Load-shedding is expected to intensify in the coming days after a unit at Adani Power went offline early yesterday (22 April), slashing electricity imports by almost half and placing additional strain on an already stretched power system grappling with coal shortages and limited gas supply.

According to the Bangladesh Power Development Board (BPDB), a technical fault forced Unit-1 of the Adani Power plant to go offline at 1am yesterday, cutting electricity imports from roughly 1,500MW to 764MW.

The national grid remains under severe pressure as generation continues to fall short of the critical 15,000MW peak demand threshold.

Data from Power Grid Bangladesh shows that power generation reached only 13,198MW against a projected demand of 15,200MW at 1am yesterday.

The nearly 2,000MW deficit – aggravated by rising summer temperatures – mirrors a similar gap recorded last Monday and highlights the system's continuing struggle to stabilise supply.

The outages have disrupted industry and daily life, with rural communities facing the longest blackouts.

Load-shedding varies widely across regions, ranging from around 28% in Gazipur to more than 45% in Savar, while Sylhet is experiencing outages of about 40%. In many areas, electricity is going out several times a day for hours, with rural regions enduring outages lasting seven to ten hours.

BPDB chairman Md Rezaul Karim told The Business Standard the shutdown was caused by a bearing issue linked to the boiler's air preheater.

"Rising vibration in the air preheater bearing prompted the shutdown to prevent further damage," he said.

"Adani has informed us that it may take at least three to four days to bring Unit-1 back online," a BPDB official said.

Data from Power Grid Bangladesh shows that supply from Adani had already fallen to 1,109MW before the shutdown and dropped further to 764MW by 2am as only one unit remained operational.

Yesterday, peak demand during the day was projected at 15,450MW, while generation stood at only 13,112MW, leaving a shortfall of more than 2,338MW.

BPDB officials warned that the disruption in Adani supply could further widen the gap between demand and supply in the coming days.

April-May generation plan under strain

The BPDB had earlier planned to generate more than 17,500MW during April and May to meet peak summer demand. Under that plan, 5,600MW was expected to come from gas, 6,000MW from coal, 1,435MW from Adani Power, 3,500MW from liquid fuel and around 1,000MW through HVDC power imports.

Gas-fired plants – the backbone of Bangladesh's power system – are currently operating far below capacity due to gas shortages.

BPDB data shows gas supply to power plants stood at about 891.6 million cubic feet per day (mmcfd) on 21 April, producing between 4,600MW and 5,000MW of electricity.

Although installed gas-based capacity is around 11,000MW, actual generation rarely exceeds 5,000-5,100MW under current supply conditions.

Officials say that an additional 100-150mmcfd of gas could raise generation close to 6,000MW, but such an increase remains uncertain amid the continuing supply crisis.

Coal plants hit by supply shortage

Coal-fired power generation is also under pressure due to coal shortages. While the earlier plan aimed for 6,000MW from coal plants, actual output has remained far lower, hovering between 4,500MW and 4,600MW.

At 4pm yesterday, electricity generation from coal plants stood at 4,605MW.

The decline in output from the 1,320MW SS Power plant has also complicated efforts to manage load-shedding during the hot and humid days of April. The plant is currently operating below capacity because of a coal shortage, with one unit offline and another producing only about 300MW.

According to BPDB, SS Power is a reliable plant to meet summer demand, but coal shortage forced it to run under capacity. Officials said supply from the plant could improve next week after new coal shipments arrive, expected by Sunday.

One unit of the 1,320MW Patuakhali power plant is also operating below capacity, generating only about 300MW, while the second unit has yet to be commissioned.

Meanwhile, the 1,200MW Matarbari power plant is generating around 900-950MW.

Despite a plan to produce 3,500MW from liquid fuel-based plants, the BPDB has adopted a cautious approach to using furnace oil due to concerns over global fuel supply uncertainties.

Data from Power Grid Bangladesh shows that generation from heavy fuel oil (HFO) plants reached 2,944MW during the evening peak on 13 April.

Other sources and imports

Yesterday, the power generation mix included about 5,096MW from gas, 4,559MW from coal and around 900MW from furnace oil plants, along with smaller contributions from hydro, solar and wind.

Electricity imports included 922MW through HVDC links and 188MW from Tripura, in addition to about 751MW from the Adani plant after the disruption.

BPDB officials warned of a widening power deficit as shortages of gas and coal, coupled with the underutilisation of furnace oil-based plants, strain the grid.

With demand projected to climb in the coming weeks, officials further cautioned that outages could intensify nationwide unless fuel supplies stabilise and the Adani unit is swiftly restored to service.

The US-Israeli war with Iran and the closure of the Strait of Hormuz have caused the biggest oil supply disruption on record by daily output lost, though at least one earlier shock had a greater cumulative impact, according to Reuters calculations based on International Energy Agency and US Department of Energy data.

The IEA said on Tuesday that the conflict is the worst energy crisis the world has faced, when combined with the tail end of the European gas crisis caused ​by Russia's invasion of Ukraine in 2022.

The scale of the disruption has revived comparisons with past energy shocks, from the 1973 Arab oil embargo to the Iranian Revolution and the 1991 Gulf War, while underscoring how ‌much global energy markets have changed.

A DIFFERENT KIND OF ENERGY SHOCK

Unlike earlier crises, the Iran war has simultaneously hit crude, natural gas, refined fuel and fertiliser supplies, exposing new vulnerabilities created by decades of rising demand, deeper global trade links and the Middle East’s expanded role as a supplier of finished fuels.

Earlier energy shocks of the 1970s caused lasting economic damage, weakened governments and remain etched in the memory of citizens in industrialised nations such as the United States, which faced months of fuel supply shortages and queues at the gas pumps.

The IEA was established in the wake of the Arab ​oil embargo to advise industrialised countries on energy supply and security. The IEA also manages its members' emergency oil stocks and has responded to the crisis by releasing a record 400 million barrels from strategic stockpiles to stabilise oil ​prices and offset lost Middle Eastern supply.

HOW DOES THE CURRENT DISRUPTION COMPARE BY SCALE?

The peak supply loss from the current crisis stands at more than 12 million barrels per day, the IEA ⁠said earlier this month. That is equivalent to 11.5 percent of global oil demand, which this year is expected to average around 104.3 million bpd.

The outright daily supply loss is larger than earlier peak supply losses of 4.5 million bpd during the 1973-74 Arab ​oil embargo and of 5.6 million bpd during the Iranian Revolution in 1978-79 combined, the IEA said. It is also higher than the estimated peak supply losses of 4.3 million bpd during the 1991 Gulf War, the IEA said.

The Iran war has also triggered ​the shutdown of roughly a fifth of the world's liquefied natural gas production in Qatar. The world consumes much more gas than it did during the oil shocks of the 1970s-1990s. During the Arab oil embargo and the Iranian Revolution, the LNG industry was nascent. Qatar first exported LNG in 1996.

The current disruption also extends beyond crude and gas into fuel markets. The US-Israeli war on Iran has disrupted millions of barrels per day of fuel production and exports from refineries in the Gulf, triggering shortages of jet fuel and diesel. Huge refineries built inside the Gulf in recent decades ​are key to global fuel supplies. They send jet fuel to Africa, Europe and Asia, for example.

HOW DO DURATION AND LOSSES COMPARE WITH PAST SHOCKS?

The International Energy Agency did not immediately respond to a Reuters request for comment on how the current disruption ​compares with earlier energy shocks in terms of cumulative supply losses.

In the absence of official comparisons, Reuters assessed cumulative losses by calculating the scale and duration of major supply disruptions.

Based on that approach, the current conflict has lasted 52 days and removed an estimated 624 million barrels ‌from the market, ⁠assuming a loss of 12 million barrels per day over that period, according to Reuters calculations.

