Weak taka cheers up remitters

Remittance income rose 27.64 percent year-on-year to $1.21 billion in November, as the depreciation of the taka against the American dollar made sending money to Bangladesh more lucrative, according to data from the central bank. November’s inflows was also 4.47 percent higher than that of October when migrant workers sent home $1.16 billion, and took the total receipts to $5.76 billion so far in the current fiscal year, up 10.76 percent in the same period from a year earlier. Bankers say the depreciating taka against the dollar has helped Bangladesh receive more remittances in November. The local currency has been depreciating heavily against the American greenback over the last few months, prompting Bangladeshis living abroad to remit more money through banking channel, they said. The inter-bank exchange rate was Tk 82.30 on November 30, up 1.85 percent from Tk 80.80 on October 2, according to the central bank.

Source:
http://www.thedailystar.net/business/weak-taka-cheers-remitters-1499740
http://today.thefinancialexpress.com.bd/last-page/remittance-inflow-rises-11pc-in-first-five-months-1512322621
https://businessnews-bd.net/remittance-inflow-rises/

Foreign credit use to rise for financing budget deficit

A top official in Dhaka has said that the government wants to increase the use of foreign credit in offsetting the budget deficit. Economic Relations Division (ERD) Secretary Kazi Shafiqul Azam on Sunday said there is 05 per cent deficit in the current budget and the government meets up this deficit by taking 3.5 per cent credit from domestic sources and 1.5 per cent from foreign sources. “But we want to increase the foreign part from 2 to 2.5 per cent because of lower interest rate,” said the ERD Secretary while speaking at a press conference to inform journalists about Bangladesh’s participation in the South-South and Triangular Cooperation held recently in Brazil.

Source:
http://thefinancialexpress.com.bd/economy/bangladesh/foreign-credit-use-to-rise-for-financing-budget-deficit-1512314310
http://www.dhakatribune.com/business/economy/2017/12/03/foreign-credit-budget-deficit/

Foreign exchange reserves drop in November

Bangladesh’s foreign exchange reserves fell in November, although it rose by four per cent than that of previous year. November’s foreign exchange reserve fell to US$32.60 billion from the previous month’s $33.45 billion, according to data by the central bank. A Reuters report on Sunday citing comments by a senior central bank official said that the monthly drop was fuelled by a rise in imports. But the reserves were sufficient to cover about 10 months’ worth of imports, he added. Steady garment exports and remittances from Bangladeshi expatriates, the key drivers of more than $250 billion economy, have helped the country’s foreign exchange reserves grow steadily in recent years. Economic growth hit a record 7.28 per cent in the financial year ending June 2017, up from 7.11 per cent the previous year.

Source: http://thefinancialexpress.com.bd/economy/bangladesh/foreign-exchange-reserves-drop-in-november-1512306298

Capital shortfall plagues 9 banks

Nine out of 57 banks have failed to meet minimum capital needs, indicating that they require further recapitalisation through the use of taxpayers’ money. Latest Bangladesh Bank data showed that these nine banks, including trouble-hit Farmers Bank, faced a capital shortfall of Tk 17,700 crore as of September this year, up by over Tk 5,000 crore a quarter ago. State-owned banks usually face capital shortfalls in Bangladesh but this time a private one, Farmers Bank, got listed for four years of lacklustre performance since its inception. Eight state banks had a capital shortfall of Tk 12,683 crore at the end of June this year despite the government’s injection of Tk 2,000 crore this fiscal year. Economists underscored that the BB should take immediate measures to address the problem as such a situation sent a negative message to the international community and local businesspeople that the banking sector was deteriorating.

Source:
http://www.thedailystar.net/business/capital-shortfall-plagues-9-banks-1499734
http://today.thefinancialexpress.com.bd/first-page/nine-banks-capital-shortfall-swells-to-tk-177b-in-q3-1512321923
http://www.newagebd.net/article/29707/9-banks-face-tk-17699cr-capital-shortfall

Bad debt grows faster than credit in Bangladesh!

Only 20 per cent of the loans written off by banks in Bangladesh have been recovered in the last 12 years, says a new report. The study by LR Global Bangladesh says the country has the highest share of non-performing loans or NPL and lowest capital adequacy ratio or CAR, compared to its peer economies. Bad debt grew faster than credit in the last five years, according to the asset management firm, an affiliate of New York-based LR Management Investments. The aggregate credit grew at a compound annual growth rate of 13 per cent between 2012 and 2016, mostly in tandem with the nominal GDP growth. By the end of 2016, non-performing, restructured and rescheduled loans stood at 17 per cent of total outstanding loans, according to the report. The high loan defaults mean that the financial sector lacks the funds to absorb any sudden deterioration of asset quality, the report says. It says non-performing loans grew at a faster pace in private banks than in the state-owned lenders in the last five years.

Source: http://thefinancialexpress.com.bd/economy/bangladesh/bad-debt-grows-faster-than-credit-in-bangladesh-1512318201

House Building’s rural home loan scheme fares well

The rural housing loan scheme, introduced by Bangladesh House Building Finance Corporation (BHBFC) in July, got off to a flying start due to the huge demand for high-rise residential buildings in the face of economic development. In the four months since its introduction, loans amounting to Tk 72.36 crore were sanctioned, which is 60.50 percent of the total home loans approved by the BHBFC during the period. The demand for loans was particularly high in the northern region of the country. Some Tk 9.14 crore was disbursed in the Rangpur zone, which is the highest, followed by Rajshahi at Tk 5.66 crore. The BHBFC is offering a comparatively lower interest rate for rural clients to encourage them to take loans. The interest rate for rural areas is 8.5 percent in contrast to 9.5 percent for the Dhaka and Chittagong metropolitan areas. The loan ceiling for rural borrowers is Tk 60 lakh. “The remittance inflow has boosted the rural economy, prompting the village people to build their houses by taking loans,” said Debasish Chakrabarty, managing director of BHBFC.The low interest rate is also a great attraction to the rural people, he said. The huge demand for housing loans from remote areas has prompted BHBFC to take house building finance from the Islamic Development Bank.

Source: http://www.newagebd.net/article/29576/number-growing-amid-lax-bsec-monitoring