How inflation leads to liquidity crunch in banks

Soaring commodity prices have put pressure on bank deposits as people are barely having any money left to park in banks after meeting the increased cost of living, some are even breaking their deposits to have both ends met. On top of this, banks’ increased spending on dollar purchases and an upsurge in credit flows to the private sector are drying up liquidity in the banking system. As per the latest available data from the Bangladesh Bank, the total amount of deposits in the country’s banking sector dropped 6.8% to Tk13.65 lakh crore in August this year from Tk14.65 lakh crore in the same month a year ago. The Bangladesh Bank data shows that the banking sector in the country saw its time deposits and demand deposits plummet markedly in recent months, while credit growth has been on an upward trend.

Time deposits are deposited in the bank for a fixed period of time, while in the case of a demand deposit there is no fixed time period involved. In July this year, the volume of demand deposits was Tk1.75 lakh crore this July, which fell to Tk1.60 lakh crore in the following month.

Source: https://www.tbsnews.net/economy/banking/how-inflation-leads-liquidity-crunch-banks-514774

Dhaka Bank inks issuing bank deal with Exim Bank of India

Dhaka Bank signed an issuing bank agreement with Exim Bank of India under the latter’s Trade Assistance Programme in Dhaka yesterday. Emranul Huq, managing director of Dhaka Bank, and Tarun Sharma, chief general manager and chief financial officer of the Exim Bank of India, signed the agreement at the former’s head office in Gulshan, according to a press release. Through this agreement, Dhaka Bank is going to enhance its existing support for corporate and SME clients’ trade finance needs in India. “The present rising global crisis due to the Russia-Ukraine war has greatly disrupted the supply chain of different items,” said Huq.

Source: https://www.thedailystar.net/business/economy/news/dhaka-bank-inks-issuing-bank-deal-exim-bank-india-3144481

Bangladesh, Brunei agree on energy cooperation

Bangladesh and Brunei Darussalam on Sunday agreed to explore mechanisms for long-term collaboration in the energy sector, particularly in the supply of Liquefied Natural Gas (LNG) and other petroleum products to Bangladesh. Visiting Brunei Sultan Haji Hassanal Bolkiah and Bangladesh Prime Minister Sheikh Hasina agreed for a long-term collaboration in the energy sector, said a joint statement issued after the official talks between the two leaders at the Prime Minister’s Office in Dhaka. “In view of Bangladesh’s growing demand for energy and Brunei Darussalam’s standing as a stable and key regional exporter of energy, both leaders agreed to explore mechanisms for long-term collaboration in the energy sector, particularly in the supply of Liquefied Natural Gas (LNG) and other petroleum products to Bangladesh,” said the statement.

Source: https://www.tbsnews.net/bangladesh/energy/bangladesh-brunei-agree-energy-cooperation-514646