[🇧🇩] Monitoring Bangladesh's Economy

[Saif]

Bangladesh reserves climb after IMF loan disbursement

Bangladesh has received $1.34 billion in two installments from the ongoing USD 4.7 billion loan programme with the International Monetary Fund (IMF). The funds were deposited into Bangladesh’s account on 26 June. As a result, the country’s total foreign currency reserves surpassed $30 billion...

en.prothomalo.com

Bangladesh reserves climb after IMF loan disbursement

Staff Correspondent Dhaka
Published: 28 Jun 2025, 21: 16

IMF logo File photo

Bangladesh has received $1.34 billion in two installments from the ongoing USD 4.7 billion loan programme with the International Monetary Fund (IMF).

The funds were deposited into Bangladesh’s account on 26 June. As a result, the country’s total foreign currency reserves surpassed $30 billion at the end of the day last Thursday. On that day, the reserves stood at $30.51 billion.

However, according to the IMF’s Balance of Payments Manual (BPM-6) accounting method, the reserves amount to $25.51 billion. The amount of usable reserves stands at $19.80 billion.

Sources at Bangladesh Bank confirmed this.

Remittances through legal channels have increased during the interim government period. This rise in remittances has brought relief to the foreign exchange market, easing the pressure on foreign currency reserves.

The central bank has not sold any dollars from the reserves for the past ten months.

Meanwhile, more than $5 billion in loans have entered the country, including for banking and revenue sector reforms, budget support, and other loans. These inflows have contributed to the rise in foreign currency reserves.

Additionally, $420 million in loans from Japan were received and added to the reserves yesterday, Friday. Considering the country’s debt repayment capacity, the IMF will provide an additional $900 million in loans.

Moreover, another $1 billion in loans is expected this month from the World Bank, the Asian Infrastructure Investment Bank (AIIB), Japan, and the OPEC Fund.

This will be added to the reserves by the end of the month. Officials at the central bank believe that the total reserves will reach $32 billion by the end of the current month.

Meanwhile, in the fiscal year 2023–24, remittances totaled $23.91 billion. In the current fiscal year 2024–25, remittances have already reached $29.46 billion as of last week—an increase of nearly $6 billion.

In addition, export earnings have grown by 9 per cent. Although imports have increased by about 5 per cent, the foreign currency reserves are still rising.

As of 31 July 2024—the end of the last Awami League government—the total reserves were $25.92 billion. At that time, the BPM-6 method showed reserves of $20.48 billion.​

 

[Saif]

Lukewarm sale of savings certificates

The government's reliance on domestic and foreign borrowing to bridge its budget deficits is endemic. A significant portion of the domestic borrowing traditionally comes from the banking sector and through the sale of national savings certificates (NSCs). The sale of NSCs, however, has been steadil

thefinancialexpress.com.bd

Lukewarm sale of savings certificates

Published :
Jun 29, 2025 21:54
Updated :
Jun 29, 2025 21:54

The government's reliance on domestic and foreign borrowing to bridge its budget deficits is endemic. A significant portion of the domestic borrowing traditionally comes from the banking sector and through the sale of national savings certificates (NSCs). The sale of NSCs, however, has been steadily declining over the last couple of years, leaving the government's loan target from this source unmet. As a result, increased reliance on bank borrowing is squeezing capital availability for the private sector. Interest rates on savings certificates were raised in January to make them more attractive, yet net sales of NSCs have remained negative. According to central bank data, during the July-April period of FY25, net sales of savings certificates went negative at Tk 74.31 billion, with encashment outpacing fresh investments. The reason for the slump is not hard to fathom. Inflation, economic slowdown and declining purchasing power has made savings in long-term government instruments a luxury many cannot afford. Low and middle-income families are, in fact, delving into their savings simply to stay afloat.

All this is further compounded by the procedural complexity surrounding the purchase of savings certificates. The requirement to submit proof of filing income tax returns for purchases above Tk 0.5 million has become a significant drawback for investors in NSCs. While the intent behind the rule to prevent tax dodging by wealthy individuals is understandable, its implementation has inadvertently penalised lower- and middle-income families. Many of them are forced to file tax returns simply to qualify for savings certificates, even if they have no taxable income. The lack of user-friendly mechanisms for return filing has only worsened the situation, apparently demotivating many from investing in NSCs. Thus, even after the marginal hike in interest rates, the competitiveness of NSCs compared to products offered by banks and non-bank financial institutions is in question. Moreover, unlike NSCs, these alternatives are often short-term and offer greater flexibility in both purchase and encashment.

