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MONDAY, 12 MAY 2026
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Bangladesh Business & Economy
Finance Minister breaks with IMF — "conditions not suitable for our economy or our people"
Finance and Planning Minister Amir Khosru Mahmud Chowdhury made Bangladesh's most direct public confrontation with the IMF on Sunday, saying the conditions attached to the ongoing $4.7 billion loan programme are "not suitable for Bangladesh's economy or its people." Speaking at a Bonik Barta discussion on rebuilding the economy amid global instability, he said the government cannot comply with all IMF demands because "we are an elected government and remain accountable to the public." The minister did not elaborate on which specific conditions are being rejected, but the IMF's three core demands — full removal of tax exemptions and subsidies, and a market-based exchange rate — all carry direct cost-of-living implications. Talks are ongoing and may continue for 15–20 more days, he said. The IMF has already blocked the combined $1.3B fifth-sixth tranche due by June, leaving Bangladesh with $1.86B uncollected before the programme expires in January 2027. Separately, Bangladesh Bank is simultaneously buying dollars from commercial banks — purchasing $45 million on Sunday at Tk 122.75 — to keep reserves from slipping further after the $1.51B ACU payment on May 7.
Bangladesh's banking crisis deepens on three fronts — former directors may return, Islami Bank's bad loans hit Tk94,322cr, owners seek NPL cap relaxation
Three simultaneous developments yesterday paint a worsening picture of Bangladesh's banking sector. First, the Bangladesh Association of Banks (BAB) formally warned BB Governor Mostaqur Rahman that the Bank Resolution Act 2026 creates a legal pathway for former owners — including those who allegedly looted banks — to return by paying just 7.5% upfront of government funds injected, with the remaining 92.5% paid over two years. BAB chairman Abdul Hai Sarker said: "People know who took money from the banks. If they are allowed to return, public confidence will weaken further." Five former directors of Social Islami Bank have already applied to reclaim it. Second, Islami Bank Bangladesh disclosed that its classified loans surged 44% to Tk94,322 crore in 2025 — the highest bad loan volume ever recorded by a single Bangladeshi bank, representing 51% of its total portfolio and 17% of the entire sector's NPLs. Its provision shortfall is Tk84,615 crore; without BB forbearance, its actual loss would have been Tk84,507 crore. Third, the BAB simultaneously wrote to BB requesting the NPL eligibility cap for refinance schemes be raised from current levels to 20% and general provisioning for rescheduled loans be cut from 5% to 1% — moves that would ease access to cheap credit for high-NPL banks at the cost of tighter safeguards.
Sources: TBS — "Bank owners fear return of former directors," May 11, 2026 · TBS — "Islami Bank's bad loans soar 44% to record Tk94,322cr," May 11, 2026 · TBS — "Bank owners seek refinance liquidity support by easing 20% NPL cap," May 11, 2026 · The Daily Star — BAB opposes former owner return, May 12, 2026
Bangladesh Bank launches commercial e-Loan framework — Tk50,000 cap, 100% digital, no branch visit required
Bangladesh Bank issued comprehensive guidelines on Sunday for the commercial launch of "e-Loan" by all scheduled banks — a 100% end-to-end digital lending product covering onboarding, authentication, disbursement, monitoring, and recovery entirely via smartphone, with no physical branch visit. The cap is set at Tk50,000 per borrower for the first year. Interest rates remain market-based; where banks use BB's refinancing facility (BRPD Circular 11/2022), the lending rate cannot exceed 9%. The initiative targets underserved and marginal populations who have been excluded from formal banking. All data must be stored in Bangladesh-based data centres under the Personal Information Security Act, 2026, and the National Data Protection Act, 2026.
