Inflation worry forces BB to squeeze credits

The central bank unveiled Monday a new monetary policy that limits credit flow to check inflation and improve country’s financial stability while promoting job-centric economic growth. Bangladesh Bank (BB) Governor Fazle Kabir announced the monetary policy statement (MPS) for the January-June period of the fiscal year (FY) 2017-18 at a press conference held at the central bank headquarters in Dhaka. The MPS for the second half of the fiscal is particularly intends to help the sectors in achieving sustainable growth by holding in check inflationary pressures on the economy and discouraging money flow into less-productive sectors. “The new monetary policy targets employment-focused growth with stability,” the central bank chief said while explaining the main objective of the MPS. The central bank, however, kept unchanged its domestic credit (DC) target at 15.8 per cent for the second half (H2) of the FY 18 while target of broad money (M2) supply came down to 13.3 per cent from previous 13.9 per cent. “Although broader monetary policy targets (M2, DC) have been redesigned cautiously to support growth while balancing inflationary risks, vigilance and continuous monitoring is required as the monetary programme and economic development unfold,” the MPS explains. On the other hand, the BB enhanced its private-sector credit-growth target to 16.8 per cent against a previous projection of 16.3 per cent. The revised private-sector-credit-growth target, however, is significantly lower than that of the existing level at 18.13 per cent in December 2017. The growth in credit flow to private sector rose to 19.06 per cent in November 2017 on a year-on-year basis from 18.63 per cent a month before, the BB data showed. The latest revision came against the backdrop of rising trend in the private-sector-credit flow in the recent months due to higher trade financing for settling import-payment obligations, particularly for food- grains, fuel oils and capital machinery.

Source:
http://today.thefinancialexpress.com.bd/first-page/inflation-worry-forces-bb-to-squeeze-credits-1517247736
http://www.newagebd.net/article/33698/bb-raises-h2-pvt-sector-credit-growth-target-eyeing-election
http://today.thefinancialexpress.com.bd/last-page/bb-hints-at-taking-steps-to-attract-local-foreign-portfolio-funds-1517248376
http://www.thedailystar.net/business/avoid-long-term-loans-corporates-1527136
http://www.thedailystar.net/frontpage/bb-seeks-curb-excessive-lending-1527004
http://www.theindependentbd.com/post/135022

BB not against new banks, says governor

Bangladesh Bank (BB) is not against allowing new banks, but it would depend on the decision by its board of directors, the central bank governor said Monday. “We are not making a u-turn regarding allowing of new banks. At the same time, we will scrutinise such proposals and place those before the board,” BB governor Fazle Kabir told journalists, replying to a question about allowing two more new private banks. His response came during the release of the new monetary policy statement (MPS) for the January-June period of the current fiscal year at central bank’s board room. “In this free market economy, no business can be prevented,” he said.

Source: http://today.thefinancialexpress.com.bd/first-page/bb-not-against-new-banks-says-governor-1517247990

H2 monetary policy a tough call: economists

Economists on Monday said it would be tough for Bangladesh Bank to implement the monetary policy the central bank announced on the day for the second half of the fiscal year of 2017-2018. The private sector credit growth was 18.1 per cent in the first half of FY18 against the BB’s target of 16.3 per cent, while the central bank has set the private sector credit growth target at 16.8 per cent for the January-June period of FY18. Economists observed that the new monetary policy was a reflection of the reality and continuation of the previous policy. It would be tough for the central bank to implement the policy targets including the private sector credit growth target and checking disbursement of loans in the unproductive sectors. According to Policy Research Institute of Bangladesh executive director Ahsan H Mansur said, it’s going to be tough for the central bank to keep private sector credit growth within 16.8 per cent considering the actual growth (18.1 per cent) in the first half.

