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that Bangladesh’s external position has not fundamentally weakened, although panic driven demand had unsettled the market.

The country’s gross foreign exchange reserves stand at about $34.35 billion, which the central bank described as a strong buffer for external trade payments. Usable reserves were $29.81 billion on April 2, enough to cover more than five months of imports.

The BB report said the central bank has maintained monetary tightening in response to stubbornly high inflation.

“However, inflation remains above the comfort threshold, disproportionately affecting low- and middle-income households,” it said, adding that the government and the central bank have taken several steps to rein in price pressures.

The BB has withdrawn LC margin requirements for imports of essential commodities, including rice, onions, dates, sugar, pulses and edible oil, it added.

Alongside truck sales by the Trading Corporation of Bangladesh (TCB), relevant agencies are working to curb hoarding, syndication and other illegal practices to ease supply bottlenecks.

On money and credit markets, the report said the near-term outlook depends on striking a balance between maintaining adequate liquidity, containing inflation and reviving private sector credit growth.

It said that public sector credit is likely to remain the main driver of overall credit expansion in the short term, potentially crowding out private investment and complicating efforts to sustain growth.

“A recovery in private-sector credit will depend on further moderation of lending rates, improved investor confidence, and greater political stability,” said the BB.