Sources: Dhaka Tribune — "e-Loan facility opens up," May 11, 2026 · BSS — BB guidelines for commercial e-Loan launch, May 11, 2026 · The Daily Star — "Banks cleared to launch e-loan up to Tk50,000," May 12, 2026
📌 Opinion Watch — FY27 Budget Debate (Financial Express)
On tax burden: With April inflation rising back to 9.04%, business chambers are pressing the NBR to raise the tax-free income threshold from Tk3.75 lakh to Tk5 lakh in the FY27 budget. Experts argue Bangladesh should move toward a family-based taxation model — one that accounts for dependent children, elderly parents, and unemployed siblings — rather than taxing individual gross income alone. [FE Opinion, May 9, 2026]
On package VAT: The government is reportedly considering reintroducing "package VAT" — a fixed annual VAT for small retail traders abolished in 2019. A Financial Express analysis argues the move is unnecessary: traders with annual turnover below Tk30 lakh are already VAT-exempt under current law. Package VAT's peak contribution was only Tk238 crore/year (FY2016) — a rounding error against total VAT collections. The real case is for better enforcement, not a new regime. [FE Opinion, May 9, 2026]
Economy Watch
Data Point or Policy Update
USD / BDT
122.75 ৳
BB interbank purchase rate · 11 May 2026 · +45 paisa from 122.30 (Apr 15)
DSEX (last close, 11 May)
5205.26 pts
▼ -15.68 pts · -0.30039% · Last update 11 May, 2:30 PM
Gold 22k / Bhori (BAJUS)
২,৪৪,৭১১ ৳
Effective 7 May · Unchanged through 12 May
Inflation Rate (Apr '26, BBS)
9.04%
▲ Rising again — up from Mar's 8.71% · Energy & supply chain pressure
Bad Loans (NPL) Dec '25
30.60%
▼ Down from 35.73% peak (Sep '25) · via rescheduling · Islami Bank alone: 51%
GDP Growth FY26
3.9–4.7%
WB: 3.9% · ADB: 4.0% · IMF: 4.7% · FY25 actual: 3.49%
Global Signal
Overnight — What Reaches Dhaka by Monday Morning
| Brent Crude TradingEconomics · Live, 12 May 2026 | $104.97/bbl ▲ +0.73% today · +5.65% past month · +57.54% vs year ago · Trump called Iran's peace response "TOTALLY UNACCEPTABLE" Sunday — Hormuz closure now entering 11th week. Saudi Aramco CEO: market losing ~100 million barrels/week |
| WTI Crude TradingEconomics · 11 May close | $98.71/bbl ▲ +3.45% Monday · Jumped over $97–99 range after Trump rejected Iran's proposal · US gasoline now averaging $4.52/gallon (AAA) · Trump announced temporary suspension of federal gasoline tax |
| Strait of Hormuz TradingEconomics / IMO · 12 May | Effectively closed · 11th week · Drone attacks struck cargo vessel near Qatar Monday · UAE and Kuwait intercepted hostile drones · ~20,000 seafarers stranded · IEA: largest supply shock on record. Full recovery 90–120 days minimum even if deal reached today |
| Iran War / Ceasefire Yahoo Finance / CNBC · 11 May 2026 | Ceasefire on "massive life support" — Trump on Truth Social Sunday: "TOTALLY UNACCEPTABLE!" Iran offered to transfer enriched uranium to third country but refused to dismantle nuclear infrastructure. Netanyahu: "conflict with Iran is not over." No deal |
| IEA / Saudi Aramco IEA / Aramco CEO via TE · May 12 | IEA: largest oil supply shock on record · Saudi Aramco CEO Amin Nasser: market losing ~100M barrels/week · Prolonged disruption could delay normalization to 2027 · Refined product shortages sharpest in South Asia |
| Wall St (11 May close) CNBC · 11 May 2026 | S&P 500 +0.19% → 7,412.84 (new record) · Dow +0.19% → 49,704.47 · Nasdaq +0.1% → 26,274.13 (new record) · Copper hit record close at $6.46 · 10Y Treasury yield rose to 4.41% · Stocks rose despite oil +3% and ceasefire collapse |
| US CPI — Today BLS · Tue 12 May, 8:30 AM ET | April CPI releases TODAY 8:30 AM ET · March CPI: 3.3% YoY · Consensus forecast: 3.7% YoY, +0.6% MoM · Core forecast: +0.4% MoM · S&P Global chief economist forecasts 5% headline CPI for full 2026 · Result will set tone for Warsh's first week as Fed chair |
| US Fed Rate Federal Reserve · Apr 29, 2026 | 3.50–3.75% · Held Apr 29 (3rd hold; historic 4-dissent vote) · Kevin Warsh takes over Thursday May 15 · Market assigns 45% chance of no cuts all of 2026 · BofA: no cuts until H2 2027. CPI today is the key input |
