La Semaine Dernière A Mes Yeux

(25 juillet --- 31 juillet)

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Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
25	Pain,Yardlong beans,Œuf	Riz,Purée de sésame, Purée de feuilles de Moringa,Sec ruban avec haricot rouge et graine de jaque	Riz,Sec ruban avec haricot rouge et graine de jaque	Riz gonflé,Pois chiches ,Tchanatchur
26	Pain,Pomme de terre	Riz, Latya poisson, Sec ruban avec haricot rouge,Feuilles de taro	---	Riz gonflé, Pois chiches,Tchanatchur,«Pianju»,«Tchop»
27	Pain,Pomme de terre,Œuf	Riz,Poulet,Feuilles de taro,Courge amère,Sec ruban avec haricot rouge	---	--

Empire Of Football

A navigating star called football Connects cultures and mesmerizes all.

FIFA World Cup 2026,the greatest show on Earth,was over. Euphoria surrounding it subsided. But bondage,passion and connections the festival created do not wither away. This year too Bangladeshi football fans stole the show and became news items of world media. Rooftops in Bangladesh decorated with flags of Latin American countries. Fans from all walks of lives donned jerseys of Brazil,Argentina, Portugal and Spain. And their love did not go unrecognized! Brazil has an embassy here long before the Qatar World Cup 2022. After the World Cup 2022,Argentina reopened its embassy, which was closed back in the 80's, in Dhaka to show solidarity with the Bangladeshi football fans. Travel bloggers of both the countries visited the two countries and made special vlog on football love. In Bangladesh, Argentina, Brazil, France and US ambassadors acknowledged football love of the Bangladeshis before the press.

Just after the 2022 World Cup ,I wrote a piece titled "Latin America's Asian Colony" ,published here on December 23,2022, where I argued the crazy euphoria for football should have some meaning to know(see https://hoquestake.blogspot.com/2022/12/latin-americas-asian-colony.html?m=1). Bilateral trade with the South American countries grew manifolds in the last 5 years. But Brazil is way ahead of Argentina and dominates the bilateral trade with Bangladesh. In 2021,Bangladesh imported $1.74 billion worth of goods from Brazil and exported $90 million worth of goods to the country. In 2025, Bangladesh's import from Brazil grew to $2.64 billion and Bangladesh's export to the country grew to $190 million. Meanwhile, in 2021,Bangladesh [imported] $620 million worth of goods from Argentina and exported $10 million worth of goods to the country. In 2024, import from Argentina grew to $780 million and export to the country increased to $20 million.Bangladesh imports mostly sugar,cotton,oilseeds, wheat etc from Brazil. Meanwhile imported items from Argentina includes mostly soybean, sunflower oil,wheat, corn etc. Bangladesh mainly exports RMG, leather, leather goods,footwear etc to these countries (see "Argentina'r Cheye Brazil Egiye(Argentina Way Ahead of Brazil)", Shafiqul Islam,Daily Prothom Alo,p-6,June 28,2026).

This world cup also witnessed how ticket prices of [a] match varied with popularity and interest to the match. Resale opportunity and more interest to a particular match drove prices of ticket up. This dynamic pricing plus sponsorships and other fees swelled FIFA's revenue to $15 billion. FIFA plans to spend part of the revenue behind football associations of the poor countries.

Apart from revenue, no other sports generates so much pride and prestige. Besides the 2 million people gathered in Madrid to celebrate the return of the champions, hundreds of thousands of people descended into streets to welcome their football heroes in Cabo Verde,Egypt,Norway and other parts of the world. In Norway, Parliament and the Army performed viking row in solidarity with the Norwegian football team. Former UK prime minister Keir Starmer announced to call a day public holiday if England would win the world cup. Belgian Parliament asked for a probe on President Trump's alleged intervention in cancelling red card against US footballer Balogun. UK complained to FIFA,which do not allow political manifestation,about Argentine team's display of messages about Falklands. President Trump requested FIFA,according to some news reports,to host again the Football world cup in the US soil in near future discarding Canada and Mexico. In Bangladesh, during President Ershad's time, Parliament passed a bill denouncing referee's action against Argentina! I do not know any other sport that causes this much upending reaction at the national and international level.

This world cup is no short of interesting things. "Promise","Providence","La Margarita" are names of few players. I think in future world cups, we may see "Patience","Perseverence","Joy","Victory" will run on the football pitch! Kids barely know what football is perform victory moves of CR7,know Mbappé! Peruvian parents of the newborns are naming their children after the name of Scandinavian football star [Haaland] whom I thought a tall white came all the way from another world to help Norwegians win their first world cup! Local Bangla press is full at what [Haaland] ate daily: 4 scrambled eggs,yogurt, beef steak,chicken and many more things. God must be crazy that a Texan raccoon(stuffed) chased Braut [Haaland] all the way to Norway. Argentina brought 500 kg of Argentine beef to feed their players in the USA. A 400-foot long jersey is flying over the head in some neighborhood of Dhaka. Argentine footballer Antonino Rattín was behind the incident that saw introduction of yellow card and red card in football.

