ORAWEK
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MONDAY, 18 MAY 2026
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Bangladesh Business & Economy
20 banks' capital shortfall hit Tk 2.78 lakh crore in Dec '25 — banking sector CRAR turns negative for first time in history
Bangladesh Bank's latest quarterly data reveals the deepest banking crisis in the country's history. The combined capital shortfall of 20 undercapitalised banks reached Tk 2.78 lakh crore in the December 2025 quarter — up sharply from Tk 2.82 lakh crore (23 banks) in September 2025. More alarming: the banking sector's Capital to Risk-Weighted Assets Ratio (CRAR) fell to negative 2.9% in December 2025, the first time it has gone negative in Bangladesh's history. The required minimum is 12.5%. The NPL ratio, while retreating from a September peak of 35.73%, still stood at 30.60% in December — the highest in the world at that point. The five worst-affected banks (First Security Islami Bank, Bangladesh Krishi Bank, Union Bank, Islami Bank, and Exim Bank) account for over half the total shortfall. Key implication for today: banks constrained by this capital hole cannot lend at scale, which throttles trade finance and SME credit throughout the economy.
Govt charts $1 trillion economy, 1 crore jobs — new growth roadmap targets FDI surge and export diversification
The government has formally laid out a multi-year economic growth strategy anchored by two headline targets: a $1 trillion economy by 2034 and 1 crore (10 million) new jobs within 18 months of taking office. The plan calls for raising GDP growth to 8–10% annually — far above the current FY26 trajectory of 3.7–4.7%. Key pillars include raising private investment from 22% of GDP to at least 35%, merging BIDA/BEZA/BEPZA into a single investment promotion authority, and targeting ICT-sector employment of 1 million, including 200,000 in cybersecurity, BPO, and AI-related roles. CPD immediately flagged the core challenge: financing and implementation. Bangladesh has never sustained 8% growth for more than three consecutive years, and private investment has fallen for three straight years. The plan is ambitious but rests on institutional reforms that are not yet in place.
New Zealand assures post-LDC duty-free access; over 200 tariff lines set for rationalisation in FY27 budget
Two trade-policy developments landed Saturday that matter directly for exporters and importers. First: New Zealand's non-resident High Commissioner David Pine confirmed on May 17 that Wellington will continue duty-free and preferential market access for Bangladeshi goods after LDC graduation (scheduled November 2026, with a deferral application pending). Both sides also discussed a bilateral Free Trade Agreement. Bangladesh graduates in roughly six months — UK, Canada, Australia, and now New Zealand have confirmed continuity; the EU, Japan, and India remain the critical outstanding negotiations. Second: the upcoming FY27 budget will rationalise customs, regulatory, and supplementary duties on more than 200 tariff lines, continuing a reform programme begun in FY23. The NBR has already scrapped regulatory duties on 282 items since FY23 and is now committing to WTO compliance on 60 previously-breached bound-rate lines. NBR Chairman Abdur Rahman Khan has separately pledged to build a fully faceless, digital tax system to reduce harassment of compliant businesses.
Dhaka division gets half of March remittances; BB settles Tk 3,100 crore in export incentives in FY26
Bangladesh Bank data shows Dhaka Division alone received approximately 50% of all remittances in March 2026, underscoring geographic concentration in inflows. Separately, Bangladesh Bank has settled over Tk 3,100 crore (approximately $252M) in export incentives during FY26 — a significant disbursement for exporters navigating weaker global demand. Export incentive rates were kept unchanged for the second half of FY26 (Jan–Jun 2026), providing short-term stability. However, post-LDC graduation in November will trigger WTO restrictions on export subsidies, making today's incentive structure a ticking clock for garment and other export-sector CFOs.
📌 Banking Crisis — The negative CRAR figure is not an abstraction. It means the sector collectively owes more in risk-adjusted liabilities than it holds in capital. Any corporate treasury relying on state-owned or Islami-sector bank LCs for trade finance needs a secondary banking relationship with a private commercial bank with positive CRAR — now, not when the next crisis hits.
📌 Tariff Rationalisation — 200+ tariff-line changes in a single budget cycle is a major shift. Importers in protected sectors (beverages, energy-saving products, construction materials) should model both scenarios — current duty and post-reform rate — before locking in FY27 procurement contracts.