Even if a peace deal is reached quickly, supply disruptions are expected to persist for months and, in the case of gas, for years, pushing the final cumulative impact significantly higher.

The IEA says the 1978-79 Iranian Revolution resulted in a peak loss of 5.6 million bpd, smaller in scale than the current disruption. The revolution, however, led to a larger cumulative loss, according to Reuters calculations.

According to the US Department of Energy, the revolution caused an average drop of 3.9 million bpd in Iran's crude oil production from 1978 to 1981 - a loss of some 4.27 billion barrels over three years according to Reuters calculations - although the Energy Department says much of this loss was compensated by Iran's Gulf ​neighbours.

During this crisis, the countries with spare capacity - Saudi Arabia, the ​United Arab Emirates - have been unable to compensate - because ⁠they themselves have been hit by the halt in shipments through the Strait of Hormuz.

Oil journalist and author Ian Seymour estimates Iran pumped an average of 3.1 million bpd during 1979 compared to 6 million bpd in late 1978 - resulting in a cumulative loss of over 1 billion barrels in 1979 alone.

During the 1973-1974 Arab oil embargo, producers took three months to reach full production cuts ​of 4.5 million bpd. The embargo lasted from October 1973 to March 1974, resulting in around 530 million to 650 million barrels of lost production, according to Reuters calculations. That ​would mean the Arab oil embargo was ⁠comparable in its cumulative impact to the disruption caused by the US-Israeli war on Iran.

SHORTAGES IN ASIA, AFRICA

The current crisis has played out initially in shortages of supply to Asia and Africa. Top oil consumer the United States was much harder hit by the Arab oil embargo, which led to motorists enduring long lines for gasoline. The disruption lasted months and sparked an overhaul of energy policy and a rethinking of what constituted energy supply security.

The 1991 Gulf War, which disrupted oil output for four months according to a government document from ⁠IEA member Australia, resulted ​in a cumulative loss of at least 516 million barrels according to Reuters calculations assuming losses at 4.3 million bpd over that time, making the ​cumulative losses smaller than the current crisis and the Arab oil embargo.

Russia's invasion of Ukraine in 2022 triggered a global energy crisis as European countries scrambled to reduce their dependence on Russian oil and gas.

Russian oil output declined by 9 percent in April 2022, according to the US Energy Information Administration, or roughly 1 million ​bpd and much smaller than the current disruption. Russia's output stabilised in later months as Moscow rerouted exports to counter Western sanctions, although in 2026 Ukrainian drone attacks are causing output cuts.

Prime Minister Tarique Rahman has said effective initiatives have been taken to introduce the much-anticipated online payment gateway PayPal to create large-scale employment through the expansion of information technology in the country.

He said this in response to a question from treasury bench lawmaker from Natore-4 Md Abdul Aziz in parliament on Wednesday (22 April), with Speaker Hafiz Uddin Ahmed in the chair.

The prime minister informed that a master plan has been adopted to issue identity (ID) cards to 200,000 freelancers over the next five years and to train several thousand youths in advanced technologies.

Tarique said various organizations and departments under the Information and Communication Technology (ICT) Division have undertaken multiple plans and activities aimed at generating employment through the expansion of IT.

He said the Department of ICT will impart training to 1,000 individuals over five years to develop them as freelancers and provide ID cards to 200,000 freelancers during this period.

A total of 7,500 freelancers have already been issued ID cards, and the programme is ongoing, he added.

The prime minister said 2,400 people will be trained in advanced technologies such as artificial intelligence (AI), machine learning (ML), and virtual reality in 2026 through the Bangladesh Hi-Tech Park Authority.

To accelerate investment and employment, 83 services are currently being provided online, with plans to add 10 more services within the next year, he said.

Tarique said a committee has already been formed to ensure the effective operation of hi-tech and software parks and ICT centres, and to take necessary steps for launching PayPal services in Bangladesh.

He said over the next five years, around 1,000 undergraduate and graduate students will receive IT training in 20 batches through the Bangladesh Computer Council (BCC).

Initiatives have also been taken to provide training to 5,020 job-seekers and students in areas such as AI, mobile app development, Python programming, data analytics, and cyber security, including short courses as well as one-year diploma and postgraduate diploma programmes, he mentioned.

The prime minister said initiatives have also been taken to provide basic computer training to about 700 persons with special needs to help them become self-reliant.

Additionally, around 700 women entrepreneurs will receive skills development training under the "Women in ICT Frontier Initiative" to create employment opportunities, he said.

Highlighting ongoing programmes, the prime minister said that under IT training initiatives, 300 students from 15 universities are currently receiving training in the April 2026 session.

He also noted that training has been completed for 40 persons with special needs in basic computer skills and for 20 women entrepreneurs in Wi-Fi-related skills development.

A Norwegian-flagged vessel, Huelva Knutsen, carrying 60,000 tonnes of liquefied natural gas (LNG) from Nigeria, anchored at the FSRU terminal in Moheshkhali this morning (22 April).

Cargo unloading from the vessel began in the afternoon, said Nurul Alam, Deputy General Manager of local shipping agent Uniglobal.

He added that the unloading process may take two to three days to complete.

Meanwhile, the Chattogram Port Authority said another LNG-laden vessel, La Seine, carrying 69,196 tonnes of LNG from the United States, is expected to arrive at Moheshkhali on Friday (24 April).

Earlier, two LNG vessels arrived at Moheshkhali, one from Angola carrying 69,015 tonnes on 18 April, and another from Australia with 64,679 tonnes on 16 April.

India's textile exports increased by 2.1 % from Rs 3,09,859.3 crore in Financial Year 2024–25 to Rs 3,16,334.9 crore in FY 2025–26 with readymade garments being the top contributor, official data released today (22 April) said.

RMG exports rose from Rs 1,35,427.6 crore in 2024-25 to Rs 1,39,349.6 crore in 2025-26, an increase of 2.9%.

Cotton yarn, fabrics, made-ups and handloom products recorded exports of Rs 1,02,399.7 crore in FY 2025–26 as against Rs 1,02,002.8 crore in FY 2024–25, a growth of 0.4%, said the Textile Ministry of India.

Man-made yarn, fabrics and made-ups posted a stronger growth of 3.6%, with exports increasing from Rs 41,196.0 crore to Rs 42,687.8 crore.

Among value-added segments, handicrafts, excluding handmade carpets, recorded the highest growth among major categories, rising by 6.1% from Rs 14,945.5 crore to Rs 15,855.1 crore.

Export growth was registered in more than 120 destinations during April 2025 to February 2026 over the corresponding period of the previous year, indicating broad-based geographical expansion in India's textile export basket.

A notable growth has been observed in markets like the UAE (22.3%), the UK (7.8%), Germany (9.9%), Spain (15.5%), Japan (20.6%), Egypt (38.3%), Nigeria (21.4%), Senegal (54.4%), and Sudan (205.6%).

US stock futures rose and the dollar wavered on Wednesday after President Donald Trump said he would indefinitely extend the Iran ceasefire, keeping sentiment buoyed, although with the Strait of Hormuz still closed, oil prices stayed near $100.

Trump's announcement appeared to be unilateral, and it was not immediately clear whether Iran, or US ally Israel, would agree to extend the ceasefire, which began two weeks ago.

Markets took the latest development in stride as investors weighed the extension with no signs of resumption in talks yet. Iran had rejected a second round of negotiations before Trump's announcement.

S&P futures EScv1 rose 0.4% while Nasdaq futures NQc1 gained 0.5%. European futures STXEc1 eased 0.3% pointing to a subdued open.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.7% after hitting a seven-week top on Tuesday. Japan's Nikkei .N225, South Korea's KOSPI .KS11 and Taiwan stocks .TWII hit record highs on renewed AI wagers.

