resumed oil procurement from Russia.

Sources said last month that India was preparing to cut Russian oil imports below 1 million bpd by March, with volumes eventually falling to 500,000–600,000 bpd, compared with an average 1.7 million bpd last year. India's Russian oil imports topped 2 million bpd in mid-2025.

The intake of Russian oil by India, the world's third-biggest oil consumer and importer, declined to its lowest level in two years in December, data from trade and industry sources show.

Indian refiners have been buying more oil from Middle Eastern, African and South American countries as they scale back Russian oil purchases.

Bangladesh has expressed interest in purchasing railway rolling stock, including freight wagons and passenger coaches, from Pakistan, citing competitive pricing and manufacturing capability, officials said.

A two-member Bangladeshi delegation recently visited Pakistan Railways facilities, including the carriage factory in Islamabad and the Mughalpura Workshop in Lahore, to assess production capacity and technical standards. The delegation included Farhad Islam, secretary for international organisations and consular affairs, and Mohammad Iqbal Hussain Khan, Bangladesh's high commissioner to Pakistan, says Dawn.

During the visit, Pakistan Railways officials briefed the delegation on technical capabilities, ongoing projects and manufacturing processes, including locomotive maintenance and rehabilitation. The Bangladeshi officials conveyed appreciation for Pakistan's technical expertise and professional competence, according to officials familiar with the discussions.

Bangladesh has traditionally sourced railway rolling stock from India but is now exploring Pakistan as a cost-effective alternative. Pakistan has previously exported rolling stock to Bangladesh, with deliveries dating back to the 1980s.

Pakistan Railways currently supplies coaches and freight wagons to several countries, including Sri Lanka, Nepal, Chile and Argentina, reflecting what officials describe as modern, indigenous manufacturing capabilities.

Pakistan's Railways Minister Hanif Abbasi has indicated an intention to advance bilateral cooperation in the railway sector. Officials said the next phase of engagement will involve a detailed technical evaluation by railway experts from Bangladesh.

Bangladesh Bank is set to announce its latest monetary policy today, with the policy repo rate expected to remain unchanged at 10% as inflation continues to stay well above the central bank's target.

The policy will be unveiled at 11am by Bangladesh Bank Governor Ahsan H Mansur and will cover the six-month period from January to June.

This will be the interim government's third monetary policy announcement, and officials indicate that the central bank will continue with a contractionary stance to rein in persistent inflationary pressures.

Inflation rose for the third consecutive month in January, reaching its highest level in eight months. According to data released by the Bangladesh Bureau of Statistics yesterday, the overall inflation rate climbed to 8.58% in January, up from 8.49% in December, 8.29% in November and 8.17% in September.

The policy repo rate – the rate at which Bangladesh Bank lends to commercial banks – is expected to be kept unchanged as inflation has yet to fall to the targeted 6.5% set for FY26 under the previous monetary policy.

A senior Bangladesh Bank official said the primary objective of the central bank remains controlling inflation, which is why the upcoming monetary policy will continue to be contractionary.

Another senior official told The Business Standard that businesses have been pressuring the central bank to reduce the policy rate, arguing that high interest rates have made borrowing costly and constrained business operations.

"However, inflation remains elevated. Under the current circumstances, there is no plan to change the policy rate," the official said, adding that a rate cut could be considered in the next policy cycle if inflation shows a sustained decline.

Officials also said maintaining stability in the exchange rate will be a key focus going forward, as volatility in the dollar rate tends to push up import costs and domestic prices.

The Bangladesh Bank announces its monetary policy every six months.

After the interim government took office in August 2024, the central bank adopted a fully contractionary monetary policy and has maintained it since.

Meanwhile, credit growth in the private sector remains subdued. The target for private sector credit growth was set at 7.20% for December 2025, but actual growth stood at 6.10% at the end of December – its lowest level in two decades.

Bankers say weak investment sentiment following political changes has led businesses to scale back borrowing from banks, contributing to the slowdown in credit growth.

Bangladesh is set to sign a reciprocal tariff agreement with the United States today in Washington, aiming to address trade imbalances and secure continued access to the American market for Bangladeshi exports.

Commerce Adviser Sk Bashir Uddin and Secretary Mahbubur Rahman will participate in the signing ceremony virtually from Dhaka, while a delegation led by Khadija Naznin, additional secretary and head of the WTO wing, will represent the country in person at the US capital.

Bashir yesterday said details of the agreement would be disclosed after the signing ceremony.

The commerce adviser has already signed the document in Dhaka, which has been carried to Washington to be exchanged with the signature of US Trade Representative (USTR) Jamieson Greer.

The agreement comes in the context of the US decision to impose reciprocal tariffs on goods from several countries, including Bangladesh, in an effort to reduce its trade deficit. Since August last year, Bangladeshi exports to the US have been subject to a 20% reciprocal tariff.