Economy Watch
Data Point · Updated 18 May, 8 AM
USD / BDT
~122.8 ৳
BB interbank close, May 17 · 12-month range: Tk 120.27–123.46 · Taka broadly stable; US Dollar index (~99.2) under mild pressure
YUAN / BDT (CNY)
~18.06 ৳
Xe mid-market · 17 May · 30-day range: 17.94–18.09 · CNY firmer after US–China summit; BD importers from China paying marginally more
DSEX Close — May 17
5,226.18 pts
▼ −19.04 (−0.36%) · First session after weekend · Mild selling pressure · Banking-sector capital crisis overhang
Gold 22K / Bhori
2,38,121 ৳
▼ Down from Tk 2,44,711 (May 15 rate) · International gold ~$4,545/oz · Hormuz-driven energy fear easing slightly; gold pulled back
Inflation Rate (Apr '26)
9.04%
▲ Up from 8.91% in Mar · Food inflation: 8.24% · Oil price surge adds upward pressure for May print
Policy Rate (BB)
10.0%
Bangladesh Bank repo rate · Unchanged · Business lobby pushing for 12% lending cap · Next MPC review pending
Bad Loans (NPL) Dec '25
30.60%
▼ Down from 35.73% peak (Sep '25) · Decline due to relaxed rescheduling (2% down-payment) · CRAR now negative (−2.9%)
GDP Growth FY26
3.7–4.7%
Fitch: 3.7% · WB: 3.9% · ADB: 4.0% · IMF: 4.7% · FY25 actual: 3.49%
Global Signal
Overnight — What Reaches Dhaka by Monday Morning
| Brent Crude OilPrice.com / TradingEconomics · 15–17 May 2026 | ~$109–110/bbl ▲ · Rose past $109 on Fri May 15, closing the week +8.1% · Hormuz still effectively closed · Trump warned Iran of "annihilation" if no deal · Iran claims ~30 ships crossed since Wednesday but negotiations remain far apart · IEA: crude and fuel flows through Hormuz fell ~4M bbl/day in March–April · Market may stay severely undersupplied through October |
| WTI Crude OilPrice.com · 15–17 May 2026 | ~$105–106/bbl · Climbed 4.5% on Fri; +11% for the week · 52-week range: $54.98–$117.63 · US crude inventories continue to tighten · US gasoline avg ~$4.52/gallon · Trading range Mon AM: $101.48–$106 |
| Wall St — Fri 15 May close TradingEconomics / CNBC · 15–17 May 2026 | Dow 49,526 ▼ −1.07% · S&P 500 7,408 ▼ −1.24% · Nasdaq 26,225 ▼ −1.54% · Stocks fell sharply Friday on oil/yield surge — 10Y Treasury spiked to 4.55% (near 1-year high) · Intel −4.7%, AMD −3%, Nvidia −2% · Kevin Warsh formally takes over as Fed Chair today · Market has fully priced out any 2026 rate cut; 45% chance of a hike now priced in |
| US Fed Rate Federal Reserve / CME FedWatch · May 2026 | 3.50–3.75% · Held Apr 29 (3rd consecutive hold) · Kevin Warsh officially takes over as Chair today (May 18) · Hot PPI (+6.0% YoY, Apr) eliminates 2026 cut expectations · CME FedWatch: 45% chance of a hike now priced — was 1% a month ago |
| Bitcoin — May 17 Coinbase / OKX · 17 May 2026 | ~$77,800–78,000 ▼ · Down ~1.2–1.5% from Fri close · Crypto longs lost $500M as BTC slid below $78K overnight Sunday · US bond selloff and stocks slide dragged crypto · Polymarket assigns 100% to range $78,000–80,000 for May · ATH: $126,200 (Oct 2025) |
| Strait of Hormuz / Iran OilPrice.com / Reuters · 15–17 May 2026 | Effectively closed · US–Iran negotiations stalled after Iran rejected US draft proposal · Trump warned "annihilation" Thursday · Iran claims 30 ships crossed since Wed but independent verification limited · US and China agreed Hormuz "should be a free waterway" (Trump–Xi summit) but no operational ceasefire · IEA: global market severely undersupplied through Oct even if conflict ends next month · Key BD risk: LNG import cost, jet fuel, and shipping insurance premiums all rising |
| US–China Trade / BD Tariff US Embassy Dhaka / CNBC · May 2026 | US–China tariffs remain ~45% · Trump–Xi summit produced Boeing 200-jet order and Nvidia H200 chip sales clearance for 10 Chinese firms · BD–US: 19% base tariff rate in effect · BD still ranked #2 US apparel supplier but capturing zero incremental China-diversion share; Vietnam and Cambodia winning that race · Trump Section 122 appeal still live |