Thomas Mathews, head of markets for Asia-Pacific at Capital Economics, said the earlier ceasefire was widely seen as indefinite so it was not surprising the latest announcement had not moved markets much.

"Obviously, any news on the re-opening of the Strait is a good candidate for the next big market flashpoint," Mathews added.

Hormuz remains key

After a sharp selloff in March due to the war in the Middle East, markets across the globe have swiftly rebounded this month and are back at pre-war levels as the prospect of a peace deal and the ceasefire spurred a risk-on rally.

That has also left the US dollar, which benefited from safe haven demand in March, on the back foot, giving up most of its war-induced gains.

"It appears markets were right to assume peak war uncertainty is behind us," said Matt Simpson, a senior market analyst at StoneX. "Risk seems likely to remain buoyant and dips viewed favourably by equity bulls. The closure of the Strait of Hormuz is already priced in."

Trump said he would continue the US Navy's blockade of Iran's ports and shores. Tehran has effectively closed the Strait of Hormuz through which one-fifth of the world's energy supply usually flows, causing a global energy shock.

Oil prices swung between gains and losses, with Brent crude futures LCOc1flat at $98.47 per barrel. US West Texas Intermediate crude CLc1 futures slipped 0.25% to $89.45 a barrel. O/R

While oil prices have come down from their March peaks they are still well above pre-war levels, worrying investors that elevated energy prices could quicken inflation and keep global rates higher for longer.

"We expect markets to remain volatile for now given the uncertainty with Hormuz and because the duration and scale of the crisis remain unclear," said Vasu Menon, managing director of investment strategy at OCBC.

Warsh senate appearance

Investors parsed comments from Federal Reserve chief nominee Kevin Warsh as he tried to assure US senators considering his confirmation to lead the central bank that he would act independently of the White House.

Warsh said he had made no promises to Trump about cutting rates and called for a new approach to controlling inflation and a communications overhaul that could discourage his colleagues from saying too much about the direction of monetary policy.

Separately, data on Tuesday showed US retail sales rose more than expected in March as the war with Iran boosted gasoline prices and led to a record surge in receipts at service stations, while tax refunds underpinned spending elsewhere.

Bangladesh is witnessing a steady rise in remittance inflow, offering renewed support to the country's foreign exchange reserves and overall economic stability, officials and analysts observed.

According to data from Bangladesh Bank, the country has maintained a significant upward trajectory in remittance earnings over the last two fiscal years, achieving historic milestones that have surpassed all previous benchmarks.

During the 2023-24 fiscal year, the nation recorded $23.9 billion in inflows. Growth accelerated sharply in FY 2024-25, reaching a record high of $30.3 billion, which represented a year-on-year increase of more than 25 per cent.

The momentum has continued into the current 2025-26 fiscal year, with the July-March period alone bringing in $26.21 billion, compared to $21.79 billion during the same period in the previous year.

Most recently, data from July through April 20 of FY 2025-26 shows that remittance inflows reached $28,426 million, significantly outpacing the $23,666 million collected during the same timeframe last year.

The central bank has attributed the growth to a combination of incentives, stricter monitoring of informal transfer systems, and the gradual recovery of global labour markets.

Economists noted that remittance earnings remain one of the key pillars of Bangladesh's economy, alongside exports. The inflow has helped ease pressure on the balance of payments and stabilise the exchange rate amid ongoing global economic uncertainties.

The government has been encouraging migrant workers to send money through official banking channels by offering a 2.5 per cent cash incentive for sending money through formal channels.

Officials from the Ministry of Expatriates' Welfare and Overseas Employment mentioned that awareness campaigns and digital financial services have also contributed to the increasing trend.

Bangladeshi workers in the Middle East, Europe, and Southeast Asia continue to be the main contributors to remittance inflows. Countries such as Saudi Arabia, the United Arab Emirates, and Malaysia remain among the top sources.

Experts, however, emphasised the need for diversification of overseas job markets and skill development initiatives to sustain long-term growth in remittance earnings.

They also called for further reduction in transaction costs and expansion of mobile financial services to each rural household more effectively.

Renowned economist Dr Zahid Hussain stated that Bangladesh's macroeconomic stability has been restored, albeit modestly, and external indicators like the balance of payments and foreign exchange reserves remain in a comfortable position.

He credited the economy's current stability to the adoption of a flexible exchange rate system.

The economist said that the remittance surge played a crucial role in replenishing reserves, noting that issues faced during the dollar crisis, such as difficulty opening letters of credit (LC) for banks, have already become normal.

The economist, however, urged the government to urgently explore alternative overseas labour markets as the ongoing Middle East conflict threatens to disrupt migration and remittance inflows, a key pillar of the country's economy.

He said Bangladesh's heavy dependence on Gulf countries for overseas employment has created vulnerability, particularly at a time when geopolitical tensions are affecting labour demand, recruitment processes and worker mobility.

"Any prolonged conflict in the Middle East could significantly affect manpower export and remittance inflow. It is now crucial to diversify labour markets to minimise risks," he added.

Bangladesh Bank Executive Director and Spokesperson Arif Hussain Khan said remittance inflows to the country remain stable despite ongoing tensions in the Middle East, although the situation is being closely monitored due to Bangladesh's heavy reliance on migrant workers in the region.

"Remittance inflow has shown a positive trend in recent months, which is helping stabilise the foreign exchange market," he said.

"Remitters now feel encouraged to send their money through formal banking channels instead of the illegal 'Hundi' system, which can help boost the country's foreign exchange reserves," he added.

Foreign exchange reserves, according to Bangladesh Bank data released on 16 April, currently stand at $35.04 billion.

However, when calculated using the International Monetary Fund (IMF) methodology under the Balance of Payments and International Investment Position Manual (BPM6), the reserves total 30.37 billion.

Deputy Managing Director (DMD) of the Dutch-Bangla Bank Limited, Mohammed Shahid Ullah, confirmed that demands for 'Hundi' and 'Hawala'-illegal cross-border money transfer channels-have declined following a crackdown on operators after the political changeover, diverting more remittances through formal banking channels.

He added that the positive effects of the remittance boom are highly visible across Bangladesh, particularly in rural communities that rely heavily on money sent from relatives working abroad.

He noted that remittances have consistently increased since August 2024, providing the interim government with a respite following the rapid depletion of foreign exchange reserves.

Mohammed Shahid Ullah, however, noted that remittance enhances financial inclusion by encouraging recipients to engage with formal banking systems.

"It also supports domestic investment through increased savings and liquidity in the financial sector. In times of global economic stress, remittance has proven more stable compared to foreign direct investment or portfolio flows, thus acting as a buffer against external shock," he added.

Despite progress, he mentioned, there remains substantial scope for further improvement.

"Reducing transaction costs and ensuring near real-time fund transfers (T+0 settlement) would make formal channels more competitive. Expanding banking access in rural areas and strengthening partnerships with international money transfer operators can further streamline inflows," he added.

He described that remittance is not merely a financial inflow; it is the lifeblood of Bangladesh's socio-economic progress.

"It strengthens macroeconomic stability, uplifts millions of households, and fuels sustainable development. While the country has made commendable strides in increasing remittance through formal channels, sustained policy innovation, technological advancement, and global labour market integration will be key to unlocking its full potential in the years ahead," he added.

Bangladesh’s financial system remains overwhelmingly bank-dominated with 765 other financial institutions making only a limited contribution to boosting the economy.

