The stability of Bangladesh’s financial sector has been significantly restored. The country’s foreign exchange increased by 1.70 billion dollars in 2025, with gross reserves surpassing 27 billion dollars by the end of April. The dollar exchange rate has remained stable at 122 taka. Eleven of the country’s 61 banks had reached a critically weak position. Of these, two banks - Islami Bank Bangladesh and United Commercial Bank -have managed to turn around through their own efforts. Bangladesh bank did not have to provide then with any assistance.
Among the other banks, Bangladesh Bank managed to salvage a few by printing money. This liquidity support has possibly saved them from bankruptcy. Despite this, a few banks are still in very poor condition. A process is underway to merge these weaker banks with larger ones. Bangladesh Bank Governor Dr. Ahsan Mansur has repeatedly assured the public that depositors of these banks will not face any difficulty in getting their money back. The financial scenario described above is undoubtedly commendable.
Even if we do not receive the IMF loan installments, it will not be harmful. The economy will continue as it is. Bangladesh’s goal is to ensure its own financial stability and independently implement necessary reforms.Ahsan Mansur, Governor, Bangladesh Bank
A change has begun to take shape in the country’s economy over the past none years. Although this of change is beginning to impact all sectors of the economy, the success is most tangible in the financial sector. The nation has been saved from an economic 'meltdown.' For the past decade, with direct patronage from the fallen autocrat Sheikh Hasina, capital flight had become the number one problem plaguing the economy. The economic development under Awami League came at the cost of plunging the nation into a sea of debt amounting to 18 trillion taka, creating a false narrative of economic progress while enabling rampant looting of capital and an incredible record of capital flight.
According to a headline report published in Bonik Barta on 7 August, the total outstanding domestic and foreign debt of the Bangladesh government as of 5 August that year, stood at over 18.35 trillion taka. In contrast, on 6 January 2009, the day Sheikh Hasina came to power, the government's total domestic and foreign debt stood at only 2.7683 trillion taka. This means the difference in the debt figures over this period is approximately 15.58 trillion taka.
Before fleeing on 5 August, Hasina left the people of the country submerged in this massive sea of debt. Until the very end, she continued to display high per capita GDP growth figures every year. During her regime, under the pretext of accelerating economic development, the actual cost for every mega project was inflated by three or four times, resulting in the embezzlement of trillions of taka. The 15 and a half years have seen a frenzy of corruption and capital theft.
The White Paper committee has shown that over the 15 and a half years of autocratic rule, an average of 6 billion dollars was looted and laundered abroad each year, amounting to a total of 234 billion dollars. The banking and finance sectors were most affected by this looting, followed by energy and power, then physical infrastructure, and finally the information technology sector. All this weakened investment and revenue collection, leading to a collapse in foreign currency reserves and disruption of macroeconomic management and good governance.
Recently, uncertainty has arisen over receiving the third and fourth tranches of the 4.70 billion dollar IMF loan. It is reported that the IMF is dissatisfied with the Bangladeshi government's position on two key conditions. The first is that Bangladesh Bank is unwilling to leave the exchange rate of the dollar entirely to the market. The second is the government’s reluctance to increase the tax-GDP ratio by 1.5 percentage points from the current 8.5 per cent
If the dollar rate is fully market-based, there is fear the exchange rate may spiral out of control due to market manipulators and aggregators, potentially rising to 170 taka -180 taka per dollar. Bangladesh Bank argues that it does not want to trigger a dollar crisis like in Pakistan or Sri Lanka by liberalising the exchange rate too soon. In Pakistan, one dollar is now 280 rupees and in Sri Lanka, 400 rupees. In contrast, Bangladesh has maintained stability at 122 taka per dollar.
Since 27 June 2024, Bangladesh has not received any IMF loan installments. If the dollar exchange rate can be kept stable and foreign currency reserves increased by 1.70 billion dollars without IMF funds, then why should Bangladesh accept such risky IMF conditions?
It is important to note here that this success has been achieved due to eight months of consistent growth in remittance inflows through official channels and this trend continues. In an interview on 26 April, the governor of the central bank said, "Even if we do not receive the IMF loan installments, it will not be harmful. The economy will continue as it is. Bangladesh’s goal is to ensure its own financial stability and independently implement necessary reforms." This determination is a very positive sign. This determination must remain realistic.
* Moinul Islam is an economist and former professor at the economics department of Chittagong University.
* This column appeared in the print and online edition of Prothom Alo and has been rewritten for the English edition by Ayesha Kabir