Despite so many goals, I think the pace of the match is held back by offside rules. In cricket, people go to field to see six and four are being scored at regular intervals. To make the sport more popular, International Cricket Council changed restrictions on field settings, introduced shorter version of the game. Nowadays T20 sees more sixes and fours. Similarly in football, people go to the field to watch more goals being scored. To make that happen, setting the number of offside is a must. Say, each side can have at most two offsides in a match. Number of player can present before the D-box can also influence the game. At the same time,making the game shorter will make the game more popular.30 minutes for each half and 15 minutes for extra time will seal the fate of the game in 1 hour 15 minutes instead of current 120 minutes!

Currently, China,India,Bangladesh, Pakistan, Indonesia do not play at the world cup stage. They are half of the world's population and their economies matter a lot. It is indeed a good news that FIFA is contemplating to increase the number of participating countries from 48 to 64. If that happens, then these countries will have greater chance to play in the world cup. Shorter version of the game will increase that chance even more.

Football is bigger than Olympic! No other sport draws this much crowd,causes this much sensation. It has a language and appeal that cross border and culture.In galaxy [Milky Way] if there is a planet called earth, then it has only one popular sport. It is called football.

La Semaine Dernière A Mes Yeux

(18 juillet --- 24 juillet)

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Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
18	Pain,Gourde serpent,Œuf	Riz,Latya,Épinard malabar,Soupe aux lentilles	---	Mangue,«Chapli pitha»
19	Pain,Œuf	Riz, Petit poisson, Purée de sésame, Purée de feuilles de coriandre	Pois chiches,Riz gonflé	Mangue
20	Pain,Œuf	Riz,Gobie aux yeux barrés,Purée de graine de jaque,Purée de sésame,Soupe aux lentilles	Pois chiches,Riz gonflé	Mangue,Jaque
21	Pain,Œuf	Riz,Latya poisson, Purée de sésame, Épinard malabar,Soupe aux lentilles,Tige de taro avec graines de jaque	---	Mangue,«Sondesh»,Jaque
22	Pain,Œuf	Riz,Gobie aux yeux barrés,Tige de taro avec graine de jaque,Gourde blanche,Soupe aux lentilles	Cacahouète,Riz gonflé	Goyave
23	Pain,Pomme de terre	Khichuri,Poulet	Riz,Sec ruban poisson avec graine de jaque	Mangue,«Sondesh»
24	Pain,Gourde blanche,Œuf	Riz,Sec ruban avec graine de jaque,Purée de feuilles de moringa,Purée de sésame,Soupe aux lentilles	---	Mangue,«Sondesh»,Riz gonflé,Tchanatchur

Apparel Export Faces New Challenge

Bangladeshi apparel export loses market share, Exposing weakness that labor query just lays bare.

Data divulged by WTO revealed that Bangladesh gains little in RMG export from the tariff debate. Bangladesh registered a growth of only 0.89% in apparel export in 2025. Vietnam registered 10.53% growth. While Cambodia posted a growth of 16.88%, Pakistan, Indonesia and India recorded growth of 6.83%, 5.79% and 5.47% respectively (see "Bangladesh posts 0.89% apparel export growth in 2025, lowest among Asian rivals: WTO", The Business Standard,July 13,2026,https://www.tbsnews.net/economy/rmg/bangladesh-posts-089-apparel-export-growth-2025-lowest-among-asian-rivals-wto-1487416).

China's market share of global apparel exports fell from 31.71% to 27.35% since 2021. The country is subject [to] severe tariff from the Trump administration. Bangladesh's total RMG export stood at $38.82 billion in 2025. Despite the fact that Bangladesh retains 2nd position in the US market, Bangladesh ceded market share to rivals like Vietnam and Cambodia. This is an worrying development.

Recently, USTR opens an investigation on 60 economies in the issue of forced labor. Traces of forced labor could land Bangladesh facing tariff up to 12.5% (see "US announces new tariffs over forced labour concerns",Mitchell Labiak,BBC News,3 June 2026,https://www.bbc.com/news/articles/cq6pe7nvldmo). Bangladesh is still reeling from the reciprocal tariff (19% for Bangladesh) while the forced labor related punitive tariff has the potential to augment the tariff burden.

If this punitive tariff really comes into effect, Bangladesh's apparel market share may further shrink. In addition, erosion of export earning resulting from the punitive tariff may worsen the current account balance. Any export loss amid austerity measures will pose severe challenges to macroeconomy including pressure on the exchange rate of Taka.

