Moody's Ratings upgrades Bangladesh's credit outlook to 'stable'
Global credit rating agency Moody’s Ratings has upgraded Bangladesh’s sovereign credit rating outlook from "Negative" to "Stable," citing improved macroeconomic stability, growing foreign exchange reserves, and restored confidence among international investors.
In a press release issued on September 15, Bangladesh Bank highlighted key macroeconomic factors detailed by Moody's that led to the rating revision. According to the central bank, Bangladesh’s foreign exchange reserves rose significantly from $21.4 billion at the end of FY24 to nearly $31.8 billion in FY26, providing sufficient cover for over four months of imports. The growth in reserves was supported by a strong surge in remittance inflows, higher export receipts, and the stabilization of exchange rate mechanisms.
The global rating agency noted that reduced political uncertainty following the national elections and sustained policy execution have bolstered overall economic stability. Ongoing structural reform programs supported by the International Monetary Fund (IMF) have also played a crucial role in enhancing Bangladesh's medium-term growth momentum and financial predictability.
Furthermore, Bangladesh Bank and the government have launched comprehensive structural reforms within the banking sector. Key initiatives include conducting Asset Quality Reviews (AQR), modernizing insolvency frameworks through the Distressed Asset Management Act (DAMA), enforcing strict owner-qualification criteria for bank management, and adopting international auditing standards to resolve non-performing loans.
Long-term economic prospects remain strong due to favorable demographic dividends, duty-free market access, a competitive Ready-Made Garment (RMG) sector, and strategic infrastructure developments. On the external trade front, foreign exchange reserves reached $31.17 billion, while export earnings grew to $6.1 billion alongside $3.59 billion in foreign direct investment (FDI). Additionally, central bank regulations now permit foreign investors to directly repatriate dividend earnings of up to BDT 100 crore through expedited channels.
The upgrade to a stable outlook underlines international confidence in Bangladesh's financial administration, external sector resilience, and overall economic recovery trajectory.