Source: http://www.newagebd.net/article/33699/h2-monetary-policy-a-tough-call-economists

Trade deficit may hit record $13b: BB

Trade deficit would hit a record $13 billion this fiscal year due to higher import payments against lower export earnings, Bangladesh Bank said yesterday. The widening trade deficit would put a pressure on the country’s foreign exchange reserve, analysts said. At the end of 2016-17, the trade deficit stood at $9.47 billion, up 46.62 percent year-on-year, according to data from the central bank. Trade deficit never crossed the $10 billion-mark but it might this fiscal year, the central bank said in its latest monetary policy statement for the January-June period. The projected trade gap indicated that the country’s export earnings would also see a moderate growth this fiscal year while import payments would increase heavily. The trade deficit in the first five months of 2017-18 stood at $7.60 billion. The current account balance would register a deficit of $4.34 billion in 2017-18 in contrast to a surplus of $4.26 billion a year earlier, according to the central bank’s projection. The import of capital machinery and industrial raw materials has registered a significant growth in the first half of 2017-18, BB Governor Fazle Kabir said. The sudden increase of import payment has led to a 2.5 percent depreciation of the local currency against the dollar in the July-December period of the fiscal year. The current account deficit also widened putting a pressure on the country’s foreign exchange reserve, he said, adding that the central bank has focused on the issues in the latest monetary policy.

Source: http://www.thedailystar.net/business/trade-deficit-may-hit-record-13b-bb-1527145

Interest on bank loans hiked to double digits again

With the growth of bank loans to the private sector, the interest on said loans have also grown. Due to an increase in demand for loans, many banks have started charging 10-12% interest rates, whereas they were charging below 10% only a few months ago. According to officials from private banks and Bangladesh Bank, some banks are reportedly granting more loans than their limits, creating liquidity crisis. Hence, they are trying to raise the interest rate to recover their funds. Bangladesh Garments Manufacturer and Exporters’ Association President Siddikur Rahman told the Bangla Tribune: “The interest rate has been hiked back to double digits. We now have to take out loans at 10-12% interest.” The BGMEA president said the increase in bank interest rates lead to an increase in business expenses. He called upon Bangladesh Bank to regulate the interest rate and bring it down to single digit. According to a Bangladesh Bank report, as of December 2017, over 40 banks have hiked the interest rate on bank loans, and 30 of them are charging 10% or more. The same report said the credit growth was 19.06% in November 2017, a remarkable increase from 15.66% in June 2017.

Source: http://www.dhakatribune.com/business/banks/2018/01/29/interest-bank-loans-double-digits/

BB CYBER HEIST: Another $7.2m might be recovered

The central bank hopes to recover another $7.2 million out of the $81 million stolen from its reserve account with the Federal Reserve Bank of New York in 2016. About $14.45 million has so far been recovered, said Bangladesh Bank Fazle Kabir while unveiling the monetary policy statement for the second half of fiscal 2017-18 yesterday. The court in the Philippines, where the hacked amount went to, has issued an asset preservation order to return $1.2 million to Bangladesh and a civil forfeiture case has been filed for recovering another $6 million. A joint team of the central bank and the Criminal Investigation Department yesterday left for the Philippines to complete the formalities.

Source: http://www.thedailystar.net/business/another-72m-might-be-recovered-1527130

Foreign fund inflow for microcredit may dry up

Microcredit sector might face some challenges, including less inflow of foreign funds, after Bangladesh’s gradation from Least Developed Country (LDC) status, the regulator predicts. In its concept paper, the Microcredit Regulatory Authority (MRA) says the normal growth in microcredit will be affected because of fund crunch, thus affecting poverty-alleviation drives. Contribution of microcredit to government’s poverty-reduction activity, including different activities geared towards achieving current sustainable development goals (SDGs), is likely to dwindle away. Inclusive and sustainable extension of the MFIs may be impeded if the institutions faced with the challenges. Besides, continuous trend in huge job-creation activity might also be hindered if foreign fund inflow for microcredit dries up. Currently, 702 MFIs across the country are registered with the MRA and 151 have got licences from the authority on a temporary basis. The microcredit disbursement by the registered microfinance institutions came to BDT 782.67 billion at the end of fiscal year 2015-16. The country’s MFIs received BDT 5.22 billion from the donors at the end of 2015, according to the annual report of the MRA.

Source: http://today.thefinancialexpress.com.bd/last-page/foreign-fund-inflow-for-microcredit-may-dry-up-1517248265

Premier Bank gets new AMD

Golam Awlia has recently been appointed as additional managing director of Premier Bank. Prior to the appointment, he was the deputy managing director of United Commercial Bank, Premier Bank said in a statement yesterday. Awlia started his banking career with United Commercial Bank as a probationary officer in 1983.

Source: http://www.thedailystar.net/business/premier-bank-gets-new-amd-1527085