Moody’s Ratings has identified Bangladeshi banks as among the most vulnerable in the Asia-Pacific region to the recent 37% increase in U.S. import tariffs on Bangladeshi goods. This heightened exposure stems from Bangladesh’s heavy reliance on ready-made garment (RMG) exports, a sector now facing substantial challenges due to the tariff hike. The increased tariffs are expected to dampen economic growth by reducing export volumes, which could, in turn, strain loan growth and asset quality within the banking sector. Moody’s also highlighted existing concerns over poor asset quality and low capital buffers in Bangladeshi banks, suggesting that the tariff-induced economic pressures may exacerbate these issues, leading to increased credit stress and potential financial instability.
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