BB renews call to exhaust stimulus packages by Mar

The central bank has asked the banks to exhaust all stimulus packages by March to help revive the economy, battered by Covid-19. The advice was given at a virtual meeting between the bankers and Bangladesh Bank (BB) governor Fazle Kabir. The private sector credit growth will be increased in the coming months if the banks implement the financial packages fully by March 31. Nearly Tk 309 billion was disbursed as working capital until January 25 under the stimulus package of Tk 330 billion for large borrowers in industrial and service sectors. The implementation rate of the package is nearly 94 per cent. But the banks and non-banking financial institutions disbursed Tk 115 billion of the stimulus package to the smaller firms, which are 58 per cent of the total allocation of Tk 200 billion. Loans amounting to around Tk 130 billion were approved for 81,000 Covid-affected CMSMEs across the country during the period, the BB’s data showed. At the meeting, the BB governor thanked 10 banks, which have already implemented their 100 per cent initial targets, set by the central bank, of the stimulus package for the CMSMEs. Under the revised deadline, banks and NBFIs are now allowed to implement the package for the sector by March 31, 2021 instead of December 31, 2020, according to a notification, issued by the central bank on January 03. The unsettled overseas import bills stood at US$23.79 million as of September 2020 while the banks did not settle the local import bills amounting to $31.22 million. The central bank has recently verified the unsettled import bills of 29 banks, of which the performance of some lenders was not good, according to a central bank’s report.

Source: https://today.thefinancialexpress.com.bd/first-page/bb-renews-call-to-exhaust-stimulus-packages-by-mar-1611767527

Trade deficit narrows on falling imports

The trade deficit shrank heavily in the first half of the ongoing fiscal year because of dwindling imports amid the economic slowdown, in a sign of depressed demand and consumption. Between July and December, the trade deficit, which occurs when imports outweigh exports, stood at $6.46 billion, down 21.37 per cent year-on-year, data from the central bank showed. During the period, imports declined 6.8 per cent from that a year earlier to $25.22 billion, eclipsing a 0.44 per cent fall in exports to $18.76 billion. Capital machinery import stood at $ 1.5 billion in the first half of 2020-21, down 29.17 per cent from a year ago. This means businesses are reluctant to set up new plants or expand their existing ones. Import of intermediate goods, including industrial raw materials, dipped 8.8 per cent to $15.33 billion, in a sign of lower production than the pre-pandemic period. The decline in imports has had an adverse impact on the private sector credit growth, which stood at 8.37 per cent in December against the central bank target of 11.5 per cent. Current account balance, one of the major indicators of the balance of payments (BoP), stood at $4.32 billion in the July-December period in contrast to a deficit of $1.66 billion a year ago. Between July and December, expatriate Bangladeshis sent home remittances worth $12.94 billion, up 37.60 per cent year-on-year. The large balance in the current account has contributed to the ballooning of the foreign exchange reserve, which stood at $43.17 billion at the end of December. The overall balance was $6.15 billion in the first six months of the fiscal year in comparison to $27 million a year earlier.

Source: https://www.thedailystar.net/business/news/trade-deficit-narrows-falling-imports-2035181

Berger Paints’ profit up despite pandemic blues

Profits of Berger Paints Bangladesh rose 5.1 per cent year-on-year during April to December on the back of the lower price of raw materials and cut in costs in the pandemic-hit 2020 that saw revenue drop. The Indian multinational company made Tk 160 crore in profits in the first nine months of the financial year that ends on March 31. Net revenue declined 7.89 per cent to Tk 1,118 crore. Expenses declined 26 per cent to Tk 199 crore, the financial report of the company showed. But the employment benefits were regular and were not curtailed, he said. The company’s sales bounced back following the reopening of economic activities. As a result, sales rose 10.5 per cent in the October-December quarter to Tk 514 crore. Investment income fell 26.5 per cent to Tk 10.73 crore because of lower bank interest, according to the financial report. Net operating cash flow per share decreased mainly because of lower sales resulting from the lower collection in April and May. Berger shares traded at Tk 1,560.20, up 0.70 per cent, on the Dhaka Stock Exchange yesterday.

Source: https://www.thedailystar.net/business/news/berger-paints-profit-despite-pandemic-blues-2035141

Local production cools down AC prices

Air conditioners (ACs) were once thought of as luxury items that are only enjoyed by the elite, but their prices have seen a drastic fall in the recent years thanks to increased local production and assembly. Jhimi Chakma, a lecturer of the philosophy department at Dighinala Degree College in Khagrachhari, has been using a locally made 1.5-tonne inverter AC for the past one year without any disruption. According to him, it would cost at least Tk 90,000 for an international brand unit while he spent only Tk 65,000 for practically the same service. Like Chakma, Iqbal Hossen, an official of the Central Procurement Technical Unit, said he has also been using a 1.5-tonne non-inverter unit of a local brand for around two years. Hossen said he is very pleased with the air conditioner that cost him only Tk 55,000, as he has also been provided with great aftersales services by the local company. Local production caters to around 70 per cent of the country’s total demand, which was valued at about Tk 4,500 crore in 2019, up from Tk 3,500 crore the year before. The demand for ACs has increased at an average of over 15 per cent annually since 2014, which encouraged global brands to set up their own plants in Bangladesh. Around 4.2 lakh units of air conditioners were sold in 2019 while the demand came down to 1.20 lakh in 2020 due to the Covid-19 fallout. Currently, Singer is manufacturing refrigerators, LED TVs and air conditioners at their plants.

Source: https://www.thedailystar.net/business/news/local-production-cools-down-ac-prices-2035185

Enhanced credit limit for apparel to stay until June

Textiles and clothing exporters will continue enjoying the enhanced credit limit under the Export Development Fund (EDF) for six more months as the impacts of the coronavirus pandemic persist, the Bangladesh Bank said. The members of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Textile Mills Association (BTMA) will be able to use the facility until June 30, according to a central bank notice. In May last year, the central bank widened the credit limit under the fund to $30 million from $25 million for the rest of the year for the BGMEA and BTMA members as part of its efforts to help them tackle the economic downturn deriving from the coronavirus pandemic. After the pandemic hit the country, the central bank expanded the fund’s size by $1.5 billion to $5 billion to protect the exporters as shipment collapsed because of the economic slowdown. The BB also cut the interest rate on the loans under the scheme. Exporters can borrow at a rate of 1.75 per cent from 2 per cent previously.

Source: https://www.thedailystar.net/business/news/enhanced-credit-limit-apparel-stay-until-june-2035177