Forex reserves hit record USD 28.27 billion
The country’s foreign exchange reserves hit record USD 28.27 billion at the end of March because of a lack of demand for greenbacks from businesses amid uncertainty. Bangladesh Bank data showed that the foreign exchange reserves stood at USD 28.27 billion on March 31 as the central bank had continued with the purchase of the dollar from the local banks to keep the taka stable against the greenback. The reserves had crossed the USD 28.0 billion mark for the first time on February 25, 2016. Around USD 81.0 million were stolen from the BB reserves with the New York Federal Reserve Bank on February 5 but flow of export receipts and remittance helped the growth in the reserves. BB officials said moderate growth in export earnings and slower growth in import payment helped accumulation of the dollars despite a fall in remittance inflow. The central bank purchased more than USD 2.50 billion in the nine months of current fiscal year starting from July so that the value of taka did not appreciate against the dollar. Before the current fiscal year, the BB had purchased greenbacks worth around USD13.40 billion from the local banks between FY13 and FY15 to keep the taka stable against the dollar, he said.
Move to make MDs of AMCs more accountable
The securities regulator has moved to make the managing directors (MDs) and chief executive officers (CEOs) of Asset Management Companies (AMCs) more accountable to ensure proper management of the mutual funds (MFs), officials said. To ensure the accountability of chief executives of the AMCs, the securities regulator has included the provision of taking the regulatory consent in appointing the MDs and CEOs of the AMCs. The regulatory move came following some irregularities earlier found with the chief executives of the AMCs. The officials of the Bangladesh Securities and Exchange Commission (BSEC) said their initiative would enhance proper functioning of MFs. Presently, the merchant banks and stock exchanges are required to take consent from the securities regulator in appointing their MDs. “The regulator has included the provision of taking the regulatory consent in appointing the MDs and CEOs of AMCs in draft amendment brought to the Securities and Exchange Commission (Mutual Funds) Rules, 2001,” said a BSEC official. The official said the regulator would not allow the renewal of appointment if any legal dispute is found against the MD or CEO of AMCs.
No banking commission right now, says Finance Minister
Finance Minister AMA Muhith said on Sunday the government had no plan to form a banking commission right now to further look into irregularities in the country’s banking sector, reports UNB. “I’ve no desire to form a banking commission right now,” he said adding that the government may consider the formation of such a body after observing the outcomes of the ongoing inquiries into some recent banking scams. The finance minister made the remark while exchanging views with the members of the Economic Reporters Forum (ERF) at the Secretariat as part of pre-budget discussions with various stakeholders. Muhith said, “Though inquiries into some banking incidents (scams) are rather limited, we’ll first see the probe results. Then we can determine whether the formation of a banking commission is essential.”
GAS DISTRIBUTION CHARGE: BERC yet to dispose of Titas plea in 5 months
The Bangladesh Energy Regulatory Commission is yet to dispose of an application of the Titas Gas Transmission and Distribution Company for increasing distribution charge in five months keeping its share market investors in confusion. Amid heavy fall in share prices, Titas in November announced on the Dhaka Stock Exchange website that it would submit an application with the BERC to reinstate its previous distribution charge after the commission had slashed the charges in August. BERC officials said that Titas had submitted an application in December for distribution charge hike but the commission has not yet taken any decision in this regard. ‘Whether the BERC accepts or rejects, it should not take such a long time for disposing of an application of a listed company as general investors’ interest is involved with the matter,’ said a stockbroker. The BSEC in November also launched an investigation into the unusual fall in share prices of Titas after the BERC’s decision to cut distribution charge that ate into the company’s profit. Earnings per share of the entity for the period of July-September last year declined to BDT 1.57, from BDT 2.37 a year earlier as the BERC’s decision came into effect form September 1 of the year.
Income inequality on the rise: Finance Minister
Income inequality is on the rise in Bangladesh although the rate of extreme poverty dropped significantly, Finance Minister AMA Muhith said yesterday. More than 25% people live in poverty and around 11% in extreme poverty, according to the Planning Commission the government plans to bring the country’s extreme poverty rate down to 4.5% by 2021, riding on expectations that gross domestic product will grow 7% a year in the next six years. The proportion of the extremely poor population declined to about 18% in 2010 from 41% in 1990, according to the official Household Expenditure Survey. “Income inequality will widen, but it should not be allowed to increase such that rebellious incidents take place,” Muhith said at a meeting with the leaders of the Economic Reporters Forum (ERF) at his secretariat in Dhaka. More than 15 million Bangladeshis have moved out of poverty since 1992, according to a World Bank overview of Bangladesh economy. Bangladesh has maintained an impressive track record on growth and development.
More focus sought on multinational companies’ tax avoidance
The tax authorities should pay more attention on corporate tax avoidance by multinational companies, said experts in a dialogue on Sunday in the city. Action Aid Bangladesh, a UK-based non-governmental organization, arranged the dialogue on ‘getting to good: towards responsible corporate tax behavior.’ The experts in the dialogue said MNCs are avoiding paying a huge amount of corporate taxes in countries like Bangladesh, taking advantage of legal loopholes, complicated rules and regulations, and bilateral treaties on avoidance of double taxation. Such avoidance has been depriving the government of its justified share of resources and hence the government cannot spend enough in the social sectors like health and education for its citizens, they added. They said preventing tax avoidance by the MNCs is critical for Bangladesh for realizing potential taxes from the sector to bear social sector expenditures.
Bangladesh to start LoC projects with procurement of vehicles from India
Development projects using second USD 2.0 billion Indian line of credit (LoC) will first begin with procurement of trucks and buses from India. The Ministry of Road Transport and Bridges recently wrote to the Planning Commission for considering two projects worth USD 102.0 million under the new LoC. Under the two projects, Bangladesh Road Transport Corporation (BRTC) will buy 500 trucks and 600 buses in line with the LoC deal under which 75% goods and services will have to be procured from the Indian market. The rest 25.0% can be sourced from Bangladesh market or any other third country. After nearly one-year negotiation, Dhaka and New Delhi signed an agreement on 2nd LoC on March 9. The above two projects are of the 13 development projects planned to be implemented using LoC.
World Stock and Commodities
|Index Name||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)*||$36.37||(0.42)||(1.14%)|
|Crude Oil (Brent)*||$38.33||(0.34)||(0.88%)|
|Dow Jones Industrial Average||17,792.75||+107.66||+0.61%|
|USD 1||BDT 78.38*|
|GBP 1||BDT 111.47*|
|EUR 1||BDT 89.25*|
|INR 1||BDT 1.18*|
*Currencies and Commodities are taken from Bloomberg.