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Treasury bill yields for all three tenures fell below the policy rate today (1 March) as liquidity in the banking sector improved significantly.

The yields on 91-day, 182-day, and 364-day treasury bills dropped to 9.90%, 9.98%, and 9.93%, respectively, according to the latest auction results. Just a week earlier, the yields stood above 10%, with the 91-day bill at 10.02%, the 182-day bill at 10.11%, and the 364-day bill at 10.07%.

Treasury bills are short-term government debt instruments issued for periods ranging from 91 days to 364 days.

The decline reflects a surge in liquidity across the banking system. Call money rates have also dropped by around 40 basis points between January and March this year.

Mohammad Ezazul Islam, director general of the Bangladesh Institute of Bank Management, said the fall in yields was mainly driven by two factors.

“The central bank has been purchasing foreign exchange reserves from commercial banks through auctions. As a result, liquidity has flowed back into the banking system,” he said.

According to Bangladesh Bank data, the central bank has purchased $5.39 billion from commercial banks through auctions so far in the current fiscal year.

Ezazul Islam added that slower private sector credit growth was another major reason behind the increased liquidity.

Bangladesh Bank’s latest data shows private sector credit growth stood at 6.03% in January.

A deputy managing director of a private bank said the “excess liquidity” in the banking sector has pushed treasury bill yields lower, noting that central bank dollar purchases have injected additional funds into the banking channel.

He also said deposit growth has strengthened liquidity conditions, as rising deposits increase banks’ available funds.

Another deputy managing director said government borrowing demand has declined recently, partly due to slow implementation of the Annual Development Programme (ADP), further contributing to the fall in treasury bill yields.

https://www.tbsnews.net/economy/treasury-bill-yields-fall-below-10-amid-rising-banking-liquidity-1374536

Bangladesh expanded its footprint in the United States apparel market to 10.53 percent in 2025, up from 9.26 percent a year earlier, as American buyers shifted orders away from China, according to official data.

US retailers and brands imported garments worth $77.88 billion from across the world last year, according to the Office of Textiles and Apparel (OTEXA) under the US Department of Commerce.

Of that total, Bangladesh supplied $8.20 billion, strengthening its position as the third-largest apparel exporter to the US market.

In 2025, Vietnam emerged as the largest garment exporter to the American market, overtaking China. It shipped readymade garment items worth $16.74 billion, capturing a 21.50 percent market share.

China, which led the market in 2024 with a 20.83 percent share, saw its position weaken abruptly. Its share fell to 13.66 percent in 2025, with exports totalling $10.64 billion, according to OTEXA data.

China’s decline is largely linked to punishing tariffs imposed by US President Donald Trump last year.

The United States is the largest single-nation export market for Bangladeshi apparel items. Bangladesh’s performance in the American market marks a steady recovery and gradual expansion over the past few years.

Its market share stood at 9.37 percent in 2023 and 9.74 percent in 2022. The figure dropped to 8.76 percent in 2021 as exports were hit by the severe fallout from the Covid-19 pandemic.

The latest gain signals growing demand for Bangladeshi garments in the US market at a time of shifting sourcing strategies among global brands.

Industry leaders expect further growth if trade conditions remain favourable. The Trump administration has lowered the reciprocal tariff to 10 percent after a US court ruling, a move that could ease cost pressures in the US market.

“The lowering of the tariff will reduce the prices of commodities in the American markets, and the buyers will purchase more commodities such as garment items and ultimately the supply of locally made garments to the American market will grow in future,” said Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

https://www.thedailystar.net/business/economy/news/bangladeshs-share-us-apparel-market-rises-1053-4115086

A high-level delegation from the International Monetary Fund is due in Dhaka next month for talks with Prime Minister Tarique Rahman, as Bangladesh hopes to keep its multi-billion-dollar loan programme on track and unlock a delayed $1.30 billion disbursement.

Highlights: TBS

A three-member IMF team will visit on 9-10 March and will be led by Krishna Srinivasan, director of the Fund’s Asia and Pacific Department, according to finance ministry officials.

The IMF withheld a tranche last December during the interim administration, saying further disbursements will follow discussions with an elected government.

Officials at the ministry believe that if discussions with the IMF prove fruitful and the BNP government commits to implementing agreed conditions, Bangladesh will receive $1.30 billion by June, combining the pending December tranche with the next scheduled instalment.

They said the funds would help address the government’s budget deficit at a time when revenue collection growth has slowed.