These are the structural flaws that the government must iron out as it seeks to make the NSCs more attractive. Of late, the Ministry of Finance has tasked the Directorate of National Savings with identifying the causes behind the slump in sale of NSCs and take up corrective measures. The decision to investigate the causes behind declining investments in NSCs is welcome. As noted, simplifying the purchasing process, easing unnecessary conditions such as mandatory tax return submission and ensuring competitive returns would go a long way towards making NSCs a popular investment tool once again.

Moreover, allowing savings certificates to be used as loan collateral could make a significant difference. At present, many investors are forced to encash their NSCs to meet family emergencies. If they had the option to secure bank loans against their sanchaypatras, many would not have gone for premature encashment. Banks offer loans against fixed deposit receipts (FDRs), so why not against NSCs? This is a glaring inconsistency. Given that NSCs are backed by a sovereign guarantee, it is entirely reasonable to permit their use as collateral under clearly defined conditions. So, allowing NSCs to be used as loan collateral, similar to bank FDRs, would provide the much-needed flexibility for investors facing emergencies.​

 

[Saif]

Remittance crosses $30 billion on June 28, setting new record

Bangladesh reached a historic milestone on June 28, with remittance inflows surpassing US$30 billion, breaking all previous records. According to the Bangladesh Bank, from July 1, 2024, to June 28, 2025, the expatriates sent $30.04 billion in remittances. In the previous FY2023- 24, the expatriate

thefinancialexpress.com.bd

Remittance crosses $30 billion on June 28, setting new record

UNB
Published :
Jun 29, 2025 19:40
Updated :
Jun 29, 2025 19:49

Bangladesh reached a historic milestone on June 28, with remittance inflows surpassing US$30 billion, breaking all previous records.

According to the Bangladesh Bank, from July 1, 2024, to June 28, 2025, the expatriates sent $30.04 billion in remittances. In the previous FY2023- 24, the expatriates sent 23.28 billion in remittances.

Accordingly, inward remittance grew by 26.5 per cent in the current fiscal yea,r FY2024-25.

The expatriates sent $2.53 billion in remittances in 28 days of the current month (June), which was $2.37 billion in the previous year. In the FY2024-25, the remittance crossed $30 billion, remaining two days of the fiscal year.

Earlier this month, Bangladesh Bank Governor Dr Ahsan H Mansur expressed satisfaction over the flow of remittances earned.

He then claimed that remittance inflow will reach $30 billion in the FY2024- 25, as people's trust in the country's financial system is restored.

The expatriates sent $27.5 billion remittances in 11 months (July-May) of the current FY2024- 25. Except for July 2024, the remittance crossed $2 billion so far. The scenery of 11 months remittance is as follows-

May $2.97 billion

April: $2.75 billion

March: $3.29 billion

February: $2.53 billion.

January: $2.19 billion

December: $2.64 billion

November $2.2 billion

October: $2.39 billion

September: $2.4 billion

August: $2.22 billion

In July: $1.91 billion​

 

[Saif]

IMF expects FDI inflows as polls timeline firms up

The International Monetary Fund has expressed optimism that foreign investment into Bangladesh will begin to flow again as the country’s election timeline has removed a key source of uncertainty for investors.

www.thedailystar.net

IMF expects FDI inflows as polls timeline firms up

Photo: REUTERS/FILE

The International Monetary Fund has expressed optimism that foreign investment into Bangladesh will begin to flow again as the country's election timeline has removed a key source of uncertainty for investors.

"With the elections now being firmed, we believe that the investments will start coming in. This is very important for Bangladesh because it has one of the lowest foreign direct investments in the world," said Chris Papageorgiou, IMF mission chief for Bangladesh.

Papageorgiou made the remarks during an online briefing on the progress of Bangladesh's loan programme with the IMF yesterday, noting that foreign direct investment had slowed considerably in recent months amid concerns over political uncertainty and governance transitions.

"There was an investment summit when we were on mission, and there was a lot of interest in investing in Bangladesh," he said. "But there was this uncertainty of how elections go, how the transition to elections goes."

The IMF, he said, does not take political positions, but said in its staff report that investment decisions, especially from external sources, are sensitive to the timing and perceived credibility of elections.

The IMF believes that with the electoral timeline now firmed, Bangladesh may begin to unlock greater volumes of capital inflows, a much-needed boost for an economy seeking to graduate from least-developed country status and recover from recent economic and political turbulence.

Papageorgiou's comments come against the backdrop of a broader IMF-backed reform programme for Bangladesh. The original loan package, approved in 2023, totalled $4.7 billion. Following the augmentation approved on June 23, the total size of the programme has increased by $800 million to $5.5 billion. Of this, $3.31 billion has been disbursed so far.


In its latest assessment, the IMF cited "broadly satisfactory" performance despite considerable headwinds, including political instability, rising trade barriers, and financial sector stress in the wake of the 2024 popular uprising that unseated the previous government.