| Trump → China Today Yahoo Finance · 12 May 2026 | Trump begins China trip today — meeting Xi Jinping · 16 executives invited including Elon Musk and Tim Cook · Agenda: technology, rare earths, trade · Could shift US–China tariff trajectory. BD exporters watching closely for any tariff relief signal |
| Bitcoin Yahoo Finance · 12 May AM | $82,227 ▲ +1.95% · VIX at 17.19 · Recovering from $80K floor. Down 7.2% YTD and 22% over past year despite recent rebound |
| US–China Trade Yahoo Finance · 12 May 2026 | US tariffs on China ~45% · Trump–Xi summit today in Beijing · BD RMG ranked #2 US apparel supplier but captured zero incremental Q1 share from China's exit · Vietnam and Cambodia are winning that race |
| BD–US Tariff US Embassy Dhaka · May 4 | 19% base rate · ART implementation talks completed May 5–7 · Trump appealed May 8 against court ruling on Section 122 tariff — if appeal fails, BD exporters may claim refunds on 10% tariff paid since Aug 2025 |
| India–BD Relation Daily Star / ADB | India supplying diesel via pipeline amid LNG shortage · BD seeking $3B additional ADB budget support for energy overruns · Trump's gas tax suspension in the US may reduce global refined product pressure marginally |
| Asian Markets TradingEconomics · 12 May AM | Tracking Wall St record close; crude +3% Monday a headwind · Japan Nikkei near record highs on AI earnings · Copper at record $6.46 signals strong industrial demand · US–China summit today is a key catalyst to watch |
| Israel–Lebanon Yahoo Finance / Reuters · 11 May | Iran's foreign ministry linked Lebanon ceasefire to broader Iran deal conditions — Hormuz, sanctions, frozen assets. Netanyahu: "not over." Lebanon track stalled pending Iran resolution |
| Saudi / RMG YTD Aramco / TradingEconomics · 12 May | Saudi Aramco warning: market losing 100M barrels/week — "normalization could slip to 2027" · Iraq offering steep Hormuz-transit discounts · BD garment YTD tracking strong on China diversion despite Q1 share miss |
AI This Week
Practical Intelligence — Never Hype
For Your Work
Bangladesh Bank's e-Loan framework — launched yesterday — opens a lane for AI-powered credit scoring to finally work in Bangladesh. The directive requires fully digital onboarding and allows banks to use alternative data sources for creditworthiness assessment, not just traditional CIB reports. For fintech founders, bank product teams, and credit analysts in Dhaka: this is the signal to build. The Tk50,000 cap and 9% rate ceiling are modest for now, but the legal and regulatory foundation is in place. The practical move this week: if you are in financial services or fintech, read the BB circular (BRPD) and identify the data sources your institution already has that could serve as scoring inputs — mobile recharge history, MFS transaction records, utility payments. The framework rewards those who move first.
ORAWEK Note
A Real Observation. From a Real Person.
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Monday night in Washington, Trump posted "TOTALLY UNACCEPTABLE" on Truth Social after reading Iran's peace proposal. Oil hit $105. Stocks still closed at record highs. That contradiction is the sentence that defines this market right now. Here in Dhaka this Tuesday morning, Brent is at $104.97 — up 57% from a year ago. Bangladesh's Finance Minister publicly says the IMF conditions are not suitable for our people. He may be right. But Islami Bank just disclosed Tk94,000 crore in bad loans. The same morning that he pushed back on IMF conditionality, Bangladesh's own banking association was writing to the central bank asking for the NPL cap to be relaxed. You cannot hold both of those positions simultaneously and expect anyone to take the reform commitment seriously. Today two things happen at once: the US April CPI prints at 8:30 AM Eastern — forecast 3.7% — and Trump lands in Beijing to meet Xi. Both events will move markets that directly affect Bangladesh's export economics and energy cost. Watch both.
— Founder · Monday morning · Dhaka