BB releases MPS aiming to spur growth, curb inflation
The central bank announced a new monetary policy statement (MPS) on Tuesday for promoting job-centric growth with a restraining approach to curb inflationary pressure on the economy. The MPS for the first half (H1) of the FY focuses on helping the sectors, particularly the productive ones, in achieving sustainable economic growth by reining in inflation. “The monetary policy will be a restrained one like the previous one to facilitate economic growth and curb inflation,” the BB Governor told reporters while formally announcing the MPS. The central bank, however, kept unchanged its domestic credit (DC) target at 15.9 per cent for FY 19. The target of broad money (M2) supply rose to 10.2 per cent for H1 of FY 19 and 12 per cent for H2, from 9.2 per cent of FY 18. Such monetary targets of domestic credit and broad money are sufficient to accommodate real gross domestic product (GDP) growth of up to 7.8 per cent and average annual inflation of up to 5.8 per cent in FY 19. The BB projected the GDP growth ranging between 7.5 per cent and 7.7 per cent in FY 19, assuming a continuation of calm domestic political situation and no further escalation of global trade-related conflicts. On the other hand, the central bank estimated the average inflation to be around 5.4-5.8 per cent in December 2018, while the government set the inflation target at 5.6 per cent for FY 19. The central bank has decided to keep policy rates unchanged at their current levels, with repo and reverse repo rates at 6.0 per cent and 4.75 per cent respectively, due to elevated inflation expectation, exchange rate pressures, and rising global interest rates. The BB also kept unchanged its private sector credit growth target to 16.8 per cent for FY 19.
Stocks back to green after five days of losses
Stocks back to the green on Tuesday, snapping a five-day losing streak, as investors showed on buying spree on sector-wise stocks. DSEX, the prime index of the Dhaka Stock Exchange (DSE), went up by 39.72 points or 0.75 per cent to settle at 5,302 after losing 86 points in the past five days. The two other indices also ended higher. The DS30 index, comprising blue chips, advanced 9.72 points to finish at 1,881 and the DSE Shariah Index rose 10.26 points to close at 1,251. Trading activities also increased to Tk 7.32 billion on the DSE, which was 19 per cent higher than the previous day’s Tk 6.14 billion. A total number of 155,985 trades were executed in the day’s trading session on the DSE with trading volume of 171.89 million securities. The market capitalisation of the DSE came down to Tk 3,841 billion on the day which was Tk 3,813 billion in the previous session. The port city bourse—CSE—ended higher with its CSE All Share Price Index – CASPI – advancing 110 points to settle at 16,325 and the Selective Categories Index – CSCX –gaining 72 points to finish at 9,879. The port city bourse traded 8.95 million shares and mutual fund units worth more than Tk 343 million in turnover.
PKB inducted as scheduled specialised bank
Bangladesh Bank has inducted state-run Probashi Kallyan Bank, which was initially set up as a financial institution for non-resident Bangladeshis, as a scheduled specialised bank. According to a separate circular issued on Monday, the central bank, as per the Section 121 of Bank Company Act 1991, exempted the PKB from the subsection 14 ka (1) in holding shares by the Wage Earners’ Welfare Board.
The BB’s decision came after the finance ministry had given its consent in favour of allowing the migrants’ welfare fund to hold 95 per cent stake in the specialised PKB. The PKB started its operation in April, 2011 with Tk 100 crore in capital to provide collateral-free loans to overseas Bangladeshis as well as to give loans for rehabilitation of expatriate workers on their return home to engage them in various income-generating activities.
Export to Turkey drops sharply in FY18
Country’s merchandise export to Turkey dropped by 16.36 per cent in the past fiscal year (2017-18), according to the data furnished by the Export Promotion Bureau (EPB). It showed that Bangladeshi export to Turkish market declined to $528.27 million in FY18 while the amount was $631.61 million in FY17. Export to Turkey has been declining for the last few years. Total export to the country was $661.88 million in FY16 which dropped in the next year (FY17). Currently, Turkey is providing tariff-free market access for 79.7 per cent products to the Least Developed Countries (LDCs). But the rules of origin of the Turkey GSP scheme are identical to those of the European Union’s (EU) Everything But Arms (EBA).
ADB to provide BR $360m as loan
Asian Development Bank (ADB) will provide US$360 million as loans to Bangladesh Railway (BR). Out of the total amount, ADB will provide $354 million from its hard window –Ordinary Capital Resources (OCR), while the rest 6.0 million from the concessional window—Concessional OCR Lending (COL). The loans will have to be repaid in 25 years, with 5.0 years grace period. BR will purchase wagons, luggage vans, locomotives and will develop its Enterprise Resources Planning for making the railway automated. ADB will also provide additional $500,000 as grant to train drivers of the BR.
ADB to give $357m to develop two power lines
The Asian Development Bank (ADB) has approved an assistance package of over $357 million for a project to develop two power lines to help Bangladesh reach its national goal of ensuring electricity for all by 2021. The investments comprise a $350 million ADB loan and a $7 million grant from the Japan Fund for the Joint Crediting Mechanism (JFJCM) to partially finance new high-technology energy efficient conductors. It also includes a $500,000 grant from the Republic of Korea e-Asia and Knowledge Partnership Fund (EAKPF) to promote socially inclusive growth with gender equality. The Southwest Transmission Grid Expansion Project builds on ADB’s previous work, including the recently approved Rupsha 800 megawatt Combined Cycle Power Plant in the southwest region. The project will develop a 126-kilometre 230 kilovolt (kV) transmission line from Barisal to Faridpur and a 104 km 400 kV transmission line from Bogra to Rohanpur along with substations, transformers and associated extensions and connections.
Local pharma market set to hit $5.11b by 2023
Bangladesh’s pharmaceuticals sector will grow 15 percent year-on-year to reach $5.11 billion by 2023, propelled by high investments by local companies as they seek to grab a bigger share of the global market, said a new study yesterday. By 2022, the market size will be more than doubled to $4.44 billion from $2.02 billion now. Bangladesh’s pharmaceutical industries aim to capture 10 percent of the global generic market as 5 to 7 companies have received approval from top regulatory bodies. Bangladesh exports medicinal products to 144 countries after meeting 97 percent of the domestic demand. Pharmaceuticals exports fetched $103.46 million in the last fiscal year, up 16.03 percent year-on-year. In the first quarter of 2018, the market size of pharmaceutical products in Bangladesh was $2.35 billion and year-on-year growth rate was 8 percent. Per capita consumption of medicine was about $15.36.
Local and Global Stock Indices *
|Index Name||Close Value||Value Change||Percentage Change|
World Commodities *
|Commodity||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)||$69.07||↓1.08||↓1.54%|
|Crude Oil (Brent)||$74.25||↓0.66||↓0.88%|
Major Currencies Exchange Rates Movement in Last Seven Days *
|USD 1||BDT 84.2250|
|GBP 1||BDT 110.4274|
|EUR 1||BDT 98.3916|
|INR 1||BDT 1.2290|
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.