Bangladesh's foreign exchange reserves have once again dropped below $20 billion, driven by import bills and foreign debt repayments. The foreign exchange crisis in Bangladesh persists, leading to a decline in reserves to $19.93 billion as of January 22, according to the International Monetary Fund’s (IMF) BPM-6 standards. On the same day, total reserves stood at $25.22 billion, as reported by Bangladesh Bank. Forex reserves slide to $20 billion after clearing ACU bill On January 15, the reserves were $21.3 billion under BPM-6 standards, with total reserves at $25.18 billion. Over the last six days, reserves have decreased by $200 million under BPM-6. Additionally, there is another calculation of net or actual reserves, which the central bank does not disclose. Sources indicate that the country's usable or actual reserves now stand below $16 billion. Bangladesh's forex reserves reach $20bn amid rise in remittance These real reserves, free of liabilities, are calculated as per IMF guidelines provided during loan arrangements. The IMF also requires Bangladesh to maintain specific levels of real reserves at designated intervals as a condition for its loans.

Bangladesh Bank (BB) Debt Management Department (DMD) on Tuesday issued a circular clarifying the amendment of the family saving certificate policy.  The following paragraph has been substituted for Article 3 of the Family Savings Certificate Policy, 2009: Savings Certificate sales resume Eligibility for purchasing savings certificates: The central bank said that any Bangladeshi aged 18 and above, any Bangladeshi physically disabled person of maximum 65 years old and above may apply for purchasing this savings certificate in the prescribed form. “A maximum worth of Tk 45 (forty-five) lakh can be purchased in a single name. This savings certificate cannot be purchased in a joint name and no institution's money can be used in it," said the BB notification.

Bangladesh Bank has extended the payment period for imported raw materials and agricultural inputs from 180 days to 360 days. The central bank issued a circular on Monday to conserve dollars and maintain the supply chain. The circular said that the delayed payment limit for imports of raw materials for industries, including back-to-back imports, agricultural inputs, and chemical fertilisers, has been extended from 180 days to 360 days. Bangladesh Bank considering policy rate hike as living costs soar As a result, Bangladesh Bank has allowed delayed payments for imports to conserve foreign exchange reserves during the ongoing dollar crisis. This provision will remain in effect until December. However, the circular specifies that this facility does not apply to imports under Export Development Fund (EDF) loans. Earlier, the central bank had issued a circular on June 30 last year, which increased the delayed payment limit for these imports to 360 days, though the validity period lasted until December 31, 2024. Stock market opens on a positive note, majority companies see gains According to the new circular, customers cannot extend the payment period for foreign currency liabilities beyond the specified time. Industry insiders believe that extending the payment period for imports will provide relief to the foreign exchange market.

Bangladesh Bank Governor Ahsan H Mansur has unveiled startling details about money laundering activities, including the illicit transfer of $20 billion abroad by a Chattogram-based entity. Speaking at the Branding Bangladesh event in the capital on Saturday, the Governor highlighted the steps being taken to recover the siphoned off funds and strengthen the country’s economic governance framework. He pointed to a single case where $20 billion was transferred abroad illegally, marking it as one of the largest instances of money laundering in the country’s history. Governor Mansur said that improved governance has significantly curbed capital flight, but recovering the stolen funds remains a priority for the authorities. Former ED Ahsan Ullah joins central bank as advisor to the Governor “We are collaborating with international authorities to retrieve the siphoned money,” Mansur said, adding that discussions with the FBI and other foreign agencies are ongoing. To expedite the process, Bangladesh is also engaging foreign legal experts to tackle the complexities of international law. Global Collaboration to Tackle Laundered Funds Acknowledging the scale of the challenge, Mansur emphasised the importance of global cooperation. “Foreign organisations have shown willingness to assist us in recovering the laundered money,” he stated. The ongoing investigations underline the government’s commitment to bringing perpetrators to justice and recovering public assets lost through illicit financial outflows. The Governor linked the economic consequences of such financial crimes to broader issues, such as exchange rate manipulation. BB Governor acknowledges failures, achievements in financial sector He cited concerns over certain entities in Dubai exploiting the remittance process to influence currency rates. “This manipulation is harmful to our economy and needs to be addressed with strict oversight,” Mansur warned. Mansur commended the introduction of a 2.5% incentive on remittances sent through banking channels, which has contributed to a surge in remittance inflows despite political uncertainties. He, however, reiterated that ensuring transparency in financial systems and combatting laundering remain integral to the nation’s economic growth. Many struggling banks recovering: Bangladesh Bank Governor The governor emphasised the importance of bolstering the workforce’s skills to increase remittance inflows further. While these goals are ambitious, Mansur expressed optimism about achieving them with proper governance and international collaboration.

