Bangladesh Faces Costlier Imports as US Rate Hike Looms

The recent strong US jobs market has pushed the odds of a September rate hike by the Federal Reserve above 50%, posing a significant challenge for Bangladesh's import-dependent economy.

The August jobs report showed nonfarm payrolls rose by 162,000 last month, more than three times what economists had forecast, and the unemployment rate held steady at 4.1%.

This has increased the likelihood of a quarter-point hike in September, with nine out of 19 Federal Reserve members now projecting at least one hike by year-end.

Bangladesh's importers financing letters of credit and trade facilities in US dollars are directly exposed to the Secured Overnight Financing Rate (SOFR), which has risen to 3.66% and could edge higher with a further quarter-point Fed hike plausible this month.