BB Cash Issuance Reaches Tk 2,83,700 Crores

The ownership pattern in Bangladesh's government securities (G-sec) market is shifting as individual and institutional investors increasingly dominate, moving funds away from banks. This change is driven by higher returns from treasury bills and bonds, resulting in stagnant deposit growth for banks, which currently ranges between 9% and 10.5%.

Bangladesh's currency, the taka, has achieved equilibrium among its peers, with the real effective exchange rate (REER) reaching approximately 100 by the end of September 2024. This stabilization, up from 99.53 in June and 105.07 in March, has positively influenced the country's export performance.

Bangladesh's current account posted a $111 million surplus in July-August FY25, its first in years, primarily driven by a 15.8% year-on-year rise in remittances. This shift comes after a $610 million deficit in the previous fiscal year, attributed to remittances moving from informal to formal channels and reduced money laundering.

Bangladesh's Ministry of Finance has initiated a redesign of all banknotes, leading to speculation about the removal of Sheikh Mujibur Rahman's image from currency. In a recent letter, the ministry requested proposals from the Bangladesh Bank for new designs, suggesting that keeping Mujib's image might not be a priority. 

Bangladesh Bank (BB) has shifted its policy by significantly reducing foreign currency sales to commercial banks in an effort to protect the country’s fast-depleting forex reserves. In FY24, BB sold $12.80 billion to banks while buying only $3.38 billion, with average monthly net dollar sales around $800 million.

Ahsan H. Mansur, Governor of Bangladesh Bank, announced that the central bank will not resort to printing money or selling dollars from reserves to tackle financial sector challenges. Instead, the focus is on providing liquidity support from other banks.