Bangladesh banks face stress as funding costs jump: Moody’s

Bloomberg

Profitability of local lenders in Bangladesh will likely come under strain from rising funding costs amid a liquidity squeeze in the banking system, according to Moody’s Investors Service.
“A spike in imports, declines in remittance inflows and high inflation have drained liquidity,” analysts led by Chong Jun Wong said. The funding costs “have increased materially because demand has grown, and the central bank has started tightening monetary policy to curb inflation.”
Liquidity began to tighten as banks increased sales of the local currency for dollars amid growing inbound shipments. Rise in global commodity prices and the dependence of the South Asian nation on imports are adding to its troubles. The IMF approved a $4.7-billion loan to cushion the nation from economic pain.