Bangladesh’s professionals are starting the week with a rare thing in this economy: an actual deadline. Following last week’s IMF mission to Dhaka, negotiators on both sides are converging on a new loan facility worth $6 billion to $6.5 billion, with the IMF Executive Board’s formal approval targeted for December 2026 and the first tranche projected to land by February 2027 — provided Bangladesh delivers on a five-point reform agenda between now and then (Dhaka Tribune).

That roadmap runs through virtual technical consultations in August and September, high-level talks on the sidelines of October’s IMF-World Bank Annual Meetings in Washington, and a full IMF policy mission returning to Dhaka in November to finalise commitments before the Board vote. The five conditions the Fund wants to see progress on: aggressive revenue mobilisation, a genuine overhaul of the banking sector’s non-performing loan problem, tighter inflation control, disciplined foreign-exchange management under the crawling-peg system, and more efficient public spending — with targeted social protection preserved for lower-income groups during the adjustment.

Underpinning the negotiation is the IMF’s own downward revision of Bangladesh’s growth outlook: FY27 GDP growth is now projected at just 3.5%, against the government’s 6.5% budget target, with a warning that growth could fall below 3% over the medium term without decisive reform. Finance Minister Amir Khasru Mahmud Chowdhury has said reforms will proceed “in phases, in line with the priorities of the government,” while CPD’s Mustafizur Rahman and former finance secretary Mahbub Ahmed both note that political will, not technical capacity, is the real constraint on delivery.

This is the long-form version of our morning brief. For the shorter version, please visit:  Today’s Morning Brief

EU Apparel Market Share Keeps Eroding Faster Than Rivals

The competitiveness story that has run through recent editions deepened this week. New Eurostat data confirm Bangladesh’s apparel exports to the EU fell 18.9% in January-May, against an EU-wide import decline of roughly 10% — with China down just 4.2%, Vietnam down 1.51%, India down 13.33% and Türkiye down 15.66%, all outperforming Bangladesh by a wide margin. Bangladesh’s share of total EU apparel imports has slipped to 21.5% from 23.9% a year earlier (TBS).

BKMEA president Mohammad Hatem attributes the shift to buyers “gradually building sourcing capacity in India” ahead of Bangladesh’s loss of preferential access after LDC graduation. DBL Group’s MA Jabbar points to a structural weakness — Bangladesh, India, Pakistan and Cambodia remain heavily dependent on cotton-based products while Vietnam has built stronger man-made-fibre capability, a segment where global demand is shifting. Sparrow Group’s Shovon Islam was blunter still: this is a genuine market-share loss, not simply weaker global demand, and Bangladesh needs to move urgently on post-LDC trade access and EU due-diligence readiness or risk further order shifts.

Benapole Exports to India Nearly Halve on Reciprocal Trade Curbs

A second, quieter erosion is playing out at Bangladesh’s largest land port. Exports through Benapole fell to 189,358 tonnes in FY2025-26, down from 381,440 tonnes in FY2024-25 and 456,672 tonnes in FY2023-24 — a two-year collapse driven by reciprocal trade restrictions between Bangladesh and India that have hit jute, textiles, yarn, cotton waste, plastics and wooden furniture since 2025 (TBS). Daily export truck traffic has fallen below 100 against a normal 250-300, squeezing clearing-and-forwarding agents and port workers on both sides of the border. Industry leaders are pressing the government to pursue diplomatic resolution while accelerating use of the Bangladesh-India-Nepal-Bhutan transit framework to diversify away from an increasingly unreliable bilateral channel.

