Bangladesh Bank Training Academy Journal

Abstract: The present study applies an ARDL model to examine the complex interplay among monetary policy, inflation, broad money supply, exchange rates and remittances in the context of Bangladesh. The investigation is grounded on yearly time series data covering the period from 1978 to 2022. The results of our unit root and cointegration analysis indicate that the variables under consideration demonstrate a mixture of integrated of order I(0) and integrated of order I(1) features. The study revealed that, in the short term, the effects of interest rates (IR) and inflation rates (IN) on remittances (REM) were shown to have a considerable influence on the flow of remittances. Conversely, exchange rates (EX) and broad money (BM) were deemed to be statistically insignificant. The Error Correction Mechanism (ECM) coefficient indicates a significant annual correction rate of around 26.45% for short-term aberrations from the long-run equilibrium in remittances. Surprisingly, the long-term association did not show any statistical significance in respect to exchange rates (EX). The findings highlight the crucial economic role of interest rates and inflation in influencing remittance flows, underscoring the need for balanced monetary policy and inflation control to harness remittances as a stabilizing force for Bangladesh’s economy. The aforementioned findings provide significant insights for policymakers, emphasizing the importance of implementing a well-rounded monetary policy, effectively managing inflation and promoting financial inclusivity in order to maximize the positive impact of remittances on Bangladesh's economic stability and progress.

Citation: Hossain, M. S., & Hossain, M. A. (2025). Monetary policy and exchange rate dynamics in the context of remittance volatility: Evidence from Bangladesh. BBTA Journal: Thoughts on Banking and Finance, 10(1), 1–16.

Abstract: This study examines the effect of imported capital goods on manufacturing exports in Bangladesh using annual time series data from FY1991 to FY2023. The ARDL (auto-regressive distributed lag) bound test approaches applied to investigate the symmetric relationship between manufacturing expo rts, imported capital goods, exchange rate, and trade openness. The results of the empirical analysis suggest that imported capital goods and trade openness have a positive influence on manufacturing exports. On the other hand, the econometric relationship gives the evidence that exchange rate depreciation has a negative impact on manufacturing exports. Finally, we recommend that the government should implement a comprehensive trade policy with a particular focus on the import policy for capital goods. This will help to improve the manufacturing export performance as a growth driver of the economy.

Citation: Islam, M. M. (2025). Impact of imported capital goods on manufacturing exports in Bangladesh. BBTA Journal: Thoughts on Banking and Finance, 10(1), 17–40.

Abstract: This study examines the impact of institutional quality, unemployment, and the dependency ratio on human development in Bangladesh from 1996 to 2022. Using ARDL models, the findings reveal that both unemployment and the dependency ratio negatively affect the Human Development Index (HDI) in the long term. Institutional quality, measured by three different indicators, shows no significant impact on HDI in any model. In the short run, only one dependency ratio coefficient is significant, with a negative effect across all models. Granger causality tests indicate that causalities run from institutions to both HDI and the dependency ratio, while the dependency ratio Granger causes HDI in all models. One model uniquely shows that unemployment Granger causes institutional quality. Policy recommendations emphasize reducing unemployment and managing the dependency ratio to improve human development, alongside strengthening institutions to support these efforts.

Citation: Toufique, M. M. K. (2025). Examining the impact of institutional quality, unemployment, and dependency ratio on human development in Bangladesh: An ARDL time series evidence. BBTA Journal: Thoughts on Banking and Finance, 10(1), 41–63.

Abstract: This study examines the volatility dynamics of food inflation in Bangladesh using Generalized Autoregressive Conditional Heteroskedasticity (GARCH) and its variants (EGARCH, TGARCH, and IGARCH) to capture the influence of past shocks, volatility persistence, and asymmetric responses. The analysis utilizes Consumer Price Index (CPI) data for food and its subgroups. The findings reveal significant heterogeneity in volatility behavior across commodities. Overall, food price volatility shows both significant persistence and asymmetry, where negative shocks reduce volatility more than positive shocks. The results highlight the strong persistence of price volatility in many food subgroups and the asymmetric response of prices to shocks, where price increases lead to higher volatility compared to price decreases. This has important implications for policy, particularly for inflation management and food security, as volatility disproportionately affects lower-income households. The study suggests targeted interventions to stabilize prices and improve supply chain efficiency, alongside long-term strategies for sustainable agricultural practices. The findings contribute to the broader discourse on economic stability and food price dynamics in Bangladesh.The estimated volatility along with the threshold effect (if any) will help to confirm the active intervention by the authority in the food markets to prevent unusual food price hikes.

Citation: Lubna, N. A. (2025). Exploring the food inflation volatility in Bangladesh: An econometric study. BBTA Journal: Thoughts on Banking and Finance, 10(1), 64–75.

Abstract: This study explores the influence of the Real Effective Exchange Rate (REER) on Bangladesh's trade flows, explicitly focusing on nominal export earnings and import payments. Using a decade of monthly data from July 2010 to March 2020, the research employs the Johansen cointegration and Vector Error Correction Model (VECM); the analysis reveals a significant long-term equilibrium relationship between REER and export earnings but not with import payments. REER appreciation enhances export competitiveness in the short and long run, while import payments remain unaffected due to import substitution policies. Diagnostic tests validate the model's reliability, confirming no serial correlation or heteroscedasticity. The findings emphasize stabilizing REER, adopting REER-led strategies, and promoting export-oriented policies to reduce the trade deficit. Policymakers should utilize REER adjustments to boost competitiveness and productivity. Future research could include variables like industrial production and GDP to understand Bangladesh's trade dynamics comprehensively.

Citation: Shahid, M. S. B., & Akter, R. (2025). Influence of real effective exchange rate on nominal export earnings and nominal import payments: Insights from Bangladesh. BBTA Journal: Thoughts on Banking and Finance, 10(1), 76–92.

Abstract: The objective of the study is to recognize how stockholders adjust environmental information with fundamental accounting measures. This study investigates whether the disclosures regarding green banking activities is relevant to stock price of the firm by employing linear price model. The study applies regression analysis on a sample of 30 listed banks on Dhaka Stock Exchange. The analysis revealed that green banking disclosure has no direct impact on stock prices, but indirectly affects stock price through interaction with fundamental financial information, i.e. book value and earning per share. The estimates show that publications of green banking disclosures decrease the relevance of book value and increase the relevance of earning per share in determining firms share value.

Citation: Ferdous, F. (2025). The value relevance of fundamental accounting data under the adoption of green banking disclosures: Evidence from listed Bangladeshi banks. BBTA Journal: Thoughts on Banking and Finance, 10(1), 93–110.