BB buys record $5.49b to keep taka stable

The central bank purchased greenback worth a record $5.49 billion in the first half of the current fiscal year to keep stable the exchange rate of the local currency. The previous highest was recorded in 2013-14 when the Bangladesh Bank bought $5.15 billion from local banks. The central bank was forced to smash all previous records of dollar purchase in just six months in the wake of higher flow of remittance and lower imports caused by the economic slowdown brought on by the coronavirus pandemic. Although the dollar purchase is helping the export sector and swelling the foreign exchange reserve, the buying spree has flooded the financial sector with excess liquidity. But lower credit demand from borrowers amid the slowdown in business has put an adverse impact on the cost of funds for banks as liquidity has largely remained idle. The excess liquidity in the banking industry stood at Tk 182,990 crore in October, up 202 per cent year-on-year. The interbank exchange rate has been hovering around Tk 84.80 per US dollar since July. The rate was Tk 84.95 on March 25, a day before the country declared a countrywide lockdown to contain the virus. For instance, the Indian rupee was at 73.12 per dollar on January 11 this year, up from 71.37 on January 1 last year, according to data from the Reserve Bank of India.

Source: https://www.thedailystar.net/business/news/bb-buys-record-549b-keep-taka-stable-2029681

Tk 1,000cr fund to help exporters upgrade tech

Bangladesh Bank yesterday formed a Tk 1,000 crore fund to provide cheap loans to export-oriented industries to upgrade technologies they currently use. The eligible industries are of 32 types, all falling under top-priority and special development sectors, according to a central bank notice. The fund will run under a refinancing scheme, meaning banks will first give out the loans before being reimbursed by the central bank. Interested banks and non-bank financial institutions (NBFIs) will have to sign a participation agreement with the central bank. Managing the bank rate is a method by which central banks influence economic activity. Lower bank rates can help expand the economy by lowering the cost of funds for borrowers. Currently, the rate is 4 per cent. If a bank happened to have availed the fund now, it would have been charged 3 per cent. It is 5 per cent for less than five years, 5.5 per cent for between five years and less than eight years, and 6 per cent for eight years to 10 years. A 7:3 debt to equity ratio will have to be maintained, which means that a borrower can avail 70 per cent of the upgradation cost from the lender while the remaining 30 per cent has to come from his/her own pockets.

Source: https://www.thedailystar.net/business/news/tk-1000cr-fund-help-exporters-upgrade-tech-2029661

Wheat import declines

Wheat imports declined 2 per cent or 72,000 tonnes in the first six months of fiscal 2020-21 compared to the corresponding months of the previous year as prices rose amid a shortage of supply in the international market. This is a result of the ongoing coronavirus pandemic, during which large countries increased their stocks of wheat, leading to price volatility in the international market, according to importers. The price of wheat has gone up by $50 to $60 per tonne in the last three months. Besides, Russia, one of the world’s top wheat exporters, recently announced imposing export duty of €50 per tonne from next March. The DAE estimates show that this year about 13 lakh tonnes of wheat would be produced on 3.5 lakh hectares of land while it was 12.45 lakh tonnes from 3.29 lakh hectares of land in 2019-20. According to sources at Chattogram Customs, some 30.99 lakh tonnes of wheat worth Tk 6,731.18 crore was bought in the first six months of fiscal 2020-21. It was just 31.70 lakh tonnes in the same period of fiscal 2019-20, the NBR data shows. Wheat was imported at an average price of Tk 235 per tonne in the last financial year but the current average price is Tk 256 per tonne. At present, the supply of baked goods to the international markets is low while prices have become unstable due to the increase in wheat stocks in several large countries, including China. Last Thursday, wheat from Russia and Canada was traded at $330 per tonne while it was $320 per tonne in Ukraine and $315 per tonne in the Indian market. The price of wheat had already risen globally even before the €50 export tariff was announced by Russia, Bashar said. According to an United States Department of Agriculture (USDA) report published on November 8 this year, Bangladesh has set the annual food grain production target for wheat at 13 lakh metric tonnes for fiscal 2020- 21. If realised, the harvest would be a 4.2 percent increase over the 2019-20 harvest. In consumption, Bangladesh comes 20th while China takes top spot with an annual 1.3 crore tonnes. In production, Bangladesh placed 31st in the last financial year and again, China heads the leader board with 1.37 crore tonnes.

Source: https://www.thedailystar.net/business/news/wheat-import-declines-2029677

New MD for Citizen Bank Citizens Bank

recently witnessed the appointment of Mohammad Masoom as its managing director and chief executive officer. Prior to the new role, Masoom served Midland Bank as additional managing director. Masoom made his debut in the banking profession with AB Bank and subsequently served in Southeast Bank, Trust Bank and National Bank. He also served at the Bangladesh Finance and Investment Company (BD Finance) as managing director and CEO.

Source: https://today.thefinancialexpress.com.bd/stock-corporate/bd-to-export-bandwidth-to-saudi-telecom-1610555638