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Moody’s Ratings has revised Bangladesh’s sovereign credit rating outlook from negative to stable, citing improvements in the country’s external position and progress in economic and financial-sector reforms.
However, the international credit rating agency has kept Bangladesh’s long-term sovereign rating unchanged at B2 and its short-term rating at Not Prime.
Moody’s announced the change in a report published on Tuesday. Bangladesh Bank welcomed the development in a special press release, describing the shift to a stable outlook as a positive development amid the country’s current economic conditions.
The central bank said the improved outlook could help boost international investors’ confidence in Bangladesh’s macroeconomic stability and future prospects.
Moody’s assessment highlighted several positive developments in the economy, particularly the strengthening of the external sector.
Bangladesh’s foreign exchange reserves stood at around $21.4 billion at the end of 2024 but had risen to $32.9 billion by mid-2026. According to the assessment, the reserves are sufficient to cover more than four months of import payments.
The agency also noted the recent record growth in remittance inflows. Greater use of formal banking channels and the introduction of a more flexible exchange-rate regime have helped stabilise the foreign exchange market and strengthened the central bank’s ability to preserve reserves.
Political and policy stability were also viewed positively. Moody’s said political uncertainty had eased following the February 2026 election, creating a more favourable environment for reforms under a government with a strong electoral mandate.
The agency also highlighted Bangladesh’s continued engagement with the International Monetary Fund and other international financial institutions, saying such engagement provides an important foundation for external financing, economic stability and structural reforms.
Progress in strengthening the banking sector was another positive factor in Moody’s assessment. Measures taken by the government and Bangladesh Bank to address weaknesses in the sector include asset quality reviews (AQRs), the enactment of a deposit protection law, a medium-term resolution framework supported by the IMF, and provisions preventing former owners of weak banks from regaining control.
Bangladesh Bank said liquidity conditions in the banking sector are currently stable, while deposit growth is also showing an upward trend.
Moody’s also identified Bangladesh’s large and diversified economy, favourable demographics and competitive ready-made garment (RMG) sector as positive factors supporting long-term growth. The export sector remains strong and continues to play an important role in generating foreign exchange.
However, the agency continues to identify limited government revenue, debt-servicing pressures and weaknesses in the banking sector as key challenges for Bangladesh.
Bangladesh Bank welcomed Moody’s assessment and said it remained committed to maintaining macroeconomic stability and continuing reform efforts.
The central bank expressed hope that the stable outlook would help strengthen international investor confidence and contribute to an eventual improvement in Bangladesh’s sovereign credit rating.