One of the domestic way to confront this challenge is to depreciate the currency. But look at the sheer size of the tariff, 12.5%. Depreciation of this magnitude will not pose serious problem to the economy but could aggravate the inflationary pressure by increasing the prices of imported goods, which is not a priority for the govt. So depreciation of Taka by 12.5% is not compatible with the economic priorities of the govt. However, a 2% or 3% depreciation will not bring that much pressure.

Forced labor related tariff already casts shadow over govt's employment creation goals. Govt envisages to create 2.5 million jobs through the central bank led stimulus package. At the heart of this stimulus is reopening of [closed] garment factories. Many of which are small in size and survive on subcontracting. Further labor related compliance will strain the production cost of the factories and many simply cannot comply with the new standards. Moreover, punitive tariff may shrink work order and thereby shrink future subcontracting opportunities for these factories.

While Bangladesh is still coping with the ensuing situation from reciprocal tariff, forced labor related investigation puts its apparel export share into precarious situation. This new challenge even threatens govt's job creation goal. Depreciation of Taka, to some extent, may mitigate the adverse effects.

La Semaine Dernière A Mes Yeux

(11 juillet --- 17 juillet)

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Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
11	Pain,Yardlong beans,Œuf	Tehari rice	---	Datte,Riz gonflé
12	Pain,Yardlong beans,Œuf	Riz, Latya poisson, Citrouilles et Papaye	---	Mangue,Pomme, Datte
13	Pain,Citrouilles et papaye,Œuf	Riz,Haricot rouge avec sec ruban	Riz,Haricot rouge avec sec ruban	Puri
14	Pain,Yardlong beans,Œuf	Riz,Haricot rouge avec sec ruban,Crevettes,Latya	Lait,Riz gonflé	Mangue,Puri
15	Pain,Yardlong beans,Œuf	Riz,Haricot rouge avec sec ruban,Aïr poisson,Yardlong beans	---	Mangue,Riz gonflé
16	Pain,Citrouilles et papaye	Riz, Aïr poisson,Épinard d'eau,Soupe aux lentilles	Riz gonflé	Mangue
17	Pain,Poulet	Riz,Gourde serpent,Latya,Soupe aux lentilles	---	Mangue,Gâteau,Sambosa du fromage,Sondesh

Weakening Of Taka: When Desirable

Competitiveness through depreciation, Desirable when there is less inflation.

For the major part of the FY 2026,Taka remained stable against the USD. There is an overall balance in the Balance of Payment. And foreign exchange reserve is continuously increasing. Till June 2026, forex reserve stood at $31.74 billion. According to MPS, reference exchange rate was Tk 123.18/USD in June 2026,registering 0.39 % depreciation in FY 2026.

The depreciation rate is decent. But further weakening of Taka could be good for economy. Inflation is the obstacle in the path of major depreciation. Inflation in June was 9.14%, a slight decrease from 9.42% in May 2026. A larger depreciation may aggravate the inflation.

Export and remittance are the two sectors that enjoy greater benefit of depreciation. But the two jointly account for around 16% of GDP. Meanwhile, dollars earned and received go for paying up the import bills and foreign debt repayments. Our import was $61 billion in 2025 and external debt was around $112 billion (source: Wikipedia). They jointly account for 33.92% of GDP. Crux of the matter is sectors benefitted from large depreciation of Taka account lesser percentage of GDP than sectors affected by such depreciation. Large depreciation may spike the imported inflation and increase our debt service payment in Taka amount.

But depreciation is related to export competitiveness. So when competitiveness is top priority depreciation is the way. Vietnam, where export accounts for 90% of GDP, witnessed around 0.11% depreciation of its Dong in the first six months in 2026. Since a communist regime is in charge of running the country and export accounts for a huge percentage of GDP, Vietnam is in a comfortable position to use its currency to increase its export competitiveness.

Even India witnessed 10% depreciation of Rupee in one year and large part of it happened in the first six months of 2026. In India, export and remittance jointly account for 23.97% of GDP while import and external debt jointly account for 41.95% of GDP.

I think slow and gradual depreciation is ok for our economy. 1% or 2% depreciation will not aggravate the inflation that much. Regular intervention of the central bank,therefore, in the forex market is necessary. According to MPS,in FY 26,central bank spent $6.43 billion in forex market intervention.

Steady flow of remittance and BB's intervention translated into 0.39% depreciation of Taka. This is why central needs to hold lots of Taka. That is why it is not right to use central bank's money in other purposes, particularly in meeting political pledges. Central bank plans to spend Tk 19000 crore of its money as part of stimulus package. Central bank needs money to emergency intervention and that is why its money should be untouched.

