Remittance inflow drops by 1.8% in Jul-Mar
The remittance inflow in the first nine months of the current financial year, 2015-16, decreased by 1.8% to USD 11.1 billion from USD 11.3 billion received in July-March of FY15, according to the Bangladesh Bank data released on Monday. The inward remittance plays a major role in increasing the consumption power of the people, he said, adding, ‘The consumption capacity of the people will decrease, if the remittance inflow maintains a downward trend which will ultimately hit the GDP growth.’ The BB data shows that the inward remittance also decreased to USD 1.3 billion in March against USD 1.3 billion in the same month of last year. A BB official said one of the major causes of the decline in inward remittance was the lower price of petroleum products on the global market. The majority of the Bangladeshi expatriate workers are now working in Middle East countries and the economies of the region mainly depend on their income from petroleum products, he said. The lower petroleum prices have hit the business of the Middle East, resulting in a squeezing of their expenditures. Besides, the government has also failed to export human resources to new markets like Malaysia, said the banker. The government should take prompt actions to expand the new markets to export human resources to boost the inward remittance.
Cash incentives raised for leather-textile-shrimp exports
Bangladesh Bank has increased its cash incentives for leather, textile and shrimp exporters. It increased the incentive for export of leather goods to 15.0% from 12.5%. The increased aid will be effective only in case of exporting leather products through cargo during the financial year 2015-16 as per government decision, said a BB circular issued yesterday. According to the circular, the previous applications for cash incentive against the exported leather goods, which have already been settled during this financial year, will also be entitled to get an additional 2.5% cash aid. However, the exporters will have to submit applications for the additional cash assistance within 30 days from the date of issuing the circular. In another circular, the central bank also enhanced the existing ceiling of cash aid against the frozen shrimp and other fishes. The ceiling of cash incentive for frozen shrimp has been increased to USD 5.0 per pound from USD 3.8 and for other fishes to USD 2.0 from USD 1.1, according to the circular. The government has also increased cash incentive for the export of RMG goods and textile products through cargo shipment to 4.0% from existing 2.0%, said another BB circular issued on the same day. The exporters, who already received 2.0% cash incentive during the current financial year, will also get the additional 2.0% incentive subject to submit applications within 30 days from the issuing date of the circular.
Time limit for adjustment of excess exposure: DSE makes plea to Bangladesh Bank for extension
Dhaka Stock Exchange (DSE) has made a four-point proposal to the central bank seeking its immediate consideration to revive the country’s capital market from the continuous ‘bearish’ trend, officials said. According to DSE officials, a delegation of the premier bourse Monday submitted the proposal to Fazle Kabir, the newly appointed governor of Bangladesh Bank (BB) while making a courtesy visit. In its proposal, the DSE proposed for extending the time limit for adjustment of excess exposure of the Bank’s investment in the capital market up to 2020. As per existing deadline, the banks will have to bring down their stock market exposure to 25% of their capital by June this year. The DSE has also proposed to calculate bank’s exposure on the basis of only the listed securities in stock exchanges. Recently, the central bank deducted the bank’s capital made into subsidiaries from the exposure. According to another DSE proposal, long-term equity investments or strategic holdings should be excluded from the capital market exposure as per a circular previously issued by the central bank. The premier bourse has also proposed the BB’s monitoring on capital market exposure on quarterly basis.
Government set to cut oil prices in a week: ‘Rates likely to drop by BDT 20.0 per liter’
The government is set to slash the domestic prices of diesel, petrol, octane and kerosene too after cutting the price of furnace oil. The decision of the price cut could come within a week, a senior official of the Energy and Mineral Resources Division (EMRD) under the Ministry of Power, Energy and Mineral Resources told the FE on Monday. He said the decision was taken during a meeting of Prime Minister Sheikh Hasina with top officials of EMRD and the Power Division on Sunday. The petroleum products’ prices would be slashed following a downward rally of oil price in the international market, said the official. The officials concerned could not say the extent of the price cut, but indicated that it might be around BDT 20.0 per liter. The Premier in her previous stance was against slashing of petroleum products until the loss of the state-run Bangladesh Petroleum Corporation (BPC) is realized. However, the government on Thursday cut the domestic price of furnace oil, which is mainly used in power plants for electricity generation. MPEMR slashed the pump price of furnace oil by 30.0% to BDT 42.0 per liter from its previous price of BDT 60.0 per liter through an executive order. The prices of other petroleum products were kept unchanged.