LONG ROAD AHEAD

While the investment outlook appears to be improving, Papageorgiou was less upbeat about revenue performance, describing it as "not very encouraging" so far under the IMF-supported programme.

"We have been having targets since the beginning of the programme, and if you look at the performance, it has not been very encouraging," he said. "The authorities are making efforts. Some of these efforts come short."

Each programme review has resulted in new corrective actions aimed at rebuilding momentum. "What we have in mind is always something that is ambitious in terms of a target, but always achievable."

Bangladesh is currently "at a critical juncture", Papageorgiou said, citing both economic and geopolitical headwinds. Still, the IMF believes the revenue targets are within reach, particularly on the VAT and income tax sides, given renewed commitments from the authorities.

He acknowledged the structural nature of the challenge. "This is really an issue that goes back decades. And we really try to turn the corner there, and that is challenging and we recognise this."

To support long-term reforms, the IMF and the World Bank have launched a joint revenue mobilisation initiative built around key pillars, including policy measures and structural changes such as separating tax policy from administration, Papageorgiou said.

He added that if revenue targets are missed, the IMF will continue engaging with the government. "We have to sit together again, look through corrective actions that the authorities have to take for the next review. We look at what are the issues, how can we resolve the issues, so that we can build on this positive momentum."​

 

[Saif]

https://thefinancialexpress.com.bd/economy/credit-card-usage-abroad-by-bangladeshis-up-295pc-in-apr

Credit card usage abroad by Bangladeshis up 29.5pc in Apr
Domestic spending thru' the plastic money drops by nearly 20pc

SAJIBUR RAHMAN
Published :
Jul 01, 2025 00:06
Updated :
Jul 01, 2025 00:06

Usage of credit cards abroad by Bangladeshi nationals jumped by nearly 29.5 per cent while their domestic utilisation dropped by nearly 20 per cent in April 2025 over the previous month, according to the latest Bangladesh Bank (BB) data.

The central bank in a report attributed such fall in the domestic spending through credit cards to the post-Eid festival impact.

Transactions through the plastic money within Bangladesh dropped by 19.68 per cent to over Tk 30.16 billion in last April, down from Tk 37.55 billion in March.

In contrast, the spending through international credit cards outside the country reached Tk 4.67 billion in April this year, the central bank data revealed.

On the other hand, spending through foreign-issued cards within Bangladesh rose slightly by 2.31 per cent to over Tk 2.62 billion in the same months in comparison with the previous month.

Domestically, credit cards usage showed an overall upward trend during April, 2024 to April, 2025, according to the BB data.

Spending by foreign nationals through credit cards within Bangladesh saw a sharp decline between June and October, 2024 it increased further steadily in December, 2024 to February, 2025.

However, the utilisation of the plastic money by the foreign nationals saw a slight decrease in March, 2025 and further it increased in April, 2025.

According to the BB data, Bangladeshi cardholders conducted nearly 3.29 times higher transactions outside the country compared to that of foreign nationals within Bangladesh in this month.

Spending patterns of credit cards revealed that across showed that nearly 50 per cent of transactions through credit cards occurred in department stores.

Bangladeshi nationals primarily use their credit cards in the USA (14 per cent) while the USA cardholders accounted for the highest spending (42 per cent) among foreign nationals within Bangladesh.

A country-wise breakdown of cross-border transactions also revealed that the rest of the spending through credit cards spread across other countries namely Thailand with 10.07 per cent, Singapore 9.74 per cent, UK 9.26 per cent, Malaysia 9.19 per cent, India 6.62 per cent, Saudi Arabia 5.40 per cent, Netherlands 4.10 per cent, Canada 3.86 per cent, UAE 3.36 per cent, Australia 3.15 per cent, Ireland 2.67 per cent, and other countries 8.32 per cent.

The VISA cards emerged as the most popular choice for domestic, outward and inward transactions in April 2025, the BB Data revealed.

Credit cardholders primarily use their cards at department stores abroad, making up 31.63 per cent of transactions.

Among other significant categories, transactions in retail outlet services account for 18.07 per cent, drug and pharmacies 11.06 per cent, transportation 10.44 per cent, business services 7.64 per cent, clothing 6.69 per cent and other sectors 14.47 per cent.​

 

[Saif]

Govt cuts interest rates on savings certificates

The government has lowered the interest rates on all types of National Savings Certificates for the second half of 2025. The interest rate ceiling for certificates has been set at 12 per cent, while the floor is 9.74 per cent. Previously, the lowest interest rate for certificates was 10.13 per ce

thefinancialexpress.com.bd

Govt cuts interest rates on savings certificates

FE ONLINE DESK
Published :
Jul 01, 2025 15:08
Updated :
Jul 01, 2025 15:08

The government has lowered the interest rates on all types of National Savings Certificates for the second half of 2025.