Use of local currency to boost export competitiveness is indeed good for the economy. Timing and priority are the two factors that influence the decision regarding the depreciation. Since fuel price is rising amid high inflation at the local market, this is not high time for big depreciation. However, central bank's intervention ,which requires huge amount of money at its disposal, in the forex market at right time can thwart any appreciation pressure on Taka and ensure export competitiveness.

La Semaine Dernière A Mes Yeux

(04 juillet --- 10 juillet)

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Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
04	Tehari rice	Riz,Soupe aux lentilles,Èpinard Malabar ,Petit poisson, Tige de Taro avec graine de jaque	---	Puri,Mangue, Roll
05	Pain,Papaye bhaji	Riz,Soupe aux lentilles,Èpinard Malabar ,Petit poisson, Tige de Taro avec graine de jaque,Crevettes	---	Mangue,Coconut, Puffed rice,Sondesh
06	Pain,Papaye,Sondesh	Riz,Vigna mungo soupe, Petit poisson, Tige de Taro avec graine de jaque,Crevettes	---	Mangue,Riz gonflé,Lait,Sondesh
07	Pain,Pois blanc,œuf	Riz,Soupe aux lentilles, Gourde blanche,Crevettes	---	Mangue,Lotkon
08	Pain,Papaye,Jaque	Riz,Soupe aux lentilles, Petit poisson,Purée de pomme de terre,Crevettes	---	Mangue,Riz gonflé,Lait,Puri,Lotkon
09	Riz,Crevettes,Papaye	Khichudi,Poulet	Khichudi,Poulet	Mangue,Lotkon,Pomme,Goja
10	Pain,Papaye	Riz,Poulet,Petit poisson,Papaye	---	Mangue,Riz gonflé,Pomme,Vermicelles, Goja

La Semaine Dernière A Mes Yeux

(27 juin --- 03 juillet)

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Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
27	Paratha,Papaye	Riz,Papaye,Soupe aux lentilles,Potato bhaji,Ruhi,Crevettes	Pain,Potato bhaji	Muraly
28	Bread,Potato bhaji	Riz,Yard long beans,Mouton,Soupe aux lentilles,Ruhi	---	Muraly,Nouilles,Mangue
29	Pain,Yard long beans	Riz,Yard long beans,Latya poisson,Soupe aux lentilles,Ruhi	Puffed rice,Lait	Muraly,Mangue
30	---	Riz,Gombo,Pabda ,Soupe aux lentilles,Ruhi	Puffed rice,Lait	Jaque,Mangue
01	Pain,Yard long beans,Œuf	Riz,Yard long beans,Pabda ,Soupe aux lentilles,Crevettes	Puffed rice,pois chiches	Jaque,Mangue
02	Khichudi,Œuf	Tehari rice,Crevettes	---	Banane,Mangue
03	Pain,Modhubhaat,Œuf	Riz,Pabda ,Soupe aux lentilles,Épi nard malabar	---	Banane,Mangue

MPS Highlights Opposing Goals

Opposing tasks are being done by the central bank, Missing the targets is the assessment frank.

Bangladesh Bank(BB) has unveiled the Monetary Policy Statement (MPS) for the first half of FY 2027.Amid high inflation, BB keeps the policy rate same at 10%. Meanwhile, Standing Lending Facility (SLF) stays at 11.5% and Standing Deposit Facility (SDF) remains at 7.5%.

One of the key aspects of this MPS is outlining medium and long term ways to deal with the Non Performing Loans(NPLs). BB is planning to write-off bad debts with poor prospects of recovery and thereby improving the absolute figure of the NPLs. Another strategy is to introduce Expected Credit Loss(ECL) ,which takes into account probability of default, expected recovery rates and future macroeconomic conditions in forecasting potential loan default. MPS also says BB will fortify Risk-Based Supervision (RBS) and implement bank specific Asset Quality Reviews (AQRs) as part of long term goals to tackle the NPL.Moreover, it is speeding up Money Loan Court proceedings. BB is also preparing the Distressed Asset Management Act so that banks can easily get rid of non performing assets.

These are desperate measures to improve the NPL situation before Bangladesh enters talk with the IMF for a fresh credit package.

BB projects the headline inflation will be 8.9% by December 2026 and 8.6% by June 2027. BB's inflation expectation survey projects the inflation rate will be between 8% and 10% by June 2027. The projected inflation rate is much higher than the desired 7.5% rate.

This projected high inflation set the context for keeping the policy rate high.

MPS projects private sector credit growth of 6.8% and public sector credit growth of 21.8% by December 2026. Declining credit growth for the private sector is attributed to low demand for credit amid high interest rate. Meanwhile, higher public sector credit growth means govt borrowing will be more than before. Any shortfall in revenue collection and/or failure to secure foreign credit will push the govt to borrow more from the banks.

