Bangladesh Bank has recently appointed Faisal Ahmed as its chief economist. Ahmed has been serving as the senior economic adviser to the governor of Bangladesh Bank since August 2015. Previously, he was the IMF resident representative in Cambodia during 2011-2015, a senior economist in the Asia and Pacific, Monetary and Capital Markets departments, and a core member of the emerging markets surveillance team at the IMF. Ahmed holds a PhD and an MA in economics from the University of Minnesota, an MFin from Princeton University. He is also a CFA Charterholder.
The annual inflow of Foreign Direct Investment (FDI) increased by 4.40 per cent in the last calendar year, according to the latest data released by the central bank on Tuesday. The annual statistics on FDI showed that net inflow of FDI stood at US$ 2.33 billion in 2016 while the amount was $ 2.23 billion in 2015. Usually, net inflow of FDI is derived by deducting the value of disinvestment from the gross inflow of FDI.
BSEC set to seek more easing of Bangladesh Bank rules
The Bangladesh Securities and Exchange Commission is going to formally request the central bank to exclude banks’ and non-bank financial institutions’ investments in any open-end mutual fund from the entities’ capital market exposure. The BSEC has taken the initiative with a view to bringing more funds from banking and financial sectors to the capital market through the open-end mutual funds. The commission is in a process to finalise a proposal in this regard for submission to Bangladesh Bank soon, BSEC officials said. The issue was first raised at a financial sector regulators’ coordination meeting in February this year where the central bank advised the capital market regulator to submit a formal proposal for further consideration. As the Bank Companies Act, 2013 do not allow any bank to invest more than 25.0% of their four heads of capital in the stock market on solo basis, a very few banks have the scope to increase their investments in capital market after their capital market exposure adjustment with the central bank’s policy support in May 2016.
Bangladesh’s economy is expected to grow at 6.9% this year, according to a latest report. The growth in GDP (Gross Domestic Product) is forecast to be even better to grow at 7.0% next year (2018), said the World Economic Outlook (WEO) released Tuesday by the International Monetary Fund (IMF) ahead of the World Bank and IMF’s Spring Meetings that begins in Washington DC on Friday. The WEO projection is, however, not better than the government’s target to achieve it at 7.2% in the current fiscal year, but little better than the latest World Bank’s projection at 6.8%.
Global credit rating agency Moody’s Investors Service said it has retained its rating (Ba3) for Bangladesh’s sovereign credit. The country maintained the stable outlook on the ratings, the agency said on Tuesday in its report ‘Global Credit Research-2017’. Moody’s also affirmed Bangladesh’s Ba3 issuer, senior unsecured ratings and NP short-term issuer ratings. The rating is driven by strong growth, macroeconomic stability and access to concessional funding, the report said. According to the report, Bangladesh’s Baa3 local currency bond and deposit ceilings remain unchanged. Ba2 country ceiling for foreign currency debt and B1 country ceiling for FC bank deposits also remain unchanged. Bangladesh’s Ba3 government bond rating is supported by the country’s robust and stable growth performance, a core credit strength, and relatively low government debt burden, the report said. Private consumption is a key contributor to Bangladesh’s economy, accounting for about 70.0% of total GDP.
Financial reporting framework critical for state enterprises
A comprehensive financial reporting framework for state-owned enterprises (SoEs) and public sector entities (PSEs) is a must to ensure accountability in the use of public resource and money, discussants said at a workshop yesterday. The level of compliance in the government business entities is not encouraging in the absence of any statutory obligations and enforcement mechanism for compliance, they said. All financial transactions of the ministries and their subordinate departments are carried out under a national budget execution system through various accounts offices under the Controller General of Accounts. But the accounting system does not comply with any international accounting or financial reporting standards, they said, while requesting the government to adopt the International Financial Reporting Standards (IFRS) and the International Accounting Standards for the entities.
Record BDT 570.0 billion project aid likely in next fiscal’s ADP
The government is likely to allocate a record BDT 570.0 billion project aid (PA) for the next fiscal year’s development budget. The Rooppur power plant alone will eat up a significant amount of the external funds, officials said Monday. Officials said the Rooppur project alone has been given more than BDT 80.0 billion allocation which has led to rise in the proposed size of the PA by 73.0% for the next financial year (FY) 2017-18 compared to the current fiscal’s outlay.
Bangladesh is on course to become self-sufficient in billet manufacturing, thanks to huge investment by large steel mills to make the main raw material for rod amid the growing demand. The country’s billet production capacity more than doubled to nearly 3.5-4.0 million tons per year, accounting for more than two-thirds of the total yearly demand. Three years ago, the capacity was between 1.0 and 2.0 million tons, said industry insiders. BSRM bumped up its billet making capacity almost four times to 13 lakh tons in the last one and a half years as part of its plan to ensure control over raw materials by cutting import dependency. Other large mills, like Abul Khair Steel, Kabir Steel Re-rolling Mills and GPH Ispat, also enhanced their billet making capacity to cater to the rising demand for steel.
Mobile operators call for lifting VAT on internet use
Mobile phone operators yesterday urged the government to withdraw value-added tax and other duties on the use of internet, in the upcoming national budget. Users currently have to pay 15.0% VAT, 5.0% supplementary duty and 1.0% surcharge on internet use. Withdrawal of the VAT from internet use is a must to build a knowledge-based society, said TIM Nurul Kabir, secretary general of the Association of Mobile Telecom Operators of Bangladesh (AMTOB), at a pre-budget meeting at the National Board of Revenue.
Agricultural machine makers want duty waiver on import of all spare parts
The Agricultural Machinery Manufacturers Association, Bangladesh on Tuesday sought a waiver of duty imposed on import of spare parts required for manufacturing farm machinery including power tiller, thresher and riper as part of the government’s efforts to mechanise the country’s agriculture sector. At a pre-budget discussion with the National Board of Revenue in Dhaka, the association said currently manufacturers have to pay customs duty up to 60.0% on import of 34 spare parts as only nine spare parts are enjoying duty waiver. NBR chairman Md Nojibur Rahman chaired the discussion. Manufacturers need all 43 spare parts to produce the farm machinery, said AMMA-B president Ariful Islam. He also demanded withdrawal of value-added tax imposed on agricultural machinery at the stages of production and sales, saying that 15.0% VAT on both the stages pushed up the prices of the products and discouraged farmers to mechanise their farming process.
World Bank to give USD 74.0 million to help improve e-government services, air quality
The government yesterday signed two financing agreements amounting to USD 74.0 million with the World Bank to improve the country’s e-government services across its agencies as well as improve the air quality of Dhaka. The loans will have a 38-year term, including a six-year grace period, and a service charge of 0.75%. Of the sum, USD 39.0 million go towards scaling up the e-government infrastructure and services that will aid in improving public sector administration and public services. The remaining USD 35.0 million will go to the Clean Air and Sustainable project that involves air quality management initiatives and testing models for improving traffic management system in Dhaka.The financing will help establish five additional air quality monitoring stations in addition to the 11 existing ones and a central air quality laboratory.
Major Currencies Exchange Rates Movement in Last Seven Days
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.
ABOUT DHAKA BANK
Dhaka Bank has truly cherished and brought into focus the heritage and history of Dhaka and Bangladesh from Mughal outpost to modern metropolis. Most of its presentation, publications, brand initiatives, delivery channels, calendars and financial manifestations bear Bank’s commitment to this attachment.