FY17 budget deficit up by BDT 51.0 billion
The budget deficit for the next fiscal year has gone up by BDT51.95 billion, although as a proportion of total expenditure it has dropped 6% from the fiscal year’s revised outlet. The deficit in the current fiscal year was BDT 865.8 billion and is expected to be BDT 917.7 billion in the next budget, according to the 2016-2017 budget outline obtained by the Dhaka Tribune. However, as proportion of the budget, the deficit has fallen from 32.0% to 26.0%. The forthcoming budget figures are set to be fixed at the budget management committee and fiscal coordination council meetings on April 10 at the Finance Ministry presided over by Finance Minister AMA Muhith. The next fiscal’s budget may be set at BDT 3.4 trillion, about 15.0% larger than this fiscal’s BDT 2.95 trillion. Most of the increased expenditure is to be spent for the payment of government salaries in accordance with the new pay scale which started from last July, Finance Ministry officials said. The government has also set a revenue earning target for the next fiscal year at BDT2.48 trillion, which is about 16% higher than the last year’s target of BDT 2.1 trillion, and 40.3% higher than the BDT 1.8 trillion it actually earned this fiscal according to the outline. The budget outline estimates a GDP of BDT 19.5 trillion for the fiscal year 2016-17, 13.6% higher than current one.
Bangladesh to ratify trade facilitation agreement of WTO
Bangladesh is ready to ratify the trade facilitation agreement of the World Trade Organisation, committing to an easy flow of goods across borders and lowering the costs of doing business, the commerce ministry said yesterday. “We are preparing to ratify the TFA,” said Hedayetullah Al Mamoon, senior commerce secretary. The WTO adopted the TFA in its ninth ministerial conference in Bali in December 2013 to save money and time spent on international trade by simplifying the rules of customs and tariff. The TFA will be put in place once two-thirds of the 162 WTO members formally accept the agreement, according to the Bali Declaration of the WTO. So far, 57 countries have ratified the TFA. Brazil was the latest country to ratify the deal on March 29 during a visit of Roberto Azevedo, director general of the WTO. The TFA is about simplifying and standardizing the customs procedures, reducing the time and costs of moving goods across borders, Azevedo said in a statement. For developing economies, this could mean a boost in exports of almost USD730 billion per year. One of the major commitments of the TFA is the introduction of paperless business worldwide, which is expected to slash the cost of doing business by 10-15%. The cost of doing business, particularly in the least-developed countries, is higher as importers and exporters have to pay extra money as bribe in customs, transportation and to process other documents.
Government downsizes ADP to BDT 880.0 billion: NEC meet may finalize the revised plan today
The government is set to downsize the current Annual Development Program (ADP) by 9.3% to BDT 880.0 billion today (Tuesday) amid slow budget execution, officials said. In the tailoring of development budget, they added, there will be deeper cuts into the funds available from foreign assistance. Executing agencies are apparently averse to taking much from the foreign aid probably for associated formalities and strict monitoring by the international development partners. Officials said the Planning Commission (PC) has already cut the allocation from the original BDT 970.0 billion ADP for the current financial year (FY), 2015-16. In the revision the transport sector has been placed on top of the priority list, as there are mega projects undertaken for building much-needed communications infrastructures. Presided over by Prime Minister Sheikh Hasina, the National Economic Council (NEC), in its meeting today (Tuesday) in Dhaka, is likely to finalize the draft revised ADP for the rest of the current fiscal year. Officials at the PC said they in the proposed RADP slashed the least amount of money from the available allocation from government’s own resources while a higher amount from the project aid confirmed by the development partners for disbursement.
Aman Feed to invest BDT 24.5 million in associate company
The Board of Directors of Aman Feed, a fisheries and livestock feed producer, has decided to invest BDT. 24.5 million in its associate company, said a statement posted on the Dhaka Stock Exchange (DSE) website Monday. Aman Feed will invest the said amount in the ordinary shares of the associate company AKIN Feed Limited as a sponsor shareholder equivalent to 49.0% of its initial total paid-up share capital consists of 24,50,000 ordinary shares of BDT 10 each, said the statement. AKIN Feed has been incorporated as a public limited company and its main business is to manufacture floating fish feed. Aman Feed, which was listed on the Dhaka bourse in September, 2015, has also signed business deal with two non-listed companies recently — Bengal Feed & Fisheries and Tamim Agro — to meet the growing demand of finished feed.
World Stock and Commodities
|Index Name||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)*||$35.55||(0.15)||(0.42%)|
|Crude Oil (Brent)*||$37.59||(0.1)||(0.27%)|
|Dow Jones Industrial Average||17,737.00||(55.75)||(0.31%)|
|USD 1||BDT 78.35*|
|GBP 1||BDT 111.77*|
|EUR 1||BDT 89.27*|
|INR 1||BDT 1.18*|
*Currencies and Commodities are taken from Bloomberg.