Moreover, govt securities are also becoming safe haven for investors. Outstanding stock of treasury bills and bonds has increased from Tk 7.44 trillion in 2025 to Tk 8.37 trillion in 2026. It is indeed a good news that bond market is expanding. Bad news is govt's interest spending is also rising. Furthermore, too much govt borrowing from banks leaves little for the private sector, which is subject to receive a stimulus package strangely managed by BB.

Despite BB's claim that the stimulus package will not lead to monetary expansion, the designed interest subsidy of Tk 30 billion per year,a total of Tk 90 billion in three years,will inject extra cash into the economy. Most of the big stimulus package came as tax break or huge public spending. This kind of central bank-led stimulus package is unheard of. As it will be highly relevant, sharing again part of my analysis on stimulus package, spelled out in the piece titled "Leave The Central Bank Alone" on May 27,2026:

Finance ministry would be the [just] authority to declare such stimulus package, where political aspiration is more pronounced. Central bank is a regulatory authority that is tasked with overseeing the regulatory discipline and [fine-tuning] its goals to ensure macroeconomic stability. It can extend its support to political govt as long as that support is viable in light of macroeconomic reality. That is why central bank's independence is so important. And central bank's resources are not meant for supporting political goals or electoral pledges.

To accomplish political objectives and to meet electoral pledges, govt has fiscal policy. It can [cut] subsidy here to augment subsidy elsewhere. It can slash tax here to increase tax elsewhere. Central bank can come to aid if existing macroeconomic reality calls for such help.

Inflation is persistently above 9% and so is the inflation expectation.

Former World Bank lead economist to Bangladesh Zahid Hussain called into question relevance of this stimulus package in his article titled "Stimulus in a supply-constrained economy". He argues," The package is framed as countercyclical intervention. That logic works best when an economy is suffering from weak demand,low inflation, and temporarily idle productive capacity. Bangladesh today faces a more difficult combination: growth is slowing while inflation remains elevated and persistent.
In such conditions, additional stimulus does not automatically translate into higher output. If supply cannot respond, it may raise prices faster than production."(see "Stimulus in a supply-constrained economy", Zahid Hussain, The Daily Star, May 23,2026,https://www.thedailystar.net/business/news/stimulus-supply-constrained-economy-4182846)

Instead of going for monetary expansion, govt can opt for fiscal policies through resource reallocation. Recently, platform of steel manufacturers in a press conference urged govt not to raise electricity price. They solicited slashing the subsidy spent on capacity charge for the power plants. This is indeed a good advice that govt must pay heed. The saved subsidy then will be used to refinance closed factories and rejuvenate the rural economy.

Even the banking industry offers alternative solution. Chairman of the Association of Bankers,Bangladesh (ABB), in an interview with the Daily Star said central bank could lower the cash reserve ratio (CRR) to increase liquidity in the market(see "Tk 60000 crore stimulus for private sector"). This is a good advice in this time of inflation. Chinese central bank did similar thing to increase money flow for the private sector amid high inflation.

Banks know their clients well. If the stimulus comes into effect, then it will force good banks with ample liquidity to channel funds to problematic clients of the troubled banks. Despite central bank's guarantee, the [package] pushes good banks to bet on clients whose initiatives may bear risk for the banks.

Central bank itself has poor record in managing its own Equity and Entrepreneurship Fund(EEF),which is full of scams. It will be indeed interesting to watch how transparently and efficiently BB [will] manage such a large pool of fund.

Charging multiple interest rates to different entities has its challenges. Cheap credit may end up [being invested into] treasury bills, which offer safe returns, [compromising] govt's intended goals of increasing production and creating jobs. Or the cheap money may be lent to others at higher rates,further compromising the true objectives.

In brief, central bank is a regulatory body to oversee monetary discipline. Govt can use fiscal tools to fulfill its electoral pledges and central bank can only help in that endeavor if the macroeconomic context is right. The stimulus package has the potential to turn the good banks into bad. Past record of central bank's fund management does not provide room for optimism.

Chance is higher that a large part of the stimulus money may end up in govt treasury bill and bond market. It will increase the broad money growth by increasing the deposit growth and jeopardizing the goal of reopening the closed factories and creating 2.5 million jobs.

The MPS sounds more to convince the multilateral donor institutions than to spell out how to contain the inflation. Accommodating opposing tasks of monetary expansion through stimulus package and bringing the inflation down ,central bank complicated its objectives. It is unclear how the central bank will manage the multiple interest rate regimes it just introduced by taking upon its shoulders these opposing tasks.

Weak Rupee,Strong Yuan And Bangladesh

Bangladesh faces opportunities and challenges When two currencies see major changes.

