Bangladesh’s banking sector is gradually recovering from the severe stress it faced due to a shortage of foreign currencies in the local money market since July last year. According to the Association of Bankers, Bangladesh (ABB), the forex supply situation has started easing due to prudent policy support from the central bank, resumption of transactions with overseas corresponding banks, and other relevant factors. While challenges still exist, the majority of banks, particularly private commercial banks, are now regular in foreign payments. The ABB also highlighted the narrowing exchange rate gap between formal and informal markets and the positive trend in net open positions of US dollar holdings. However, non-performing loans (NPLs) remain a challenge, with court interventions hindering recovery efforts. The ABB commended the central bank’s support in stabilizing the forex market and emphasized the need for a market-based interest rate regime.
Banking Sector Sees Forex Supply Improvement
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