Following receipt of a formal letter from the IMF, the Economic Relations Division (ERD) has written to Principal Secretary ABM Abdus Sattar requesting that a one-hour meeting slot be allocated for the prime minister on either 9 or 10 March.

In a letter dated 23 February, the ERD said the IMF intends to meet with the prime minister to discuss and review the progress of reforms undertaken under its programme, assess their successful completion, and reaffirm continued cooperation with the new government.

A senior finance ministry official, speaking on condition of anonymity, said key IMF conditions – including revenue mobilisation targets – have not yet been met.

Other pending issues include the restructuring of the National Board of Revenue (NBR), ensuring greater independence for the Bangladesh Bank, and fully adopting a market-based exchange rate.

However, the official noted that the BNP, both in its election manifesto and after forming the government, has pledged to advance economic reforms, establish an Economic Reform Commission, abolish the Financial Institutions Division to strengthen Bangladesh Bank, and continue financial sector reforms.

One of the IMF’s major conditions is reducing subsidies while expanding social safety nets. The new finance minister, Amir Khosru Mahmud Chowdhury, has already instructed officials to explore ways to rationalise subsidies, the official said.

The government has also prioritised expanding social protection coverage, beginning with the distribution of family cards. Recently, the finance minister also assured the central bank governor that ongoing banking sector reforms will continue.

“If the BNP implements its manifesto commitments, many IMF conditions will be fulfilled. On that basis, the government is waiting with a positive outlook to keep the IMF programme on track,” the official said.

The IMF loan programme

Bangladesh signed a $4.7 billion loan agreement with the IMF on 30 January 2023, amid economic strain triggered by the Covid pandemic and the Russia-Ukraine war.

The programme included conditions such as revenue reform, banking sector restructuring, and subsidy reduction. The IMF later extended the programme by six months in June last year and added $800m, bringing the total package to $5.5 billion.

So far, Bangladesh has received $3.64 billion under five tranches: $476.3 million in February 2023, $681 million in December 2023, $1.15 billion in June 2024, and $1.33 billion in June 2025. That leaves $1.86 billion yet to be disbursed.

The IMF had been due to release another tranche last December but withheld it pending discussions with an elected government.

At the IMF-World Bank annual meetings in Washington last October, the lender informed then finance adviser Salehuddin Ahmed and Bangladesh Bank Governor Ahsan H Mansur that the next disbursement would follow talks with the elected administration.

After the IMF decided not to release a loan tranche, Salehuddin said in November that the Fund would also discuss how much loan support the elected government intends to seek.

What economists think about the visit

Zahid Hussain, former lead economist at the World Bank’s Dhaka office, told TBS that the visit reflects the IMF’s earlier position that future decisions would follow talks with an elected government.

He noted that the interim administration did not reissue the Bangladesh Bank Order and that the NBR split remains incomplete.

“Although Bangladesh Bank has said the exchange rate is market-based, the IMF has raised questions about the way it is purchasing dollars from the market. This is inconsistent with a contractionary monetary policy and has injected Tk65,000 crore into the market,” he said.

The IMF may emphasise these issues during discussions, he added, and the government will need to demonstrate commitment to reform.

Towfiqul Islam Khan, additional director (research) at the Centre for Policy Dialogue (CPD), said most IMF reform demands align with the BNP’s election manifesto. 

However, he noted that the IMF had raised concerns in January over Bangladesh’s debt sustainability, an issue not detailed in the party’s manifesto.

He described banking sector reform as the government’s biggest challenge under IMF conditions. While the BNP has pledged to return funds to depositors of troubled banks, it has not clarified whether repayments would cover only individual customers or institutional clients as well.

The IMF has also sought greater independence for the Bangladesh Bank. The new finance minister’s proposal to abolish the Financial Institutions Division and strengthen the central bank could address that demand.

Subsidy management will remain another major challenge, economists say, given its links to gas and electricity pricing as well as export incentives.

“The IMF does not provide very large sums per tranche,” Towfiqul said. “But other development partners’ budget support is often linked to an active IMF programme. If the programme continues, others are more willing to lend.”

He added that while many IMF-backed reforms align with domestic policy priorities, the government should seek technical support from the Fund and implement reforms in line with Bangladesh’s own context.

https://www.tbsnews.net/economy/imf-team-hold-march-talks-pm-tarique-next-loan-tranche-1370496