Opposing trends in the currencies of Bangladesh's two largest trading partners have implications for Bangladesh. In one year, Chinese Yuan appreciated around 5% against the US Dollar(USD) while Indian Rupee depreciated around 10% against USD. China and India are Bangladesh's biggest import sources. In 2024-25,Bangladesh imported $18.19 billion worth of goods from China. Meanwhile,Bangladesh imported $9.69 billion worth of goods from India in the given period. Bangladesh's export to China and India during this time were less than $1 billion and $1.57 billion respectively. Bangladesh faces a combined trade deficit of around $25 billion with the two countries. So exchange rate changes of Yuan and Rupee inevitably influence Bangladesh economy.

Rupee's sharp depreciation was more pronounced in the first six months of this year in the wake of war in the Middle East. Oil price increase raised significantly the import bills,increasing demand for dollar. Inflationary pressure lowered purchasing power of Rupee and made other currencies more attractive. Current account deficit and foreign investors' withdrawal of money from Indian market in a bid to invest in dollar-denominated assets led to large depreciation of Rupee. Fed's decision to not lower the policy rate and uncertainty stemming from war in the Middle East strengthened USD against other currencies (see "Why Is Indian Rupee Falling Against The US Dollar?",Bajaj Finance Limited,June 06,2026,https://www.bajajfinserv.in/usd-vs-inr-why-indian-rupee-falling-against-us-dollar).

Yuan's appreciation is attributed to China's huge external trade surplus, export competitiveness and internationalization of Yuan. Moreover, Chinese capital market is closed and investors cannot invest abroad on foreign stocks in times of uncertainty. So extra wealth generated in the economy gets invested into Yuan-denominated assets.China's diversified energy mix also played a role in the appreciation of Yuan. Recent trade understanding between China and the USA also made the Yuan stronger(see "Global Banks Raise Yuan Forecasts, Fuelled By China's Export Strength And Stable Us Ties", Reuters, May 18,2026,https://www.reuters.com/business/finance/global-banks-raise-yuan-forecasts-fuelled-by-chinas-export-strength-stable-us-2026-05-18/l).

Rupee's 10% depreciation poses serious risks to Bangladesh's RMG export. India's recent final talk on FTA with Britain further amplifies the risk. Depreciated Rupee plus FTA have the potentials to wipe out the Bangladeshi RMG items from British market. Furthermore, competitiveness gained through this unprecedented depreciation makes India an attractive destination for relocating manufacturing centers from China,where rising cost and trade restrictions on Chinese goods make relocation of some manufacturing units inevitable. Indian economy can absorb the transitory effect from 10% depreciation. So such depreciation poses real challenges to Bangladeshi export sector, where persistent high inflation keeps the policy rate high and shrinks subsidy.

Appreciation of Yuan brings opportunities as well as challenges. As Chinese RMG items become less competitive, some orders may shift to Bangladesh. In addition, as imported goods become cheaper in China, Bangladesh's RMG export to the country may rise. There is a growing pressure from Bangladesh to narrow the trade balance, which is tilted in favor of China. The pressure plus the strong Yuan will play a conducive role to increase Bangladesh's export to China. Meanwhile, strong USD and Yuan pose challenges too. Bangladesh has long been mulling financing the public and private projects in Yuan as USD credit becomes more costly. Strong Yuan also makes Yuan credit costly. Chinese foreign investment also faces some obstacles as Yuan credit relatively gets costlier than before. Moreover, investment bankers think that People's Bank of China may raise the required reserve ratio for foreign currency deposit accounts, curtailing dollar liquidity into Chinese market(see "Chinese Yuan Rises To Highest Level Against Basket Since 2022",Jacob Gu,Bloomberg News, June 01,2026,https://financialpost.com/pmn/business-pmn/chinas-yuan-rises-to-highest-level-against-basket-since-2022l). This may put an obstacle to Chinese investors planning to implement their investment projects abroad in USD. Only time will tell whether opportunities outweigh the challenges or vice versa.

Bangladesh can ill afford further shrinking of its export income. Already inflation in advanced economies plus tariff debate made a dent into our export earnings. Depreciation of Rupee and appreciation of Yuan bring serious issues to competitiveness, export market and foreign financing of local projects. Country is experiencing serious inflation so further depreciation of Taka is not plausible right now. Contingency plans need to be chalked out so that risks from behavior of two currencies do not make inroads into export earnings.