According to a Bangladesh Bank report, the other financial corporations (OFCs) — a broad group that includes non-bank financial institutions, insurance companies, brokerage firms, mutual funds and mobile financial services — together account for just 4.6 per cent of total financial sector assets, compared with 78.1 per cent held by banks.

This imbalance highlights a structural weakness, where alternative financing channels remain underdeveloped despite their large number and potential role.

BB identified 765 other financial institutions operating in the country.

These institutions are expected to complement banks by mobilising long-term funds and supporting capital market activities.

At the end of December 2025, total assets of OFCs stood at Tk 2.02 lakh crore, marking a 13.45 per cent increase from Tk 1.78 lakh crore in the previous year.

While this growth appears significant, it has not translated into stronger support for business investment or industrial expansion.

Instead, the sector’s role in direct financing remains limited.

A closer look at the asset composition explains the issue.

Around 85 per cent of OFC assets are concentrated in claims on other sectors, claims on banks, and claims on the government.

This indicates that a large portion of funds circulates within the financial system or goes into public sector instruments, rather than being channelled into private sector investment.

More concerning is the decline in lending activity.

Loans provided by OFCs dropped by 6.7 per cent year-on-year and 4.35 per cent on a quarterly basis.

This contraction suggests that financial institutions other than banks are reducing their exposure to credit at a time when the economy needs diversified funding sources, especially as banks face rising stress.

The term ‘claims’ in the report refers to financial assets held by institutions, such as loans, deposits, or investments in securities.

A higher share of claims on banks, for example, means OFCs are placing funds with banks instead of lending directly to businesses.

Such behaviour reduces their effectiveness as independent financing channels.

On the liability side, the structure further reflects limited market development.

Equity accounts for about 32 per cent of total liabilities, while insurance and pension-related reserves make up around 23.5 per cent.

These are relatively stable sources of funds, but they are not being fully utilised for long-term investment in the real economy.

The absence of a functioning bond market remains a key constraint.

Debt securities represent only a negligible share of liabilities and showed no meaningful growth over the year.

In most economies, bond markets allow companies and governments to raise long-term funds without relying on banks.

In Bangladesh, this channel remains largely inactive, placing more pressure on the banking system.

Within the OFC sector, life insurance companies hold the largest share of assets at about 25 per cent, followed by other financial institutions and brokerage houses.

Mobile financial services are also expanding, accounting for around 9.6 per cent of total assets, reflecting increased digital transactions.

However, these segments largely facilitate payments or manage savings, rather than providing substantial long-term financing for industry.

The long-term trend shows that OFC assets have more than doubled over the past several years, rising from Tk 92,640 crore in 2018 to over Tk 2 lakh crore in 2025.

However, a significant part of this increase is linked to improved data coverage rather than a fundamental expansion of financing capacity.

The report also highlights gaps in data reporting.

Out of 765 identified institutions, only 525 were included in the final analysis due to incomplete submissions.

The overall picture points to a financial system where banks continue to carry the primary burden of financing both short-term and long-term needs.

This creates asset-liability mismatches, as banks use short-term deposits to fund long-term projects, increasing financial risk.

Non-bank financial institutions have yet to evolve into effective channels for capital mobilisation.

In an interview with Daily Sun, Bangladesh’s commercial counsellor in Germany highlights opportunities in high-value, eco-compliant goods but warns of risks from LDC graduation, compliance pressures and overreliance on garments

A structural shift in German consumer and regulatory preferences toward sustainability is opening a significant export window for Bangladesh, with strong potential in high value-added and environmentally compliant products, according to Ch Md Golam Rabbi, commercial counsellor (deputy secretary) at the Bangladesh Embassy in Berlin.
“Germany, as Europe’s largest economy, is increasingly prioritising environmentally friendly, ethically produced and fully traceable goods. This shift is not temporary, it represents a long-term transformation of the market,” Rabbi said in an exclusive interview with the Daily Sun.
He noted that Bangladesh is well positioned to capitalise on this trend, supported by its growing portfolio of green factories, improved compliance standards and competitive manufacturing base.
The participation of three Bangladeshi companies at Techtextil & Texprocess 2026 at Messe Frankfurt signals a gradual but important shift toward higher-value market engagement.
Rabbi described Germany’s trade fairs as “high-impact commercial ecosystems” that go beyond exhibitions. “These platforms enable exporters to generate qualified leads, engage directly with decision-makers, analyse competitors and position their brands in a highly competitive environment,” he said.
He emphasised that trade fairs serve a dual purpose, as immediate business development tools and long-term strategic investments. Companies can test market responses, launch new products, gather direct buyer feedback and build partnerships across the value chain.
To maximise outcomes, Rabbi advised exporters to adopt a structured approach, including setting clear and measurable targets, scheduling meetings in advance and leveraging digital platforms such as LinkedIn to enhance real-time engagement and visibility.

Germany anchors Bangladesh’s EU exports
The European Union continues to dominate Bangladesh’s export landscape, accounting for nearly half of total exports, which reached $48.28 billion in the 2024-25 fiscal year.
Within the EU, Germany remains the single largest destination. Bangladesh exported approximately US$8.8-9 billion worth of goods to Germany in 2024, with momentum continuing into 2025. Overall exports to the EU stood at around $23.9 billion in 2025, reflecting steady growth.
However, Rabbi cautioned that the export structure remains highly concentrated. “More than 80%-90% of exports to the EU are still readymade garments. While this has been a strength, it also exposes Bangladesh to structural risks,” he said.
With Germany’s demand evolving rapidly, he underscored the need to move beyond volume-driven apparel exports toward diversified, value-added products.
He identified emerging opportunities in light engineering, footwear, leather goods, technical textiles, pharmaceuticals, ICT services and jute-based eco-friendly products.
“European buyers are increasingly shifting toward man-made fibre (MMF), functional textiles and technical applications. Capturing this segment will be critical for future growth,” he added.

LDC graduation: Opportunity with risks
Bangladesh’s graduation from Least Developed Country (LDC) status in 2026 marks a turning point for its export competitiveness in the EU market. Unless the government’s request for deferment is approved, the country is set to graduate in November this year, bringing major changes to market access and tariff benefits.
Rabbi warned that the loss of duty-free, quota-free access under the Everything But Arms (EBA) scheme could lead to “preference erosion,” increasing tariff burdens on Bangladeshi goods.
“To sustain growth, securing GSP Plus status or negotiating free trade agreements will be essential,” he said, noting that competing countries such as Vietnam and India are already advancing through bilateral and regional trade deals.
Beyond tariffs, compliance will become a decisive factor. Exporters will need to align with stringent frameworks such as the EU’s Carbon Border Adjustment Mechanism (CBAM) and Germany’s Supply Chain Due Diligence Act, which require robust environmental, labour and governance standards.
He also pointed to the loss of special treatment under WTO provisions, which could limit policy flexibility and increase pressure on domestic industries.

Compliance, cost and logistics challenges
Rabbi identified compliance as the most immediate and complex challenge.
“EU regulations are evolving rapidly, particularly around sustainability, due diligence and traceability. This requires continuous investment and institutional readiness,” he said.
Other constraints include limited product diversification, slower adaptation to MMF-based production, and inefficiencies in logistics and supply chains. Lead times, port handling capacity and freight costs continue to affect Bangladesh’s competitiveness compared to regional peers.
Additionally, global economic uncertainty and inflationary pressures in Europe are influencing buyer behaviour, leading to cautious sourcing strategies. Rising energy and raw material costs are further compressing exporters’ margins.
He also warned against overdependence on a narrow export base, noting that excessive reliance on a single sector could create long-term systemic vulnerabilities.

