BB to impose 4% penal interest on banks

The central bank has decided to impose a 4 per cent penal interest on the banks’ unpaid amount of loans made from its Export Development Fund (EDF). In 2017, the Bangladesh Bank issued rules on the procedures and realisation of principal and accrued interest on EDF loans. If the loans and interests are not repaid within the deadline, the BB can debit the overdue amount from the foreign currency clearing accounts that authorised dealer banks maintain with the Bangladesh Bank. In a circular yesterday, the BB said it is observed that EDF loans are not being realised in accordance with instructions. In view of the situation, it has been decided that a 4 per cent penal interest, or compensation in the case of Shariah-based banking, will be charged per annum above the prevailing interest rate on the overdue amount of EDF loans for the delayed period. The BB asked ADs to submit a debit authority for realising the principal and accrued interest, including penal interest, at the time of application for the EDF loan.

Source: https://www.thedailystar.net/business/economy/news/bb-impose-4-penal-interest-banks-3275636

67% RMG export earnings come from 10 items

About 68 per cent of Bangladesh’s annual export earnings from apparels is still confined to just 10 items, indicating that product diversification in the industry is yet to reach expected levels even after a journey of four-and-a-half decades. The 10 most exported apparel items accounted for $30.94 billion of the country’s $45.70 billion earnings from the industry last year, according to data from the Export Promotion Bureau compiled by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). As always, knitted cotton T-shirts saw the highest exports in 2022, registering earnings of $8.93 billion with roughly 26 per cent year-on-year growth. This means that T-shirts contributed some 20 per cent of the total apparel exports that year, when Bangladesh captured 23 per cent of global trade in the sector, the data shows. Men’s woven trousers were the second highest earner, registering about 23 per cent year-on-year growth to hit $5.94 billion with a 13 per cent share of the total apparel exports. Locally made men’s trousers, including child sizes, hold a 21 per cent stake in the global market. Women’s trousers were the third largest export item, earning $3.63 billon with year-on-year growth of 19.10 per cent. The sector has a global market share of around 16 per cent.

Source: https://www.thedailystar.net/business/economy/news/67-rmg-export-earnings-come-10-items-3275621

New inflation measure to replace outmoded index

Bangladesh is updating the consumer inflation index with lot many goods and services in count, with 2021-22 as new base year, as price rises have upset indices locally and globally. Officials say the updated gauge to measure inflation is likely to be launched next fiscal year, beginning in July, as the existing one uses 2006 fiscal as base year and fails to portray real picture of inflation. The updating with the additional items in basket will result in new weightings for the components of its Consumer Price Index (CPI) basket, people at the national statistics office told the FE Sunday. “There have been huge changes in the consumption habits over the years, so we need the latest commodity basket to reflect the real picture of the price changes,” said a senior official working at the national accounting wing of Bangladesh Bureau of Statistics (BBS).

Source: https://thefinancialexpress.com.bd/economy/bangladesh/new-inflation-measure-to-replace-outmoded-index