Remittance inflow climbs 21% in November
Migrant workers sent home $1.93 billion in November, an increase of 21 percent year-on-year, as banks offer a higher rate for the US dollar to collect remittance. The remittance inflow was $1.59 billion in the same month last year. November’s receipts, however, were 2.42 percent down from a month ago. In order to tide over the foreign exchange shortage and settle import bills, banks have raised the buying rate of the US dollars. Some banks are offering at least Tk 5 to Tk 6 per dollar more than the permitted rate fixed by the Bangladesh Foreign Exchange Dealers Association (BAFEDA) and the Association of Bankers Bangladesh (ABB). More than 11.35 lakh Bangladeshis left the country for jobs abroad last year, nearly double the 6.17 lakh migrant workers who flew to other countries the previous year.
Private credits grow despite banks’ liquidity hardship
Private-sector-credit flow grows marginally, as per latest account up to October, in a reversal of previous low ebb amid liquidity crunch. Pre-election credit rescheduling to meet prerequisite for averting loan default and resultant nomination rejection and dry-season demand are seen among the spurs that helped in turning the corner. After months of downward trend, private-sector-credit growth went up by 0.40 percentage points to 10.09 per cent in October last by official count, notwithstanding prevailing liquidity stress in the banking sector. In the previous month of September, the credit growth for private- sector players in the national economy was 9.69 per cent. Officials, bankers and economists term such turnaround in the demand for formal credits by the private entrepreneurs ‘unusual’, especially as the development comes ahead of the 12th parliamentary election when the commercial banks generally practice cautious or non-aggressive banking operations to avert possible buildup of non-performing loans (NPLs). The private-credit growth further plummeted in the subsequent months, with figures of 12.14 per cent in February, 12.03 per cent in March, 11.28 per cent in April, 11.10 per cent in May, 10.57 per cent in June, 9.82 per cent in July, 9.75 per cent in August and 9.69 per cent in September.
Treasury bill interest rate tops 11%
The interest rate for treasury bills that the government uses for short-term borrowing from the banking sector has hit 11%, a growth of 50 basis points in a week. A private bank official attributed the rise to growing demand for bank loans among state authorities. On Sunday, the government borrowed Tk4,218 crore at 10.8% interest rate for 91 days, Tk501 crore at 11% rate for 182 days, and Tk422 crore at 11.20% rate for 364 days, as per central bank data. In the previous auction on 26 November, interest rate for 182-day treasury bills was fixed at 10.50%. Notably, banks can charge maximum 11.22% interest from private borrowers, but some issues including the risk of default forces banks to settle for lower rates.