Business Report :
Fitch has downgraded Bangladesh’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to “B+” from “BB-” owing to the lingering weakening of the country’s external buffers.
“The outlook is stable,” said the agency in a report on Monday.
The downgrade to ‘B+’ reflects the sustained weakening of the external buffers, which could prove challenging to sufficiently reverse despite recent policy reforms, leaving the country more vulnerable to external shocks, Fitch said.
“Policy actions since early 2022 have been insufficient to stem the fall in foreign exchange reserves and resolve domestic dollar tightness.
“The recent shift to a crawling peg aims to increase exchange-rate flexibility. Whether this will fully address lingering FX market distortions and support significant reserves build-up remains unclear,” reads the report.