Bangladesh exports goods worth about $8 billion annually to the US market, while US exports to Bangladesh amount to about $2 billion, resulting in a significant trade gap.

Officials said the agreement would include commitments by Bangladesh to increase imports from the US, particularly wheat, edible oil, fuel and cotton. The government has also decided to purchase 25 aircraft from US manufacturer Boeing as part of broader trade balancing efforts.

Speaking at a press conference at the Secretariat yesterday, the commerce adviser said the decision to procure 25 Boeing aircraft was aimed at maintaining the continuity of Bangladeshi exports to the US market.

The purchase is expected to cost between Tk30,000 crore and Tk35,000 crore, with payments to be made over 20 years.

He noted that the US had initially proposed the purchase of 47 aircraft, but the government opted for 25 for the time being. The interim administration is finalising the agreement to ease the burden on the next elected government, he added.

The adviser said further details of the reciprocal tariff agreement, including its specific terms and conditions, would be disclosed after the signing ceremony.

Referring to ongoing negotiations on tariff reductions, he said that the US had initially imposed a 37% tariff on Bangladeshi exports, which was brought down to 20% through discussions. Efforts are continuing to reduce tariffs on Bangladesh's main export item – readymade garments – to zero, he added.

Bashir observed that Bangladesh had been the only country whose draft agreement details were previously made public, a development he said had complicated earlier negotiations.

Had the details not been disclosed, he believed, it might have been possible to secure even lower tariff concessions.

Private sector activity continued to expand in January, albeit at a slower pace, as the Purchasing Managers' Index (PMI) eased to 53.9 from the previous month.

The moderation signals sustained growth momentum, though at a more measured rate amid softer global conditions.

Released on Sunday, the latest PMI reading showed expansion across agriculture, manufacturing and services, while construction returned to growth after contracting in December, underscoring a broadly resilient domestic economy.

Agriculture recorded its fifth consecutive month of expansion, although momentum weakened.

New business and overall activity continued to grow, but employment and input costs declined. Order backlogs in the agricultural sector also remained in contraction, albeit at a slower pace.

The manufacturing stayed in expansion for the 17th straight month, though growth softened compared to December last.

New orders, factory output, imports, input prices and supplier delivery times all increased, even as export receipts remained subdued.

Of concern, new export orders, input purchases, finished goods inventories and employment declined, while order backlogs returned to expansion.

The construction sector moved back into expansion after contracting in the previous month. Growth was recorded in new business, construction activity and input costs, while employment and order backlogs continued to fall.

The services sector, which contributes more than 50 per cent to GDP, marked its 16th consecutive month of expansion, with activity accelerating in January.

New business, overall activity, employment, input costs and order backlogs all posted gains.

"Overall, the latest PMI readings indicate that the economy experienced slower expansion, with weak global supply chain recovery and cautious order placement weighing on manufacturing exports," said Dr M Masrur Reaz, Chairman and Chief Executive Officer of Policy Exchange Bangladesh.

"The agriculture sector also showed signs of slowdown following the late autumn paddy harvests," he added.

However, Dr Reaz noted that continued expansion in the future business index across all key sectors points to sustained optimism in the period ahead, particularly following the elections.

Shares of several politically linked companies drew strong buying interest on the Dhaka Stock Exchange (DSE) yesterday, with Kay & Que (Bangladesh) Limited and three Monno Group firms ranking among the session's top gainers.

Kay & Que topped the gainers' chart, surging 8.74% to close at Tk434 per share.

Market participants attributed the sharp rise to speculative sentiment following the company's chairman, Abdul Awal Mintoo, to contest the 2026 parliamentary election from the Feni-3 constituency.

Mintoo, a former president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and a vice chairman of the BNP, is a prominent figure whose political developments often influence investor interest in his associated firms.

Similarly, Monno Group companies enjoyed a notable rally. Monno Agro Industries advanced 7.11% to close at Tk364.1, while Monno Fabrics gained 6.73% to end at Tk22.2. Monno Ceramics also added 4.12%, finishing the day at Tk83.3 per share.

Investors linked the rally to expectations surrounding Afroza Khan Rita, chairperson of Monno Group of Industries, as a BNP candidate for the Manikganj-3 constituency, prompting short-term traders to build positions amid evolving political developments.

Market analysts, however, cautioned that such rallies are frequently driven by speculation rather than underlying financial fundamentals. They noted that in the run-up to national elections, stocks associated with politically active entrepreneurs often draw significant attention, leading to heightened volatility.

Analysts advised retail investors to focus on valuations and underlying financial performance, warning that politically driven price surges can reverse quickly once speculative heat cools down.