Embassy steps up engagement
To address these challenges and leverage emerging opportunities, the Commercial Wing of the Bangladesh Embassy in Berlin has intensified its engagement with the German market.
“Our focus is on building direct linkages between Bangladeshi exporters and European buyers through trade fairs, buyer-seller meetings and continuous engagement with industry associations and retail groups,” Rabbi said.
The embassy is also actively involved in policy advocacy, particularly in areas related to market access, sustainability standards and upcoming EU regulations.
Rabbi concluded that Bangladesh’s future export success in Germany will depend on its ability to align with evolving market dynamics.
“The opportunity is clear. But capturing it will require a strategic shift, toward sustainability, diversification, compliance and value addition. Those who adapt early will be the biggest beneficiaries in the German and broader EU market,” he said.

Foreign buyers are increasingly diverting garment work orders away from Bangladesh over concerns about energy reliability and an uncertain business climate, said Anwar-Ul Alam Chowdhury (Parvez), president of the Bangladesh Chamber of Industries (BCI), yesterday.

“Buyers are telling us that within the next two to three months, Bangladesh may face electricity shortages. Because of that, their top management is discouraging them from placing new orders here,” he said, citing recent communications from international sourcing teams.

He made the remarks at a discussion with senior officials of the National Board of Revenue (NBR) at its headquarters in Dhaka. The NBR organised the meeting as part of its consultation with businesses and other stakeholders ahead of formulating tax proposals for the next fiscal year, 2026-27.

The BCI president said some orders had already been redirected to India and other competing countries, while others were being withheld amid growing uncertainty.

He added that several large buying houses had warned local suppliers of potential disruptions, triggering anxiety across the export-oriented manufacturing sector.

“Orders for July and August, which were expected by now, have either slowed significantly or stopped altogether. We are still in discussions, but in many cases we have not been able to secure the orders,” he said.

Chowdhury cautioned that a further downturn could follow if the situation does not improve.

Beyond energy concerns, he also highlighted the burden of minimum tax on loss-making businesses. Under the current rules, companies must pay a minimum turnover tax of 1 percent even if they incur losses, a provision he said is particularly challenging for small enterprises.

He urged policymakers to introduce a slab-based system for smaller firms and called for clearer safeguards regarding provisions in the Income Tax Act 2023 that allow tax officials to access business systems and financial records for withholding tax verification.

Md Abdur Rahman Khan, chairman of the NBR, along with other officials from both organisations, were present at the meeting.

Singer Bangladesh Ltd reported a loss of Tk55.86 crore in the January-March quarter of 2026, despite posting modest year-on-year revenue growth.

According to its unaudited financials, the company's sales rose by 3.46% to Tk577.20 crore, up from Tk557.86 crore in the same period last year.

However, losses widened significantly from Tk35.89 crore in Q1 2025, reflecting mounting cost pressures and weak market demand.

Commenting on the Q1 financials, the company said that despite a slight increase in turnover, actual sales fell short of expectations due to a stagnant consumer electronics market.

"Domestic sales were stifled by high inflation, geopolitical tensions, and unfavourable weather, while the national election and extended Eid holidays further dampened demand," it said.

Although gross profit margins remained stable, Singer noted that rising costs could not be fully passed on to consumers due to strong price sensitivity in the market.

As a result, operating profit declined by 8.1%, driven by higher expenses related to rent, depreciation and salaries, amid broader economic struggle to balance the operational costs with subdued consumer durables demand.

The company also reported a sharp 41.4% increase in net finance costs, mainly due to nearly 50% higher interest expenses from increased short-term borrowing to support working capital and business expansion.

Additionally, the depreciation of the Bangladeshi taka against the euro led to foreign exchange losses on inter-company loans, the company said.

Sectors across Bangladesh are adjusting rates and restructuring costs in the wake of the government’s record fuel price hike, with freight charges from Chattogram port surging and consumer goods companies shrinking pack sizes and cutting trade margins to stay afloat.

On April 18, the government raised fuel prices to record highs -- diesel by Tk 15 per litre to Tk 115, octane by Tk 20 to Tk 140, petrol by Tk 19 to Tk 135, and kerosene by Tk 18 to Tk 130, with new rates taking effect at midnight.

The hike compounded a crisis that began in early March, when the outbreak of war in Iran pushed global energy prices higher and drove up transport costs before any official revision.

Already reeling from the supply disruptions due to the war, diesel-dependent industries, including agriculture, manufacture and transport, are now facing a double whammy. And in a highly inflated economy, the burden is likely to fall on customers soon.

FREIGHT RATES UP 30%

Transport fares between Chattogram port and destinations across the country have risen 25 to 31 percent since the April 18 hike, with rates remaining volatile for the past one and a half months.

When the Iran war began in early March, covered van fares from the port to Dhaka shot up from Tk 17,000 to a maximum of Tk 32,000. The rates later eased to around Tk 22,000 after Eid-ul-Fitr, only to climb again after the fuel hike.

On Tuesday, Ashis Chakraborty, owner of Chattogram-based clearing and forwarding agency AZ Trade International, hired five covered vans to transport imported fabrics, yarn, and chemicals for Mymensingh-based garment manufacturer PM Textile. It cost him Tk 29,000 per van.

PRAN-RFL Group, which relies on hired vehicles for around 40 percent of its cargo movement between Chattogram and its factories in Ghorashal and Habiganj, is absorbing similar increases.

Kamruzzaman Kamal, the company’s marketing director, told The Daily Star that covered vans now charge Tk 15,000 to carry export goods from Ghorashal to inland container depots in Chattogram -- Tk 3,000 above the previous rate.

Prime movers transporting import containers to the factories now cost up to Tk 42,000, compared to Tk 32,000 before the hike.

MOST MANUFACTURERS HOLD PRICES -- FOR NOW

On the manufacturing side, companies are deploying a range of measures to absorb the cost shock without immediately raising retail prices, though several have signalled that adjustments are becoming harder to avoid.

Many are resorting to shrinking the pack size. This is a classic example of “shrinkflation”-- which occurs when manufacturers shrink the package size, i.e., quantity of an item, without a corresponding price drop.

Tanveer Ahmed Mostafa, director of Meghna Group of Industries, said the severe global energy shock stemming from the Middle East conflict has directly hit the company’s costs from maritime freight to raw material procurement.

In a vertically integrated conglomerate like Meghna, such volatilities inevitably exert pressure on forward consumer outputs, he said, adding that the group is currently absorbing the pressure through internal cost-containment and supply chain optimisation.

“A price adjustment remains a possibility to ensure sustainable supply,” Mostafa said. “We are first exhausting all internal efficiencies.”

“While a price adjustment remains a possibility to ensure sustainable supply,” Mostafa said, for now they are “exhausting all internal efficiencies to keep” products affordable.

PRAN-RFL, a leading food processor and exporter, is holding the same position.

Marketing Director Kamal said, “The company is currently avoiding price increases despite rising fuel costs, as consumers are already under significant financial pressure from higher living expenses.”

Instead, PRAN is reducing trade margins and consolidating deliveries – minimising vehicle numbers, ensuring full-load shipments, and using larger vehicles where possible.

Increasing the maximum retail price, he said, “remains a last resort” and would only be considered if internal cost-control measures fail.

Unilever Bangladesh is also deferring any pricing decision, and is focusing on innovation and operational improvements to absorb costs.

Shamima Akhter, director of corporate affairs, partnerships and communications, said the company is prioritising operational efficiency and cost optimisation over immediate price increases.

Because many of its products are discretionary, she noted, price hikes risk reducing sales volumes.

She noted that global volatility, including higher fuel prices and increased raw material import costs, has already put pressure on production and distribution over the past two months.

Bombay Sweets, however, has moved more decisively. Khurshid Ahmad Farhad, the company’s general manager, said export prices have already been raised by 25 percent starting last month. In the domestic market, the company is adjusting on a product-by-product basis, either raising prices or reducing weights, but not both simultaneously.