La Semaine Dernière A Mes Yeux

(20 juin --- 26 juin)

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Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
20	Pain,Œuf,Pois blanc	Riz,Yardlong beans,Pabda,Lentil soup	Pain,Mutton Rezala	Litchi,Mangue,Banane
21	,Mutton Rezala,Yardlong beans	Riz,Mutton Rezala,Yardlong Beans,Gourde blanche	---	Jackfruit
22	Pain,Œuf	Riz,Ruhi,Moringa leaves, Lentil soup,Water spinach	Puffed rice,Payesh	Jaque,Jamun,Litchi
23	Pain,Papaye	Riz,Pabda,Vigna mungo soup	---	Mangue,Puffed rice
24	Pain,Œuf	Riz,Pabda,Puréee de cumin noir, Soupe aux lentilles,Yardlong beans	---	Mangue,Jamun,Riz gonflé
25	Pain,Œuf,Yardlong beans	Riz,Pabda,Soupe aux lentilles,Miuton,Yardlong beans	---	Mangue,Riz gonflé,Muraly
26	Pain,Œuf,Papaye	Riz,Mouton,Papaye, Soupe aux lentilles,Crevettes	---	Mangue,Riz gonflé,Muraly

Fiscal Discipline For Monetary Targets

Keeping budget deficit below threshold value Saves from danger coming out of the blue.

Govt has presented Tk 7.38 trillion budget before the parliament for FY 2026-27. The size of annual development program is Tk 3 trillion while the budget deficit is Tk 2.43 trillion, 3.47% of GDP.

As govt does not signal any change to policy rate, the sheer size of budget indicating larger govt spending is likely to complicate its monetary goals. Govt aims to contain the inflation at 7.5%,which is higher than 9% at this moment. Earlier govt announced a stimulus package of Tk 600 billion,committing at least Tk 30 billion annual support,which is a monetary expansion amid tighter monetary policy.

Tighter monetary policy requires similar fiscal fine-tuning in order to attain the inflation target. In this light how this budget plus the stimulus package,surprisingly organized by the central bank, will help bringing down the inflation calls for serious explanation.

Luckily, for the govt,ease of tensions in the Middle East means saving the subsidy for extra oil price. But the bad news is NPL is piling up. In three months of this year,NPL increased to 32% and became Tk 5.88 trillion or $48 billion ($1 USD= Tk 122)(See "Defaulted Loans Climb To Tk 588,704cr By March", The Daily Star,June 02,2026,https://www.thedailystar.net/business/news/defaulted-loans-climb-tk-588704cr-march-4188866). When the govt assumed office NPL was $34 billion. First two years for the govt are the right time for reforms if govt is comitted. So far govt stance oscillated between reform commitments and political goals. There is no sign of monetary and fiscal discipline. Sometimes regulatory body is committing blunder. Appointment of a chairman to a trouble-ridden bank and later revoking that decision and dissolution of the board of that bank cost the central bank liquidity support of Tk 25 billion. Govt has to deal with trouble-ridden banks and the NPL. How this can be done depends a lot on regulatory discipline.

Containing the inflation to the desired [level], monetary and fiscal discipline and a low budget deficit can lead to a stable economy. Govt revenue target is Tk 6.95 trillion while revenue deficit widens each year. In this backdrop larger budget deficit means we have to borrow more from abroad and banks. Keeping the budget deficit low should be another major policy criteria. In 2021, budget deficit was 6.2% of GDP. It became 4.6% in 2024. Last year it was 3.6% of GDP. For 2027, it is projected to be 3.7%(Source:Wikipedia, Trading economics, CPD).

Budget Deficit

Year	Deficit (% of GDP)
2021-22	6.2
2022-23	5.5
2023-24	5.2
2024-25	4.6
2025-26	3.6
2026-27	3.7(projected)

Fiscal discipline helps attaining the monetary goals quicker and guarantees macroeconomic stability. Following the 1998 financial disaster, Indonesia literally copied the Maastricht Treaty on budget deficit and made a law to keep the budget deficit below 3%. It enjoys the benefits over the years. The Maastricht Treaty or the Treaty On European Union obliges member countries to keep inflation rate no more than 1.5% higher than the average of three member countries with lowest inflation, to keep budget deficit below 3% of GDP, to keep govt debt below 60% of GDP,to keep the exchange rate of national currency within the margins set by the European Monetary System for 2 years and to keep nominal interest rate no more than 2% higher than in three member countries with lowest inflation(see Maastricht Treaty, Wikipedia,https://en.wikipedia.org/wiki/Maastricht_Treaty).

This kind of fiscal discipline keeps govt spending in check,makes currency stable and helps monetary regulation easier. We need to make similar law in the parliament to keep the budget deficit below 3% of GDP and make sure no govt can change it.

It is interesting that govt embarks on big spending programs while the pace of revenue collection is sluggish and central bank unveils a monetary expansion program while a tighter monetary policy is in action. It is interesting to see how the central bank address the issue in its upcoming Monetary Policy Statement. Point is govt has yet to establish monetary and fiscal discipline. But it is unveiling political programs that have the potentials to prolong the recovery.