The interest rate ceiling for certificates has been set at 12 per cent, while the floor is 9.74 per cent.

Previously, the lowest interest rate for certificates was 10.13 per cent and the highest was 12.55 per cent, reports bdnews24.com.

The Department of National Savings issued a notification on Monday fixing the new interest rates. However, the existing interest rate for four types of schemes -- Wage Earner Development Bond, US Dollar Premium Bond, US Dollar Investment Bond and Post Office Savings Bank General Account -- will remain unchanged.

The government has decided to revise the interest rate on savings certificates every six months. It had previously announced rates in January for the next six months.

Even if the interest rate changes, the rate fixed at the time of purchase will be maintained until the scheme under which the investment was made matures.

One interest rate is set for investing Tk 750,000 in savings certificates individually or jointly. The government offers a relatively lower interest rate for investments exceeding that amount.

According to the latest decision, the interest rate for an investment of Tk 750,000 in a pensioner savings certificate for five years will be 11.98 per cent, which is the highest interest rate. Previously, the highest rate was 12.55 per cent.

The interest rate for an investment of Tk 750,000 in this scheme for one year will be 9.84 percent. Earlier, it was 10.23 per cent for one year.

If an investment of Tk 750,000 in a five-year Bangladesh Savings Certificate is withdrawn after a year, the interest rate will be 9.74 per cent. If the investment is more than Tk 750,000, the interest rate for the same period will be 9.72 per cent.

Interest rates are also determined every three months for profit-based savings certificates, family savings certificates and post office savings accounts.

Family savings certificates are the most popular savings scheme. The interest rate for an investment of up to Tk 750,000 in this savings certificate for a period of five years is now 11.93 per cent, down from 12.50 per cent previously.

If withdrawn after a year, the interest rate comes down to 9.81 percent, from 20.20 percent previously.

For investments of more than Tk 750,000, the minimum interest rate is 10.11 per cent and the maximum is 12.37 per cent.

To meet the budget deficit, the government plans to borrow Tk 1.26 trillion from domestic sources for the 2025-26 budget, which is 2.0 per cent of GDP.

Of this amount, the government has targeted raising Tk 125 billion from savings certificates. Over the last 10 months of the fiscal year 2024-25, the government had to repay more than it had borrowed from savings certificates.

The government had to pay net interests of Tk 74.31 billion over the last 10 months for savings certificates, meaning that the sector saw debt growth. It had planned to borrow Tk 140 billion from the scheme in the previous fiscal year.​

 

[Saif]

Bangladesh receives $2.70 billion in remittance in 29 days of June

Expatriate Bangladeshis sent over $2.70 billion in remittances during the 29 days of June in the 2024-25 fiscal year. This marks a 14.10 per cent increase compared to the same period last year, when remittances totalled $2.37 billion, said Arif Hossain Khan, executive director of Bangladesh Bank.

thefinancialexpress.com.bd

Bangladesh receives $2.70 billion in remittance in 29 days of June

FE ONLINE DESK
Published :
Jul 01, 2025 14:52
Updated :
Jul 01, 2025 14:52

Expatriate Bangladeshis sent over $2.70 billion in remittances during the 29 days of June in the 2024-25 fiscal year.

This marks a 14.10 per cent increase compared to the same period last year, when remittances totalled $2.37 billion, said Arif Hossain Khan, executive director of Bangladesh Bank.

According to the data, Bangladesh received a record $30.21 billion in remittances during the outgoing fiscal year up to June 29 — the highest ever in any fiscal year in the country’s history.​

 

[Saif]

Record remittance raises reserve to $31.68b

Foreign currency reserves have crossed US$31 billion mark at the end of June 2025 due to a record inflow of remittances this fiscal year 2024-25 (FY25). The country's gross reserves have risen to $31.68 billion, according to data released by the Bangladesh Bank (BB) today, Tuesday.

en.prothomalo.com

Record remittance raises reserve to $31.68b

BSS Dhaka
Published: 01 Jul 2025, 22: 54

Foreign currency reserves have crossed US$31 billion mark at the end of June 2025 due to a record inflow of remittances this fiscal year 2024-25 (FY25).

The country's gross reserves have risen to $31.68 billion, according to data released by the Bangladesh Bank (BB) today, Tuesday.

The surge came after a significant increase in remittance inflows, which reached $30.33 billion in FY25-- the highest ever in any fiscal year in the country's history.

However, as per the International Monetary Fund (IMF) methodology under the Balance of Payments and International Investment Position Manual (BPM6), Bangladesh's net reserves currently stand at US$26.66 billion.​