Farhad described the April 18 hike as a second shock. Cost pressures had already been building, driven by sharp increases in raw materials, including chemical and petrochemical prices. When the latest price hike came, it pushed packaging costs up by 13 percent to 69 percent.

The company’s “Potato Crackers” product, retailed at Tk 10, has been reduced from 13 grams to 10 grams since the fuel hike. The change is already in the market. Farhad emphasized that increasing maximum retail prices further is difficult due to declining consumer purchasing power, making downsizing a necessary strategy.

“The company is currently prioritising survival over profit,” Farhad said. “Margins have already declined.”

FARMERS FACE A COSTLY HARVEST

The pressure is not limited to industry. Farmers are feeling the pinch during the Boro harvesting season. The surging diesel prices have made it costlier to rent harvesters. For instance, farmers in four haor districts of Sylhet depend on nearly 1,500 combine harvesters, which run on diesel, for bringing their crops home.

In Dingapota Haor in Mohanganj upazila, Netrokona, farmer Tofayel Khan cultivated Boro rice on 80 kathas of land this season, only for floodwater to submerge most of it before harvest.

He had to spend some Tk 660 per katha to harvest the remaining crops. Last season, the rate was Tk 550 per katha. “I am concerned about how to recover my losses.”

An outfit of high-profile global rating-agency Fitch suggests Bangladesh should continue with its high policy rate in lending in the high-inflation regime, ostensibly nay-saying pleas for rate cut.

"We now expect the Bangladesh Bank to maintain its policy rate at 10 per cent over FY2026/27 instead of cutting the rate," says a BMI report, available Wednesday.

Business Monitor International or BMI is a Fitch Solutions company that provides macroeconomic, industry, and financial market analysis globally.Banking sector news

The subsidiary of the American-British credit-rating agency, Fitch, makes such suggestion in view of high projected inflation, recent decline in long-term-borrowing costs, and renewed need for International Monetary Fund financing.

"This is a revised outlook from our previous projection of a rate cut during the new fiscal year. The revision comes despite BB Governor Mostqaur Rahman's reported preference for lower interest rates."

The agency says their new forecast primarily reflects Bangladesh's present economic circumstances, as they expect headline inflation will remain above the central bank's 6.5-percent target over FY2026/27, "hitting a high of 8.6 per cent".

"This is partly due to base effects created by low food-price inflation during H1 FY2025/26."

The Fitch outfit also expects the Iran conflict to contribute 0.13- percentage points towards headline inflation for the coming fiscal year through higher energy prices.

"Elevated inflation threatens the BB's price-stability mission, making a rate cut in FY2026/27 difficult to justify," it opines.

The report mentions that surging inflation in recent years has also eroded real wages in Bangladesh.

"This was particularly pronounced for industry-sector workers, which comprise 21 per cent of the economy's labour force. Although the salary declines slowed in 2025, this comes atop five consecutive years of falling real wages."Global economy analysis

It predicts that an uncontrolled supply-side shock to inflation will worsen this problem.

"This factor will make the BB even more cautious about cutting rates, which could cause inflation to run unchecked."

Falling long-term borrowing costs presents another reason for keeping the policy rate high.

The 10-year treasury yield has trended down since January 2025, despite the policy rate's elevated level. Over the same period, credit growth surged, driven by greater government lending.

"Apart from fuelling inflation, looser credit could also hasten financial flows towards lower-quality investments. This effect is probable given the fragility of Bangladesh's banking sector," the agency cautions.

Finally, it mentions, Bangladesh's government is seeking US$3.0 billion in financial support from the International Monetary Fund (IMF) and the World Bank.

"The government's spending needs are real. Aside from cushioning the blow of the Iran conflict on Bangladeshi households, Dhaka will probably have to recapitalise several banks as it reforms the financial sector."

However, IMF support is likely to be contingent on the government preserving a degree of macroeconomic stability.Bangladesh market report

Keeping monetary policy tight when economic conditions support such a move would preserve confidence among international investors over Bangladesh's medium-term prospects.

The government has secured sufficient fuel supply to meet demand in May, with preparations underway for June and July, State Minister for Power, Energy and Mineral Resources Anindya Islam Amit said today (22 April).

He made the remarks in parliament while responding to an urgent public importance notice raised by Jamaat-e-Islami Ameer Shafiqur Rahman on addressing the "ongoing energy crisis" and reducing public suffering.

Highlighting stock, distribution and global situation, the state minister said fuel prices in the global market have increased by an average of 186.59% since the start of the Iran war.

Despite intense pressure for price adjustments, he said the government refrained from raising fuel prices during the peak boro irrigation season. "After irrigation demand eased, prices were adjusted, and even then, the increase was lower than in neighbouring countries," he added.

He also said the government remains open to constructive proposals. "If the opposition or any party has a clear plan to resolve the fuel crisis, the government is willing to consider it."

Opposition lawmakers also took part in the discussion on the proposal.

Bangladesh’s economy is facing renewed pressure from global geopolitical tensions and commodity market disruptions, with risks of elevated inflation, slower growth and mounting fiscal strain, according to Eric Robertsen, global head of research and chief strategist at Standard Chartered.

In an interview with The Daily Star, Robertsen said financial markets appear “overly optimistic” about a swift resolution of the ongoing Gulf tensions and the reopening of the Strait of Hormuz, a critical artery for global energy supplies.

If shipping resumes soon, it could take weeks or months for oil, gas and petrochemical supply chains to normalise, prolonging price pressures worldwide, Eric Robertsen said
He added that even if shipping resumes soon, it could take weeks or months for oil, gas and petrochemical supply chains to normalise, prolonging price pressures worldwide.

“Even when the Strait reopens, it will take time for exports to normalise and for supply chains to stabilise,” he said, adding that such shocks typically leave behind persistent economic damage across vulnerable economies.

He explained that governments tend to follow a predictable policy response during commodity crises, starting with subsidies to cushion consumers and businesses, followed by price caps, rationing and, in some cases, more aggressive interventions.

“What we have seen in this crisis is that many economies, particularly in Asia, have moved through all these steps very quickly,” he said, adding that such measures come at a high fiscal cost.

“There will be a negative impact on fiscal balances as governments step in to support their economies,” he added.

Robertsen also flagged rising risks of stagflation -- a combination of high inflation and weak growth, particularly for emerging economies like Bangladesh.

“The inflation impact is immediate in a commodity shock, but the hit to growth comes with a lag,” he said.

Bangladesh has been witnessing persistently high inflation for the last three years.

“Higher energy prices reduce disposable income and investment capacity, which ultimately weakens demand,” Robertsen said.

He cautioned that central banks face a difficult balancing act in such an environment.

“If policy tightening happens too early or too aggressively, it could worsen the growth outlook,” he said.

However, he noted a key relief factor in the current crisis: the absence of a sharp appreciation of the US dollar.

“This has not turned into a currency crisis, which is extraordinarily good news for central banks,” he said.

About the global outlook, Robertsen highlighted four key risks for emerging economies: higher inflation, weaker growth, potential policy missteps and deteriorating fiscal balances.

“For the next two quarters, there is a need to build a higher risk premium into both market expectations and economic forecasts,” he said.

He also pointed to a longer-term structural shift in the global economy.

“We are moving into a world where control over commodities becomes both an economic and geopolitical tool,” he said, citing recent examples of export restrictions on energy products and critical inputs.

“One of the key lessons is the importance of maintaining strategic reserves of oil and gas,” he said. “Many countries have learned the hard way that they were underprepared.”

As a result, he expects global energy prices to remain structurally higher even after the current crisis subsides.