Banks Propose New Fees on 14 Services as Customers, Chambers Push Back

Closer to home, the Association of Bankers, Bangladesh (ABB) has asked Bangladesh Bank to approve new and higher charges across 14 services — including a Tk100-300 fee on cash withdrawals beyond three a month, a Tk500 fee to reactivate dormant accounts, and new charges on LC opening, loan processing, guarantees and foreign-currency cash sales (Daily Star). ABB chairman Mashrur Arefin frames the ask as overdue inflation catch-up, noting the taka’s fall from roughly Tk87 to about Tk123 against the dollar since the schedule of charges was last revised. But the timing has drawn sharp pushback: DCCI president Taskeen Ahmed called the proposal “highly unreasonable” given already-elevated lending rates, and the Chittagong Chamber of Commerce has formally asked BB to reject it outright, warning of a heavier cost burden on SMEs and consumers during an already difficult stretch.

Government Turns the Austerity Lens on Itself

The Finance Division has asked the Ministry of Public Administration to halve civil servants’ monthly vehicle-maintenance allowance from Tk50,000 to Tk25,000, and to reclassify officials on foreign scholarships from full-pay “deputation” status to standard education leave — ending the practice of drawing a full government salary alongside an external stipend (Dhaka Tribune). The move follows an earlier suspension of the interest-free executive car loan facility and sits within a wider FY27 austerity programme that has frozen new government-vehicle procurement, capped entertainment allowances, and cancelled the traditional post-budget state dinner. Economists including ICB chairman Abu Ahmed welcomed the discipline but cautioned that administrative trimming alone won’t deliver the scale of savings the economy needs without deeper procurement and tax-base reform.

Mixed Signals in the Economic Zones

Beza’s flagship National Special Economic Zone in Mirsarai is facing a genuine water-supply crisis: a proposed Tk10,553cr, 150km pipeline from the Meghna River has stalled after its South Korean private partner backed out, with authorities and industrial users still unable to agree on a tariff nearly four times the current Tk32/1,000-litre rate (TBS). Projected water demand is set to exceed 1 billion litres a day by 2040, against roughly 3 million litres currently drawn from groundwater.

Yet capital keeps arriving despite the friction. China’s Huarun Tex signed a land lease this week for a $30m textile manufacturing plant in the neighbouring Bepza Economic Zone, expected to employ 580 Bangladeshi workers and produce 24,000 tonnes of yarn and 20 million metres of grey woven fabric annually (Daily Star). And Bangladesh Bank has issued fresh operating guidelines for the country’s first Free Trade Zone, under development in Anwara, Chattogram, allowing FTZ-based businesses to import raw materials on a consignment basis — without opening Letters of Credit — and store them for up to 60 months (Dhaka Tribune).

Economy Watch: The Numbers That Matter Today

• USD/BDT: Interbank WAR 123.37, spot rate 123.55 as of 16 July — unchanged over the Friday-Saturday weekend (Bangladesh Bank)
• Yuan/BDT: 18.17-18.25 as of 16 July (Bangladesh Bank)
• DSEX: Last close 5,900.00, down 25.91 points (-0.437%) on 16 July; the exchange reopens today for the trading week (DSE)
• Gold (22K/bhori): Tk219,808, unchanged since 17 July (BAJUS via Goldr.org)
• Inflation (June, point-to-point): 9.16%, down from 9.42% in May; no July print released yet (BBS via Dhaka Tribune)
• Policy rate: Held at 10.0%
• New IMF facility: $6-6.5bn under negotiation, board approval eyed for December 2026, first tranche around February 2027 (Dhaka Tribune)
• Classified (bad) loans: 32.26% of total, the world’s second-highest rate after war-hit Ukraine, as of end-March (TBS)
• Gross forex reserves (June): $37.58bn gross, $32.93bn on a BPM6 basis (Bangladesh Bank)
• Remittances (FY26): $35.6bn, up from $30.3bn in FY25
• RMG exports to EU (Jan-May): Down 18.89% year-on-year
• Benapole land-port exports (FY26): 189,358 tonnes, down from 381,440 tonnes in FY25

Also worth flagging: the ongoing flood emergency has pushed the national death toll to 59, with Cox’s Bazar worst affected (Dhaka Tribune).