| US CPI & Core CPI — Apr '26 BLS · Released 12 May 2026 | Headline CPI +3.8% YoY (+0.6% MoM) · Core CPI: +2.8% YoY · Gasoline +28.4% YoY · Real wages fell 0.3% YoY · PPI (Apr): headline +6.0% YoY, +1.4% MoM — largest monthly jump since Mar 2022 · Zero Fed cuts priced for 2026; 45% chance of hike now |
| Goldman Sachs / IEA Warning IEA Oil Market Report · May 2026 | IEA: largest oil supply shock on record · Inventories fell at record pace in Mar–Apr (~4M bbl/day through Hormuz lost) · Goldman: energy shock inflationary all of 2026 · EIA projects Brent at $89/bbl by Q4 if Hormuz reopens · JPMorgan: "demand destruction beginning as consumers adjust" · Saudi Arabia output at lowest since 1990 |
| Asian Markets / India–BD TradingEconomics · 17–18 May AM | US futures flat-to-soft Mon AM · Nikkei under pressure from oil/yield surge · EM dual squeeze: strong-ish USD + oil shock · India supplying diesel via pipeline amid BD LNG shortage · BD seeking $3B additional ADB support for energy overruns · [TE] · Google I/O 2026 opens tomorrow (May 19) at Shoreline Amphitheatre — major AI announcements expected |
| Middle East / Israel–Lebanon Reuters · 15–17 May 2026 | US–Iran talks collapsed Fri · Netanyahu facing coalition crisis — ultra-Orthodox draft dispute threatening early elections · Dubai airport still recovering (passenger traffic down ~2/3 since UAE attacks) · US and China issued joint Hormuz statement but no enforcement mechanism · Conflict entering 13th+ week with no ceasefire timeline visible |
AI This Week
Practical Intelligence — Never Hype
For Your Work
Google I/O 2026 opens tomorrow — and "Gemini Intelligence" is the shift Dhaka professionals need to understand now, not next quarter. Google has already confirmed the broad outline: Gemini Intelligence is not a chatbot upgrade. It is a proactive AI agent that operates continuously across your Android phone, Gmail, Calendar, Drive, car, and (later this year) XR glasses — without waiting for you to type a prompt. It books parking near your calendar events, prepares meeting briefs from your emails, monitors approval queues, and handles multi-step tasks in the background. Google calls it "an intelligence layer, not an app." Tomorrow's keynote (May 19, 10 AM PT) is expected to also introduce Gemini 3.5 or 4.0 and a new video-generation model called Gemini Omni. The reason this matters to a Bangladeshi finance manager or operations lead today: the AI tools currently available in Bangladesh (Gemini, ChatGPT, Claude) are still largely reactive — you ask, they answer. Gemini Intelligence represents the shift to proactive, always-on delegation. A professional who adapts early — carefully, with thought about what data they grant access to — will have a meaningful productivity advantage over one who waits to see how it unfolds. One caution worth holding: Google's own onboarding screens warn that Gemini Intelligence "may share sensitive information with third parties." Before connecting any always-on AI to work accounts, review what each connected service can read and whether your employer's data policy permits it.
ORAWEK Note
A Real Observation. From a Real Person.
“
This Monday morning I am thinking about the gap between the numbers we publish and the decisions they should provoke. A banking sector with a negative CRAR is not a footnote in a quarterly report — it is a structural constraint on every business in Bangladesh that needs a bank letter of credit, every exporter who needs a guarantee, every SME owner who needs a working-capital line. And yet the day started the same way it always does. The stock market dipped mildly. The taka held. Gold slipped a little. The economy gave no outward sign that 20 of its banks are technically insolvent on a risk-adjusted basis. The $1 trillion economy roadmap and the negative CRAR are the same story told from opposite ends of the timeline. One is where the government says we are going. The other is where the foundation currently stands. Before the destination makes sense, the foundation has to be rebuilt. That is not pessimism. It is sequencing.
— Founder · Monday morning · Dhaka