The government has appointed former Bangladesh Bank executive director AFM Shahinul Islam as the head of the Bangladesh Financial Intelligence Unit (BFIU) for the next two years from the date of joining. The Financial Institution Division of the Ministry of Finance issued a notification in this regard on Thursday. BFIU seeks Shomi Kaiser's financial transaction details According to the circular, he has been appointed as the "chief officer" of the Bangladesh Financial Intelligence Unit (BFIU) on a contractual basis, with the rank of deputy governor. The appointment is contingent upon his severing ties with any other institutions or organisations. BFIU summons bank transaction details of Sheikh Hasina, Sheikh Rehana, their children This order, issued in the public interest, will take effect immediately.

Bangladesh received record-breaking remittance in December 2024, according to the latest updates from Bangladesh Bank. In December alone, expatriates sent a staggering US $2.64 billion, marking the highest monthly remittance recorded. Adding to this milestone, a record-breaking $118 million was remitted in just one day between December 30 and 31, 2024. Inflation eases in Bangladesh in December Highlighting the growth, Husne Ara Shikha, spokesperson for Bangladesh Bank, said on Wednesday that monthly remittance inflows increased by 32.5 percent year-on-year in December. During the July to December period of 2024, expatriates sent a total of $13.77 billion, reflecting a sharp 27.6 percent growth compared to the $10.8 billion received during the same six-month period in 2023.

Bangladesh Bank (BB) has clarified that the immediate risks to the country’s financial sector have been resolved, but full economic stability is still a work in progress. Husne Ara Shikha, Executive Director and spokesperson for the central bank, made the remarks during a discussion with journalists at her office on Tuesday. Bangladesh Bank appoints Ernst & Young, KPMG to audit 6 troubled banks “The good news is that financial losses have already been reduced and the critical risks in the financial sector have been addressed,” said Shikha. She, however, noted that the bank is not entirely satisfied with the progress so far. Key Initiatives Taken Over the last five months, from July to November 2024, Bangladesh Bank has implemented several measures to stabilise the economy. These include restructuring of commercial banks, formation of a specialised banking task force, efforts to stabilise the foreign exchange market and inflation control strategies. “Some of these initiatives have already yielded results, but other outcomes will require more time to manifest,” Shikha explained. Money Laundering and Account Seizures Discussing the issue of money laundering, Shikha revealed that approximately 400 accounts were seized by the Bangladesh Financial Intelligence Unit (BFIU) as of November 2024, following the recent political changeover. Bangladesh Bank caps exchange rate spread at Tk 1 “By the end of 2025, we expect to have a clear understanding of how much money has been laundered, through which banks, and to which countries,” she said, adding that recovering the laundered funds would be a lengthy process. She noted that agencies tasked with recovering the funds are working diligently but do not disclose details to the central bank for security reasons. Inflation Control On inflation, Shikha highlighted that BB had increased the policy interest rate multiple times in an attempt to curb rising prices. “We are hopeful that inflation will ease this January. However, if it remains unchecked, further hikes in the policy interest rate may be necessary,” she warned. Challenges in Private Credit Growth When asked about the sluggish growth in private credit, Shikha clarified that credit expansion is not solely dependent on interest rates. “Infrastructure development, energy supply and port facilities all play a critical role in enabling private sector growth,” she said. Bangladesh Bank lowers cash margin for car import LCs While significant strides have been made in addressing financial vulnerabilities, Shikha cautioned that achieving full economic stability will take time. “We are committed to building a resilient and stable financial system, but patience is essential as the process unfolds,” she added.

Bangladesh Bank has enlisted global auditing firms Ernst & Young (EY) and KPMG to evaluate the asset quality of six banks currently mired in financial irregularities and corruption. The audit, funded by the Asian Development Bank (ADB), is part of efforts to restore transparency and accountability in the banking sector. The six banks targeted for the audits are: First Security Islami Bank Exim Bank Global Islami Bank Social Islami Bank ICB Islamic Bank Union Bank EY will focus on Global Islami Bank, Social Islami Bank, and ICB Islamic Bank, while KPMG will handle First Security Islami Bank, Exim Bank, and Union Bank, according to central bank sources. Bhomra land port posts Tk 16.24 revenue in first half of FY 24-25 Bangladesh Bank spokesperson Hosne Ara Shikha said that the audit's findings will determine whether the managing directors (MDs) of these banks can resume their positions. If the audit proves the MDs were not involved in financial irregularities, they may return to their roles. Otherwise, they will be permanently barred, Shikha explained. Notably, four of the six banks are associated with the S Alam Group, a business conglomerate linked to former Prime Minister Sheikh Hasina. Following the political transition in August, the central bank restructured the boards of directors for these banks. The ADB, which is actively supporting the reform efforts, recently sent representatives to Bangladesh. They recommended a comprehensive review of the banks' asset quality, prompting this high-level audit. DSEX index increases by 6.91 points with Tk 81.5 crore traded in first hour Bangladesh Bank has already requested detailed information from the six banks. Their chairmen have been instructed to provide full cooperation to the auditing teams. Meetings involving central bank Governor Ahsan H. Mansur, top officials, and ADB representatives have emphasized the importance of transparency during the process. Initial inspections revealed alarming patterns of anonymous cash withdrawals involving substantial amounts, said a Bangladesh Bank official on condition of anonymity.

