Bangladesh in better position than Sri Lanka, Pakistan to navigate forex crisis: UCB Asset
The common fear regarding whether Bangladesh is next in line for an unmanageable economic crisis like its neighbouring peers Sri Lanka and Pakistan has been cautiously busted by the analysts at UCB Asset Management. In its latest report titled “Is Bangladesh Mirroring Sri Lanka and Pakistan?,” the local asset manager said Bangladesh is in a much better position to navigate the foreign exchange crisis. Keeping in mind the ongoing dollar austerity, the analysts estimate, Bangladesh will spend around $14.1 billion for its most essential imports of fuel and fertiliser and external debt servicing in 2023 assuming there will not be a major deviation in commodity and fertiliser prices and short-term FX debt obligation from current estimation. And, with a mere 3% annual growth the country should end the year with $22 billion in remittance inflow. The $7.9 billion difference would help offset the trade deficit the government aims to curtail by halting nonessential imports so that the forex reserve does not drop too much from the current level of over $33 billion in gross or over $25 billion in net as of December 2022. On the other hand, the reserves of Pakistan and Sri Lanka have already dropped to $5.6 and $1.7 billion respectively. Bangladesh has foreign currency to pay the import bills over the 4.9 months, while import coverage for Pakistan and Sri Lanka now stands at 1.6 and 1 months respectively.
IMF likely to approve loan package for Bangladesh on Monday
Bangladeshi officials have received indications from the International Monetary Fund (IMF) that the multilateral lender’s board has agreed in principle to approve the country’s loan request, according to UNB. Several officials of the Ministry of Finance said that the IMF may approve the loan for Bangladesh on Monday (January 30). An IMF team led by Rahul Anand visited Dhaka from October 26 to November 9, 2022, to thrash out the details of the programme. After that the IMF’s vice president, Antoinette Monsio Sayeh, visited Bangladesh from January 14-18 and praised the economic development and social progress she witnessed during her visit, saying it has left an impression on the whole world. Sayeh also congratulated Prime Minister Sheikh Hasina on that. Former IMF economist Dr Ahsan H. Mansur said that is known of the visits and discussions held with the Ministry of Finance, Bangladesh Bank, National Board of Revenue, Ministry of Planning, Bangladesh Bureau of Statistics (BBS), and others indicates the global lender has reached an agreement to provide $4.5 billion loan to the country.
Stock market gained over Tk 101.85b capital last week
The stock market has passed the fourth week of the current month (January) with a capital gain of Tk 101.85 billion in four days, according to the capital market’s data analysis on Saturday. The capital of Dhaka Stock Exchange (DSE) was Tk 7.56 trillion at the beginning of trading on the first working day of last week. On the last day, after the transaction on Thursday, the capital stood at Tk 7.67 trillion, an increase of Tk 101.85 billion. The capital gain of the stock market in the previous week was Tk 21.49 billion in the previous week, says a UNB report. The investors’ capital increased in the market for two consecutive weeks. In the past week (January 22 to 26), trading was done on five working days. The first trading day marked a fall in the index, followed by a rise in the index in the next four consecutive days. During this period, a total of 387 shares and units were traded in DSE. Among them, 63 companies’ share prices increased, 119 decreased and 205 unchanged.