Current Account Deficit Narrows to $1.27 Billion in Jul-Feb of FY 25

Bangladesh Bank has announced a Tk 9.0 billion startup fund aimed at accelerating economic growth by providing capital to new enterprises. The fund will be distributed through commercial banks and is part of the government's initiative to foster innovation and investment in the startup sector.

Bangladesh's current account deficit (CAD) decreased significantly to $1.27 billion during the July-February period of FY25, down from $4.07 billion in the same period of the previous fiscal year. This improvement is mainly attributed to higher remittance inflows, which increased by 22.6%, and a 9.1% growth in export earnings. Consequently, the balance of payments (BoP) deficit also improved, dropping to $1.11 billion from $4.44 billion in FY24.

The yields on treasury bills (T-bills) rose sharply as banks held back excess liquidity before Eid-ul-Fitr. The 91-day T-bill yield increased to 10.75% from 10.35%, the 182-day yield rose to 10.90% from 10.84%, and the 364-day yield jumped to 11.09% from 10.79%.

Bangladesh Bank (BB) has lowered the daily cash reserve requirement (CRR) for banks from 3.5% to 3%, effective tomorrow, while maintaining the biweekly CRR at 4%. This move aims to enhance liquidity management and slightly increase investable funds for banks.

The central bank's bailout committee aims to address loan rescheduling for non-wilful defaulters but faces resistance from commercial banks struggling with high non-performing loans (NPLs). At a mid-February meeting with 15 banks, officials hesitated to reschedule Tk 500 million-plus loans, citing financial strain.

Bangladesh Bank Governor Ahsan H Mansur announced that improved governance has halted money laundering in the country, even amid political instability.