Moody’s downgraded Bangladesh’s sovereign rating from B1 to B2, shifting its outlook to negative, citing heightened political risks and potential economic slowdown. However, Bangladesh Bank (BB) criticized the downgrade, labeling it as retrospective and not reflective of current progress. Following the recent political transition and installation of an interim government, significant reforms have been initiated in governance, anti-corruption, and economic stability. BB highlighted measures such as comprehensive banking sector reforms, external debt repayment of $2.05 billion since August 2024, and stabilizing the foreign exchange rate at Tk 120 per dollar, supported by remittances and export growth.
BB emphasized structural improvements, including tighter monetary policies, replenished fertilizer stocks, and reduced import duties to tackle inflation. The external current account has improved to near balance, and reserves stabilized at $19 billion. It urged Moody’s to reassess based on these developments, emphasizing that the economy is undergoing transformation, with positive impacts yet to fully materialize.
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