Naser Ezaz Bijoy, the chief executive officer of Standard Chartered Bangladesh, said in the same interview that Bangladesh’s ongoing economic challenges have been building over several years.

“Bangladesh’s current challenges did not begin with the war. They started during Covid-19, followed by the Russia-Ukraine conflict, which created foreign currency pressures,” he said.

“There was a strong expectation that after the political transition, investment would pick up and economic activity would accelerate,” Bijoy said. “However, fresh external disruptions have continued to weigh on the outlook.”

He stressed that limited fiscal capacity remains a core constraint.

“Our tax-to-GDP ratio is weak, and revenue collection has been consistently low,” he said, warning that this leaves the country with less room to respond to shocks.

Government decisions to adjust administered prices, particularly in energy, are also adding to cost pressures.

“The government initially deferred price adjustments due to political sensitivities, but ultimately had little choice but to implement them,” he said, adding that such measures would inevitably affect both inflation and the cost of doing business.

At the same time, he emphasised that ensuring an uninterrupted energy supply is more critical than keeping prices low.

Bijoy also pointed to setbacks in external financing discussions. “The IMF negotiations did not progress as expected, which is another hurdle,” he said, adding that the issue would require high-level policy attention.

On the external sector, Bijoy said export performance has weakened in recent months, particularly in Europe.

“The decline in exports began around August,” he said, attributing it to softer demand, higher costs and intensifying competition from countries such as China and India.

Buyers are also changing sourcing strategies.

“They are increasingly diversifying and consolidating orders with larger suppliers who are better equipped to meet sustainability standards and manage risks,” he said.

Despite the slowdown, Bijoy does not foresee a sharp downturn. “We are seeing a modest dip in exports, around 4.5 percent, which may reach 5 to 5.5 percent. It is not a catastrophic situation,” he said.

Bangladesh’s garment industry does not have overproduction capacity that could harm the American manufacturing sector and is free from forced labour, as exporters comply with internationally recognised labour laws, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

The association made the remarks in a position paper submitted to the commerce ministry as the government prepares to attend a hearing of an investigation launched by the United States Trade Representative (USTR) on April 29.

The probe covers alleged overproduction capacity and forced labour in 60 countries, including Bangladesh.

Responding to the USTR’s “structural excess capacity” or “overproduction” concerns, the BGMEA said the terms do not have a universally accepted definition or measurable benchmark.

It argued that in a market-driven economy, production levels constantly adjust to shifts in demand, input costs and supply chain conditions. Determining “excess capacity” without clear parameters or methodology is a major challenge.

The association added that Bangladesh’s apparel sector has not expanded suddenly or in a way that would indicate structural excess capacity. The industry’s growth should be viewed over the long-term.

Over the past decade, the sector has followed a steady growth path, it said, driven by global demand and changing sourcing strategies rather than policy-induced expansion.

After more than four decades of development, Bangladesh exported garment products worth $39.3 billion in fiscal year 2024-25, accounting for nearly 7 percent of the global apparel market. It is now the world’s second-largest garment exporter after China.

In 2025, Bangladesh accounted for 10.73 percent of US apparel imports by volume and 10.53 percent by value, according to the American Apparel and Footwear Association (AAFA).

The BGMEA said the dominance of the sector in national exports shows structural constraints in economic diversification and reliance on a single industry, rather than excessive industrial capacity.

It added that the concentration of resources in apparel should be seen as part of a development pathway, not as evidence of overcapacity.

From a US perspective, the association said Bangladesh primarily exports labour-intensive, low to mid-priced apparel that is not produced in the US in significant volumes. In domestic production, the US focuses on advanced manufacturing and heavy industries rather than basic clothing items such as T-shirts and casual wear.

As a result, such imports do not adversely impact US manufacturing, but instead support consumers by providing affordable clothing, particularly for low and middle-income households, it added.

The BGMEA said Bangladesh’s role in the global apparel value chain complements the US economy.

It also said the government provides policy support, including cash incentives, to offset structural disadvantages such as inadequate infrastructure, longer lead times and limited backward linkage industries.

These factors add an additional seven to ten days of transit time and increase logistics costs, conditions that are not faced by competitors such as China, India and Vietnam.

On allegations of forced labour, the BGMEA said Bangladesh maintains a firm and unequivocal position that there is no forced labour in its export-oriented garment sector.

It said the industry operates under a strong legal and institutional framework that ensures compliance with national labour laws and internationally recognised standards.

Citing the official US Customs and Border Protection (CBP) dashboard, the BGMEA said 55 Withhold Release Orders (WROs) are currently active across all industries.

A WRO is a command by US Customs to stop, and hold imported goods at the border if they are suspected of being made with forced labour. A thorough review of the database confirms that there is no instance of any WRO issued against Bangladesh.

Commercial banks' borrowing appetite continues to fall amid a squeeze in credit demand in the face of persisting economic sluggishness in recent months.Economy news updates

Apart from the private sector's lower credit demand, the Bangladesh Bank (BB) keeps injecting liquidity in the form of buying US dollars from the market to keep the exchange rate stable, which further cut commercial lenders' borrowing appetite, according to money market experts.

It ultimately helps banks, which often go for borrowing either from the interbank market or the central bank to meet their requirements, lessen their liquidity appetite and borrowing by overcoming the demand-supply mismatch.

According to the latest Bangladesh Bank data, the monthly volume of call-money transactions, through which banks make short-term borrowing within themselves, dropped to Tk 945 billion in March from Tk 1.47 trillion and Tk 1.06 trillion recorded in September and December last year, respectively.

The central bank repo is another major instrument through which banks can borrow funds from the regulator.

The data shows commercial banks altogether borrowed Tk 1.55 trillion in July last year, but monthly borrowing dropped to Tk 996 billion in September and Tk 1.08 trillion in December.

This further dropped to Tk 986 billion in March 2026.Bangladesh market report

On the other hand, through the special liquidity facility, under which there are seven borrowing windows like assured liquidity support (ALS), assured repo (AR), and Islamic Banks Liquidity Facility (IBLF), banks overall borrowed Tk 1.43 trillion from the central bank in July last year.

The monthly borrowing volume declined to Tk 603 billion and Tk 383 billion in September last year and March this year, respectively.

Seeking anonymity, a central bank official says the banking regulator kept purchasing US dollars from banks since July 13 last year to stabilise the taka-dollar exchange.

Under such forex-market intervention, the central bank has so far bought $5.68 billion from the market and injected more than Tk 650 billion into banks, he says.

"This intervention plays a major role in commercial banks' plummeting borrowing trend," he says.

In fact, he says, commercial banks now park their surplus liquidity in the central bank's deposit instrument called Standing Liquidity Facility (SDF) significantly despite lower gains at the rate of 7.50 per cent, while the call money rate is around 10 per cent.

According to the central bank data, the monthly volume of fund banks deposited in the SDF increased to Tk 578 billion in March from last December's count of Tk 424 billion.

Managing Director and Chief Executive Officer of Mutual Trust Bank Syed Mahbubur Rahman says the private sector's credit demand keeps plummeting, reaching 6.03 per cent by the end of February 2026.

He says industrial units are facing difficulties in their operation due to various factors like the energy crisis and the recent crisis in the Gulf countries worsened the situation further.

"So, the investment avenues of banks kept shrinking in recent months. That is why their borrowing appetite continues to drop," the experienced banker adds.

Picture a garment factory in Ashulia on a Tuesday morning. Machines hum, deadlines loom, and a buyer waits on a shipment. Then the power cuts out. The generator kicks in. Diesel is expensive and polluting. The factory absorbs the cost and carries on. This is not a crisis. This is Tuesday. Bangladesh’s energy crisis is the “common cold” of the RMG sector: chronic, underestimated and quietly debilitating. Painful, yet rarely dramatic enough to force action. The prescription is known, and the reforms are within reach, but the cost of inaction is no longer theoretical. What was once a logistical headache has become an existential threat.

