Bangladesh economy has been facing the impact of International financial distress as it is an integral part of the global community. International financial crisis and international downturn started in USA during 2007-2008, followed by the European financial crisis in 2011 and 2012 and the Arab-Spring of 2011-12, which also has impacted on the domestic economy of Bangladesh. Financial intermediaries played an important role in the process of creating distress. This study has been undertaken to evaluate impact of international shock and convergence on Bangladesh economy. The time period of the study is from January 2012 to August 2012. The study uses both primary sources and secondary sources of data. The paper suggests that the development of this poor country Bangladesh depends upon employment creation and reduction of prices of essential basic commodities. Given that the market structure of the country is based on asymmetric information, international cooperation is an important elements where real, monetary, and the external sector should work together to complement each other for strengthening the macroeconomic fundamental variables in order to achieve the development aspirations. Bangladesh should tread with caution in dealing with the current international financial distress in order to minimize its potential unfavourable crash of international financial shock on the Bangladesh economy