The Managing Directors (MDs) of six crisis-hit banks have been placed on compulsory leave to facilitate an international audit, as instructed by Bangladesh Bank (BB), officials said. The directive is aimed at shariah-based banks owned by S Alam Group. First Security Islami Bank (FSIB) has already acted on this instruction, sending its MD, Syed Wasek Md Ali, on forced leave for the next three months. The decision was made in an emergency meeting of the bank’s board of directors on Saturday (January 4). Mohammad Abdul Mannan, FSIB’s chairman, confirmed the development. The bank’s Additional Managing Director, Abu Reza Md. Yahia, has been appointed as acting MD. Five more banks are on the central bank’s list for similar actions. These are Union Bank, Global Islami Bank, Exim Bank, ICB Islami Bank and Social Islami Bank. The process of sending their MDs on leave is currently underway. Banks in Bangladesh faced catastrophic year in 2024 amid liquidity crisis An official from BB revealed that an emergency meeting with the boards of directors of these banks was held last Thursday (January 2). Bangladesh Bank spokesperson Husneara Shikha said, "The decision for the six bank MDs to remain on leave is a collective resolution by the respective banking boards. Bangladesh Bank will conduct audits and asset quality reviews on these six banks.” This measure, she said, aims to prevent the managing directors from making undue interventions during the process. “The leave is temporary at this stage. If they are found innocent after the audit, they will be allowed to resume their roles without any restrictions. However, if irregularities are detected, appropriate actions will be taken following due regulations. This decision by the central bank aligns with international practices." During the meeting, the central bank ordered the removal of senior officials, including MDs closely associated with S Alam Group, to ensure a transparent investigation and further necessary actions. In compliance with these instructions, FSIB’s board promptly convened and decided to send its MD on leave. Many struggling banks recovering: Bangladesh Bank Governor Meanwhile, Social Islami Bank, which has recently been freed from S Alam’s control, has scheduled an emergency board meeting for Sunday (January 5). Similar changes to the leadership of the other banks are anticipated soon. Mohammad Abdul Mannan, who took over as chairman of FSIB on September 1 following a BB-led restructuring of the board, said the move aligns with efforts to reform the banking sector. He replaced Saiful Alam Masud, head of S Alam Group, who previously chaired the bank. Mannan himself was removed from Islami Bank in 2017 after S Alam took control. A chairman of another affected bank, speaking on condition of anonymity, said, “The MDs who served during the period of corruption will be sent on leave temporarily, enabling international audit organisations to work impartially through the central bank.” This decision was reportedly taken on the recommendation of the Banking Task Force, formed to drive reforms in the sector.

Bangladesh Bank has introduced a maximum exchange rate spread of Tk 1 - meaning the difference between the buying and selling rates of a foreign currency cannot exceed Tk 1, to ensure uniformity and transparency in exchange rate practices. The Foreign Exchange Policy Department of the central bank issued a circular in this regard on Thursday. The circular stated, “The application of unusual spreads by Authorized Dealers (ADs) between buying and selling rates of foreign currency results in discriminatory currency arrangements and multiple currency practices.” To address this issue, ADs are now required to apply a maximum of Tk 1 as spread between buying and selling while each AD shall apply spot rate uniformly irrespective of the size for all buying transactions of a business day. Similarly, uniform spot rate shall also be maintained for all selling transactions of a business day, it added. The central bank also issued instructions to display the exchange rates on digital screens at AD branches and on their official websites to ensure visibility for customers. BB eases forex rules for July-August victims’ treatment abroad ADs have also been instructed to report their daily foreign exchange transactions to Bangladesh Bank following the procedures outlined in relevant guidelines, including the Guidelines for Foreign Exchange Transactions-2018, FE Circular Letter No 06/2022 and FE Circular No 38/2024. Non-compliance with these regulations will result in punitive measures, including financial penalties, under the Foreign Exchange Regulation Act, 1947 and the Bank Company Act, 1991, the circular stated.