Bangladesh will rely more on external assistance

Significance

The trip comes as her government continues to contend with tough economic challenges including low foreign exchange (forex) reserves, high inflation and a troubled banking sector. Separately, her Awami League (AL) unsurprisingly fared well in recent local elections but is facing growing fallout from a series of corruption scandals.

Impacts

• Intra-AL rifts could prove the main threat to government stability.
• The government will borrow more from the domestic sector, hoping to lower long-term debt risks linked to exchange rate volatility.
• Hasina’s administration will bail out insolvent banks.