Fashion
Make rate structure more market-oriented, IMF tells Bangladesh Bank
During a meeting with Bangladesh Bank officials last week, the IMF stressed the need to maintain a contractionary monetary policy to bring inflation down to 5 per cent.
Bangladesh’s economy is still facing significant pressure, the IMF said, advising the country’s central bank to make the interest rate structure more market-oriented.
It stressed the need to maintain a contractionary monetary policy to bring inflation down to 5 per cent.
It is concerned over the use of foreign reserves in forming the Export Development Fund and the growing volume of non-performing loans.
It also expressed concern over the use of foreign reserves in forming the Export Development Fund (EDF) and the growing volume of non-performing loans (NPLs).
Despite a requirement under the loan conditions to reduce bad loans in state-owned banks below 10 per cent, the figure has reportedly exceeded 40 per cent. Private banks also saw their NPL ratio surpass 10 per cent, double the stipulated 5 per cent limit.
Under the IMF’s $4.7 billion loan programme, Bangladesh has yet to fully achieve its inflation-control target.
The central bank informed the visiting IMF delegation that overall inflation had dropped to 8.36 per cent in September.
The IMF sought clarification on how the central bank plans to maintain investment momentum if the contractionary policy continues for an extended period, according to domestic media reports.
The delegation strongly objected to the bank’s practice of providing unsecured liquidity support to weak banks under its ‘lender of last resort’ policy.
It was satisfied with the current level of Bangladesh’s foreign exchange reserves.
The IMF mission will stay in Dhaka until November 13.
Fibre2Fashion News Desk (DS)
The country imported textile and textile materials worth N 228.83 billion in the first quarter (Q1) this year, N 337.12 billion in Q2 and N 248.32 billion in Q3.
Industry experts blame policy failure, weak execution of credit initiatives, abandonment of promised institutional reforms, pervasive corruption and structural bottlenecks like weak cotton farming, insecurity and the inability to scale locally-produced polyester for the decline, according to Nigerian media reports.
Nigeria’s textile imports rose to N 814.27 billion in January-September 2025—a 47.43-per cent YoY rise despite repeated government claims of the sector’s revival.
Rising imports indicate a weak domestic textile industry.
Industry experts blame policy failure, weak execution of credit initiatives, abandonment of promised institutional reforms, pervasive corruption and structural bottlenecks for the fall.
Hamma Kwajaffa, director general of the Nigerian Textile Manufacturers Association, lamented that the 10-per cent tax on imported textiles—which was introduced when the ban on textile imports was lifted so that the amount collected can be ploughed into domestic textile production—has not been directed to improve the private textile sector.
Kwajaffa pointed to the failure to create a dedicated textile development fund domiciled with the Bank of Industry.
Conflicting positions among top officials had stalled any action related to the sector and repeated workshops and announcements without execution had yielded no tangible outcome, Kwajaffa added.
Fibre2Fashion News Desk (DS)
According to updated Eurosystem staff projections, headline inflation is expected to average 2.1 per cent in 2025, easing to 1.9 per cent in 2026 and 1.8 per cent in 2027, before returning to 2.0 per cent in 2028. Inflation excluding energy and food is forecast at 2.4 per cent in 2025, gradually declining to 2.0 per cent by 2028. Inflation for 2026 has been revised upward, mainly due to expectations that services inflation will fall more slowly than previously anticipated, the Governing Council of the ECB said in a press release.
European Central Bank has kept its key interest rates unchanged, maintaining confidence that inflation will stabilise at the 2 per cent target.
Updated projections show inflation easing gradually over the coming years, with a slight upward revision for 2026 due to persistent services prices.
Economic growth forecasts have been revised higher, supported by stronger domestic demand.
The ECB also revised its economic growth outlook higher compared with its September projections. Growth is now expected to reach 1.4 per cent in 2025, 1.2 per cent in 2026 and 1.4 per cent in 2027, with expansion projected to remain at 1.4 per cent in 2028. The improvement is driven largely by stronger domestic demand across the euro area.
The Council reiterated its commitment to ensuring that inflation stabilises sustainably at the 2 per cent target. It emphasised that future monetary policy decisions will remain data-dependent and assessed on a meeting-by-meeting basis, without pre-committing to any specific interest rate path.
Fibre2Fashion News Desk (KD)
Nigeria’s textile imports up 47.43% YoY in Jan-Sept 2025
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