On the factory floor, reality is harsher. Chronic gas shortages idle machines, delay shipments and raise costs. Global buyers are asking tougher questions about carbon footprints. With only 5.24 percent of installed capacity coming from renewables, we are not merely missing targets; we are risking competitiveness in a market that rewards reliability and sustainability. The country aims to generate 40 percent of its electricity from clean sources by 2041. Yet, of 32,345 MW total capacity, renewables account for just 1,695 MW. In more than a decade, the renewable share has risen by barely 3 percent, while investment has continued to favour fossil fuels. The energy mix is also unbalanced. About 82.7 percent of renewable capacity comes from solar, with minimal contributions from wind and hydro. Limited diversification leaves the grid exposed to supply and price shocks.

Industry is already paying the price. Gas shortages, often exceeding 1,300 MMCFD, mean factories receive well below the required fuel. To keep production lines running, many rely on diesel generators. That raises costs and erodes margins already squeezed by currency depreciation and global price competition. Energy insecurity is making Bangladeshi goods more expensive, precisely when buyers demand lower prices. The greater risk lies in compliance. The EU, our largest export market, is tightening environmental standards. Buyers increasingly link orders to carbon intensity.

Waiting until 2030 is not an option. Four shifts are urgent. First, enable private power. A Merchant Power Plant framework should allow producers to sell directly to large industries at market rates. The policy must be bankable and free of excessive open access tariffs. RMG hubs should be able to sign long-term power purchase agreements with solar and wind developers. Second, modernise the grid. The transmission and distribution network was not designed for variable renewable generation. Scaling up clean energy requires smart grid investment, faster net metering rollout and a clear modernisation roadmap with financing and timelines.

Third, remove fiscal barriers. The FY2025-26 budget cut import duties on solar panels and inverters to 1 percent, but mounting structures still face duties of 58.6 percent and battery storage remains heavily taxed. Duty relief must extend to all essential components so that fiscal policy aligns with national energy goals. Fourth, mobilise green finance. Bangladesh needs up to $980 million annually until 2030 to meet renewable targets, several times the current annual investment of $238 million. The Tk 200 crore single borrower cap under the Green Transformation Fund is too small for utility-scale projects. Developing a liquid green bond market and securing risk guarantees from development partners would help attract investment at scale.

The textile and RMG sectors must be central to energy policy. Policies detached from factory realities will fail. The priority must shift from announcements to implementation. Renewable energy is no longer a distant aspiration or a branding exercise. It is an industrial necessity. If we do not accelerate the transition now, we risk leaving our most vital sector behind as global trade shifts towards low-carbon production.

The writer is a former director of BGMEA and additional managing director at Denim Expert Ltd

Despite official assurances of adequate fuel stocks, underpinned by Bangladesh Petroleum Corporation (BPC) data, long queues and intermittent supply disruptions continued at filling stations across the country yesterday.

While analysts and experts have proposed measures such as an odd-even rationing system and digital tracking to manage demand and ease pressure on pumps, proposals remain sidelined, leaving motorists to endure hours-long waits and sporadic "no fuel" notices.

In response to the strain, the BPC has announced a 10-20% increase in supply of diesel, petrol and octane, with 13,048 tonnes of diesel, 1,422 tonnes of octane and 1,511 tonnes of petrol being distributed daily through three state-run marketing companies. However, the retail situation has yet to stabilise.

On the ground, the supply boost has not fully translated into availability at pumps. While waiting times have eased slightly in parts of Dhaka and Chattogram, motorists across much of the country continue to face delays and uncertainty.

Imports and stock data show no shortage

According to port and BPC sources, between 28 February and 21 April, 823,170 tonnes of fuel arrived at Chattogram port in 26 shipments.

Of this, 624,452 tonnes came as diesel in 16 vessels, 124,087 tonnes furnace oil in six, 53,364 tonnes octane in two, and 21,266 tonnes jet fuel in two. A Singapore-flagged vessel, Hafnia Cheeta, carrying 32,000 tonnes of diesel from Malaysia, docked yesterday around noon.

Based on an average daily demand of 12,500 tonnes, diesel imports over 53 days could meet around 50 days of demand. With a 12-day opening stock in early March, total availability should have covered about 65 days, indicating no supply shortage.

For octane, the country had an 18-day stock at the start of March. Imports of 53,364 tonnes, against a daily demand of 1,200 tonnes, add 45 days of supply. Local refineries produce around 700 tonnes daily, adding roughly 37,000 tonnes or 30 days' supply. Combined, availability reaches about 93 days.

Despite these figures, retail-level disruptions have continued.

Mismanagement, panic and weak oversight

The strain began between 28 February and 6 March, when over 175,000 tonnes of fuel were sold in just seven days – more than double normal demand – rapidly depleting reserves. In response, authorities introduced rationing measures, after which long queues formed across fuel stations nationwide. Many motorists were forced to wait for hours and often returned without fuel.

According to Bangladesh Petroleum Corporation (BPC) and port sources, 26 vessels carrying 823,170 tonnes of fuel arrived at Chattogram between 28 February and 21 April. Of this, 624,452 tonnes were diesel, alongside furnace oil, octane and jet fuel shipments. BPC data show that, in theory, the combined stock and imports were sufficient to meet demand for extended periods.

Despite this, retail disruptions persisted, with officials announcing a 10–20% increase in daily fuel distribution to ease shortages. Yet filling stations continued to report uneven supply, shortened operating hours and "no fuel" notices.

Analysts attribute the crisis to distribution failures rather than supply shortages. They cite irregular withdrawals in early March, panic buying triggered by expectations of price hikes, and weak monitoring across depots and stations as key factors. Some fuel was reportedly hoarded, while portions may have been smuggled due to price gaps with neighbouring countries.

Former Eastern Refinery general manager Monjare Khorshed Alam said early excess demand was not contained. "If the excessive fuel supply during the first week had been controlled, the crisis would not have become so severe," he said, adding that expectations of price hikes encouraged stockpiling.

Energy expert Professor M Tamim pointed to gaps in monitoring and the absence of tracking systems, which allowed irregularities in distribution. He also criticised early signals of price increases, saying they intensified hoarding behaviour.

Experts suggest that tools such as app-based fuel tracking and odd-even number plate rationing could have helped stabilise supply and reduce congestion at pumps.

Assistant US Trade Representative (USTR) Brendan Lynch for South and Central Asia will visit Bangladesh soon, US Ambassador to Bangladesh Brent T Christensen said today.

The ambassador shared the information during a meeting with Commerce Minister Khandakar Abdul Muktadir at the commerce ministry’s secretariat office in Dhaka.

Trade experts believe the USTR may discuss various trade-related issues during the visit, as Bangladesh and the USA signed the Agreement on Reciprocal Trade on February 9 this year.

He comes to Bangladesh months after the USTR began investigations into production overcapacity in different sectors across 60 countries, including Bangladesh, and into forced labour practices.

In today’s meeting, various aspects of strengthening bilateral trade, investment, and economic cooperation between Bangladesh and the United States were discussed, according to a statement from the commerce ministry.

The US ambassador noted that expanding bilateral trade would be beneficial for both countries.

The commerce minister said his ministry, along with other relevant ministries, is working on formulating the new Import Policy Order. He expressed hope that the draft of the Import Policy Order 2026 would soon be shared with the business community for feedback.

Both sides expressed interest in further expanding cooperation in trade, investment, and policy matters, the statement read.