Remittance hit $24b in FY24, highest in three years

After hovering around the $21-billion mark for the previous two fiscal years, total remittances sent home by Bangladesh’s migrant workers reached nearly $24 billion in the just concluded fiscal year of 2023-24, providing some breathing space amid the forex crunch. As per the latest data from the Bangladesh Bank, remittance inflow stood at $23.91 billion in FY24, rising by 10.66 percent compared to the year prior. On May 8, the central bank introduced the crawling peg exchange rate system, allowing banks to buy and sell US dollars within a fixed band at around Tk 117. The inter-bank exchange rate stood at Tk 118 per dollar yesterday. In June, the last month of FY24, remittance inflow stood at $2.54 billion, up 15.59 percent year-on-year. Remittance inflow stood at $2.25 billion in May and $2.04 billion in April. Until May of FY24, around 11.42 lakh people left Bangladesh for work compared to 11.37 lakh in FY23, according to data from the Bureau of Manpower, Employment and Training (BMET). In FY22, around 9.88 lakh individuals went abroad.

Source: https://www.thedailystar.net/business/news/remittance-hit-24b-fy24-highest-three-years-3646901

Central bank stops daily repo lending to banks

Starting 1 July, the Bangladesh Bank ceased its daily repo lending to banks to strengthen the country’s currency market and improve currency management. Banks use repurchase agreements (repo) for short-term borrowing from the central bank. The open-market operations involve the central bank buying and selling government securities to regulate money supply and credit conditions. In cases where these days coincide with a holiday, repo lending will be conducted on the subsequent working day. However, the Standing Lending Facility and the Standing Deposit Facility will continue at prevailing rates on a daily basis. The Standing Lending Facility (SLF), previously known as the Special Repo, is used by banks for contingency fund management. Currently, the interest rate for SLF is 10%, compared to 8.5% for repo. The Standing Deposit Facility (SDF), formerly called Reverse Repo, has an interest rate of 7%. Banks can utilise the SDF to deposit their excess liquidity with the central bank.

Source: https://www.tbsnews.net/economy/banking/cenbank-stops-daily-repo-lending-banks-889221

Further cuts in export incentives, RMG fears rise in costs

Apparel sector – the single largest export earner, also the biggest beneficiary of generous support – is going to lose the most as incentives for all export items have been reduced for the second time in five months under the government’s plan to prepare the private sector for LDC graduation in 2026. According to a central bank circular issued today (30 June), the special incentive for the readymade garment sector – the most incentivised sector in terms of amount in the economy – has been cut from 0.5% to 0.3%. A senior central bank official said the government spent around Tk8,000 crore on incentives in the fiscal 2022-23, which is expected to fall in FY24 due to the reduction in the incentive rate. Additionally, incentives for venturing into new markets have been reduced by 1 percentage point to 2%. This reduction applies to various sectors, including jute and jute goods, leather and leather products, frozen fish, agro products, and more.

Source: https://www.tbsnews.net/economy/banking/incentives-exports-cut-50-43-products-tomorrow-888401

Gas crisis cripples ceramic industry

A crippling gas shortage exceeding a month has plunged the ceramic industry into crisis, with many factories being forced to keep their machinery idle and teetering on the brink of closure. Gas-based industries have been facing gas shortages for a long time, but the situation has worsened over the past month as one of the two floating LNG terminals in the Bay of Bengal suffered damage from Cyclone Remal that hit the coastal areas on 26 May. The damaged unit is under repair and it may take until mid-July for it to return to service. The Bangladesh Ceramic Manufacturers and Exporters Association sent a letter on 26 June to various offices, including the ministers and state ministers of industry, commerce, and power, the prime minister’s adviser for private industry and investment, and the Energy Regulatory Commission, to address the gas crisis immediately to save the ceramic industry.

Source: https://www.tbsnews.net/economy/industry/gas-crisis-cripples-ceramic-industry-888751

Bangladesh an ideal investment destination

Bangladesh is an ideal investment destination, exemplified by the fact that it is the second-largest garment exporter globally, said Maj Gen Abul Kalam Mohammad Ziaur Rahman, executive chairman of Bangladesh Export Processing Zones Authority (Bepza). The Chinese delegation visited the Chattogram EPZ and Bepza Economic Zone on June 30 to understand operational procedures, infrastructural facilities, wage structures, customs processes, and the tariffs for land and utilities.

Source: https://www.thedailystar.net/business/news/bangladesh-ideal-investment-destination-3646816