August import LC openings highest in last 5 months
The opening of import letters of credit (LCs) in August was the highest in the last five months even though settlements decreased due to the ongoing dollar crisis. According to central bank data, import LCs worth $5.59 billion were opened in August, the second month of the current fiscal year. LC opening has been dwindling since March, which saw $5.79 billion worth of LCs, hitting a three-year low of $4.23 billion in June, the last month of the last fiscal year. But imports started to pick up in the new fiscal year. In order to keep the economy running, LC opening should be increased further, added the seasoned banker. However, when compared year-on-year, LCs opening fell by 14% in August. LCs worth $6.52 billion were opened in August 2022. Amidst these challenges, Bangladesh’s foreign exchange reserves have dipped below $23 billion, with the central bank selling $2.3 billion from reserves in the first two months of the current fiscal year.
Bank interest rate spread hits 40-month high
The interest rate spread – the difference between deposit and lending rates – hit a 40-month high of 3.29% last July when the monetary policy was unveiled for the second half of the year, creating a scope for banks to increase their lending rates by more than 1%. Bankers expressed their satisfaction, saying that a spread of at least 3% is required for a bank to cover its running costs comfortably. According to data from the Bangladesh Bank, banks received deposits at an average interest rate of 4.46% in July and lent the funds at 7.75% interest. A higher spread of 4.07% was recorded in March 2020, when the interest rates on deposits and lending were 5.51% and 9.58%. However, the lending activities for CMSMEs and consumer loans may be subject to an additional fee of up to 1% to cover supervision costs, and there will be no changes in the interest rates applicable to credit card loans. SMART was 7.10% in June. Accordingly, banks have the opportunity to charge a maximum landing rate of 10.10% in July. Basically, this is why the banks have increased the interest rate spread.
Abu Dhabi signs $100m deal with Egyptian bank to boost UAE exports
In a move aimed at reinforcing economic and trade relations between the UAE and Egypt, Abu Dhabi Exports Office, the export-financing arm of Abu Dhabi Fund for Development, has signed a pivotal financing agreement with the National Bank of Egypt. Under the agreement, a revolving loan facility worth $100 million has been established, aimed at supporting UAE export transactions to Egypt. The initiative is strategically designed to bolster economic activities and cross-border relations, further enhancing the trade landscape between the two countries, according to a report by the Emirates News Agency, also known as WAM.
Local and Global Stock Indices *
|Index Name||Close Value||Value Change||Percentage Change|
|↓ 198.78||↓ 0.57 %|
|FTSE100||$ 7,426.14||↓ 11.79||↓ 0.16 %|
|Nikkei 225||$ 33,160.55||↓ 80.47||↓ 0.24 %|
World Commodities *
|Commodity||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)||$ 87.24 ||↓ 0.30||↓ 0.34 %|
|Crude Oil (Brent)||$ 90.36 ||↓ 0.24||↓ 0.26 %|
|Gold Spot||$ 1,919.96||↑ 3.40 ||↑ 0.18 %|
Major Currencies Exchange Rates Movement in Last Seven Days *
|USD 1||BDT 110.0000||BDT 110.0000|
*World Commodities & Local and Global Stock Indices data are taken from bloomberg.com<
* Exchange Rates are taken from BB website, as on latest update.<