La Semaine Dernière A Mes Yeux

(13 juin --- 19 juin)

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Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
13	Pain,Œuf	Riz,Feuilles de Moringa,Aïr poisson,Œuf	---	Puri,Mangue,Litchi,Jamun
14	Pain,Gourde serpent,Œuf	Riz,Purée de noix de jaque,Purée de cumin noir,Crevette,Soups aux lentilles	---	Mangue,Litchi,Jaque
15	Pain,Œuf	Riz,Feuilles de Moringa,Aïr poisson,Œuf	---	Puri,Mangue,Litchi,Jamun
16	Pain,Pois blanc,Œuf	Riz,Sec latya avec noix de jaque,Yard long beans,Poulet,Soups aux lentilles	---	Mangue,Datte,Pois chiches,Riz gonflé
17	Paratha,Pois blanc,Œuf	Riz,Yardlong beans,Sec latya avec noix de jaque, ,Taro,Ruhi poisson,Soupe aux lentilles	---	Riz gonflé,Mangue
18	Pain,Pomme de terre,Œuf	Riz,Sec latya avec noix de jaque,Pomme de terre,Courge amère avec crevette	---	Mangue,Litchi,Riz gonflé,Lait
19	Pain,Courge amère,Œuf	Riz,Épinard malabar,Sec latya avec Haricot rpuge, Pabda poisson	Riz gonflé,Courge amère	Litchi,Mangue

Flaws In The Leather Industry

Lack of certification and flaws in design Hold back the leather sector from doing fine.

Grievance of rawhide traders and rotting of unsold rawhide have become a recurrent image after Eid al Adha, when millions of animals are slaughtered in a religious ritual. This year is no different. Despite Bangladesh being the top Muslim majority country where highest number of animals is sacrificed during Eid, its leather export is still hovering around $1 billion. This year 9.3 million animals were slaughtered and 3.1 million rawhides were destined to rot near road side. This is a govt furnished data.

The reason for stagnating leather export is bizarre. Government relocated most of the tanneries at tannery estate,built by the govt,in Savar. Later it was found that its Central Effluent Treatment Plant (CETP) does not meet the criteria,set by EU, to deal with chromium laden sludge(see "Compliance Failure Costs The Bangladesh Leather Sector Up to $10 billion",Shafiun Nahar Elma,Textile Today,January 01,2026,https://textiletoday.com.bd/compliance-failure-costs-the-bangladesh-leather-sector-up-to-10-billion). This failure in compliance leads to [postponement of] Leather Working Group (LWG) certification, which is crucial to get international clients. In addition, LWG certification is needed at various levels in the industry including traceability of leather,use of chemicals etc. More than 50% of our tanneries are not compliant.

UNDP in a study titled "Investing In Bangladesh's Leather Industry: Challenges & Solutions" finds that lack of environmental compliance costs export earnings between $5 billion and $10 billion annually. Lack of certification results in 30% or 40% lower prices for leather in international market.

What is interesting LWG certification issue pushed Bangladesh to sell its wet blue leather to China at a lower price. Bangladesh's leather industry is now heavily reliant on Chinese buyers for its leather export. This increasing reliance blocks us from getting a competitive export price. China emerges as a price setter for our leather industry in the [wake] of LWG certification issue. This status quo needs to be changed.

UNDP study suggests that resolving the certification issue and additional investment between $300 million and $400 million [in product diversification] will bring $5 billion worth of leather export earnings by 2032.

Bangladesh needs to alter image of exporter of raw materials and should emerge as exporter of high-end finished goods. In that endeavor leather industry offers a high potential. Some design flaw in infrastructure,lack of awareness in certification issues and lack of investment in product diversification are holding back the industry from taking off.

La Semaine Dernière A Mes Yeux

(06 juin --- 12 juin)

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Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
06	Pain,Œuf	Riz,Épinard malabar,Pama croaker	---	Puri,Mangue,Litchi,Chocolat
07	Paratha,Œuf	Riz,Ruhi,Épinard malabar	Riz gonflé,Lait	Mangue,Litchi,Chocolat
08	Paratha,Œuf,Pomme de terre	Riz,Louffa,Petit poisson	Riz gonflé,Soupe aux lentilles	Puri,Litchi,Banane
09	Pain,Œuf,Papaye bhaji	Riz,Aïr poisson,Épinard d'eau	Riz gonflé,Pois chiches	Mangue,Litchi,Banane
10	Pain,Œuf,Papaye	Riz,Soupe aux lentilles,Petit poisson	Riz gonflé,Pois chiches	Mangue,Litchi,Banane
11	Pain,Gourde bouteille,Œuf	Riz,Petit poisson,Yardlong beans	Riz gonflé,Lait,Banane	Sucreries,Jamun
12	Pain,Œuf,Yardlong beans	Riz,Aïr poisson,Feuilles de Moringa,Yardlong beans	Riz gonflé,Soupe aux lentilles	Sucreries,Jamun,Litchi,Mangue,Patate douce