Global Signal: What Reached Dhaka Overnight

The Middle East war crossed a grim threshold overnight. US Central Command confirmed two American service members killed and one missing after Iranian ballistic-missile and drone attacks on a base in Jordan on Friday — the first US combat deaths from direct Iranian fire since the war’s opening days, bringing total US fatalities to 16 with more than 430 wounded (TBS/AP). Hours earlier, Iran’s Supreme Leader Mojtaba Khamenei called President Trump’s signature “worthless and invalid,” and Tehran’s deputy foreign minister said Iran is suspending its commitments under last month’s interim de-escalation deal. US forces struck Iranian bridges, a desalination and power plant, and infrastructure near the strategic port of Bandar Abbas for a seventh consecutive night; Iran, in turn, hit a desalination plant and oil facility in Kuwait for the second day running, and fired on targets across Bahrain, Jordan, Kuwait, Oman, Qatar and Syria.

Oil prices reflect the escalation: Brent settled near $88.09/bbl on Friday, up 4.58% on the day, with the broader crude benchmark near $81.78-82.47/bbl — both at one-month highs, and up more than 14% for the week, as the US reinstated a naval blockade on Iranian ports (Trading Economics).

Russia’s war on Ukraine also flared, with Ukrainian drones striking an oil depot and two logistics warehouses in Russia’s Moscow and Tambov regions early Saturday, killing seven, while Russia struck Ukrainian ports in return (Bloomberg). In Lebanon, President Joseph Aoun departed for Washington for the first such visit by a Lebanese head of state since 2009, to discuss ceasefire enforcement with Trump after Rome talks fixed the structure for two Israeli pilot withdrawal zones — even as fresh Israeli strikes hit towns near Tyre and Nabatieh on Saturday (Dhaka Tribune/AFP). In Gaza, strikes continued despite the nominal ceasefire, with the Palestinian death toll since October 2023 passing 73,000; incoming UK Prime Minister Andy Burnham faces pressure from mass London rallies to impose an arms embargo on Israel (Al Jazeera).

On Wall Street, Friday’s close reflected both the Middle East jitters and a fresh AI-competition scare: the Dow fell 0.77% to 52,146.42, the S&P 500 dropped 1.01% to 7,457.69, and the Nasdaq slid 1.40% to 25,520.24, as chip stocks sold off following the release of China’s Kimi K3 model. The US Federal Reserve holds its target rate at 3.5%-3.75%, with the next FOMC meeting set for July 28-29 and markets broadly expecting another hold. Bitcoin traded around $64,200, continuing to hold the $60,000-$64,000 range it has occupied through much of the month.

AI This Week: A Free Model Just Matched the Frontier

China’s Moonshot AI released Kimi K3 this week, an open-weight model that independent evaluators are assessing as competitive with leading proprietary systems — even as Moonshot itself says it still trails the top closed models. The release, timed alongside a major AI speech from Chinese President Xi Jinping at Shanghai’s World AI Conference, was significant enough to weigh on Nasdaq chip stocks on Friday (TechCrunch).

The practical takeaway for Dhaka teams: open-weight models that are genuinely close to frontier quality change the cost calculus for routine document processing, drafting and coding support. It’s worth benchmarking a model like K3 against whatever your team currently pays for before the next licence renewal — while keeping in mind that open Chinese models raise their own data-handling and governance questions that are worth thinking through carefully before routing sensitive business data through them.

ORAWEK Note

Notice how today’s front page has a deadline in it for the first time in a while — December for board approval, February for the first tranche. That specificity changes the conversation: reform stops being a vague aspiration and starts being something with a calendar attached. What strikes me most is that the smallest item today, a Tk25,000 cut to a car allowance, is actually the most legible signal of intent — it’s the kind of unglamorous move that either continues into the harder reforms or quietly stops. I’ll be watching which one it is.

— Refat, Sunday morning, Dhaka

ORAWEK — ভোরের সংক্ষেপ (The Morning Brief) is Dhaka’s free daily business and economy digest, published every weekday at 8:00 AM. Read the full brief at orawek.com/daily-brief or subscribe on WhatsApp.