Despite the stability of global financial markets, risks remain, and countries with weak economies are under pressure.

The International Monetary Fund (IMF) has warned against complacency about the stability of global financial markets. The agency said on Tuesday that events such as a sharp fall in artificial intelligence (AI) sector shares, a rise in government bond interest rates or a cyber attack could become major risks for global financial markets. Even though the market has remained stable so far, there is no chance to ignore these risks.

Any of these risks can increase the cost of borrowing. Then the investment may decline. Raising money from international markets can become difficult. Financing can be particularly difficult for developing countries like Bangladesh.

The Global Financial Stability Report of the International Monetary Fund (IMF) for October 2026 was released on Tuesday. It is said that the corporate sector is getting good income. At the same time, investments are being made in the AI ​​sector. All this is helpful for the global market. Behind this stability, several weaknesses remain. The point is that any new shock to these weaknesses could cause major volatility in the financial markets.

The Global Financial Stability Report said the negative impact on the economy due to the war in the Middle East and overall policy uncertainty has so far been partially offset by huge investments in the artificial intelligence sector. However, the company says, the idea that such a huge investment is not needed in the AI ​​sector is gaining ground. There will not be as many benefits as expected.

Higher interest rates can increase the cost of borrowing

The major cause of concern in the global economy is the pressure on public debt. Added to this is the fear of inflation rising again. A rise in fuel prices will further increase inflation. If central banks then raise interest rates, the borrowing costs of both the government and the private sector will increase.

According to the IMF report, bond interest rates may increase due to inflationary pressures, government fiscal deficit and large amount of government bond issuance. If investors want more profit from bonds, the government has to pay more interest to borrow. In addition to taking new loans, if new loans have to be taken to repay old loans, the cost may also increase.

The IMF said volatility in the government bond market could have ripple effects across financial markets. As interest rates rise, it becomes more expensive for businesses to borrow money. They may then postpone new investment plans. Financially weaker institutions are more stressed. All in all, investment and economic activity may slow down as well as growth.

Foreign loans may cost more

The cost of borrowing from the international market depends mainly on two factors—the prevailing market interest rate and the borrower's country risk. If US Treasury bond interest rates are high, other countries may also have to pay higher interest rates to borrow from international markets. With this additional interest is added considering the debt risk of the respective country.

According to the IMF report, the total cost of borrowing from the international market is still high, even though the excess interest margin for borrowing from relatively risky countries is low. As of August, the 10-year U.S. Treasury bond yield was above 4.5 percent. According to the IMF, such a situation has not been seen since 2007. That is, even though the additional interest for risk is low, the total cost of the loan may increase as the principal interest rate is high.

The matter can be said as an example, the interest rate of 10-year treasury bonds of the United States is 4.5 percent and investors demand an additional 3 percent interest to lend to a risky country. Then the total interest rate of that country's debt will be 7.5 percent.

Debt of Bangladesh

Bangladesh's foreign debt is increasing. According to the data of Bangladesh Bank, in the last quarter (April-June) of the fiscal year 2025-26, the total foreign debt of the country has increased to 114.98 billion or 11 thousand 498 million dollars. This calculation is made by combining the foreign debt of the public and private sectors. This loan is 3.65 percent higher than the previous three months of January-March.

Bangladesh's advantage is that most of its foreign debt is long-term debt from multilateral and bilateral sources. Commercial loans are low here. If the pace of economic growth increases, the volume of commercial loans may also increase. Overall, Bangladesh will not be free from the effects of shrinking sources of global financing or increasing costs.