Remittance inflow rebounds onto upturn, crosses USD 1.0 billion in January

A drive across the country and abroad to plug the holes began to remedy recent remittance downturn, boosting monthly turnover above USD 1.0 billion again in January. As part of the moves, a research group is now working to find out various factors, including the flow of inward remittances using illegal channel, which cause fall in the official receipts of remittances. The remittances from Bangladeshi nationals working abroad were estimated at USD 1.01 billion in January, up by USD 50.7 million over the previous month. In December 2016, the remittance was USD 958.73 million. It was USD 951.4 million in November. The flow of inward remittances fetched USD 1.15 billion in January 2016. The inflow of overall remittances dropped by nearly 17 cent in the first seven months of the current fiscal year (FY) against the same period of the last fiscal. The remittance receipts came down to USD 7.2 billion during the July-January period of the FY 2016-17 from USD 8.7 billion in the same period of the previous fiscal, the Bangladesh Bank (BB) data showed. Under the relaxations, the amount of security deposit for drawing arrangement came down to USD 10,000 from USD 25,000 while security deposit for Non-Resident Taka (NRT) account got trimmed down to BDT 0.2 million from BDT 0.5 million. Besides, the BB officials are scheduled to meet with senior officials the Ministry of Expatriates’ Welfare and Overseas Employment on February 09 to discuss the overall situation.

Source:
http://print.thefinancialexpress-bd.com/2017/02/02/163688
http://www.thedailystar.net/business/remittance-continues-its-slide-1354576
http://www.newagebd.net/article/8265/remittance-drops-for-7th-month

Sovereign wealth fund to take off with reserves

The much talked-about sovereign wealth fund is likely to be formed with Bangladesh Bank’s foreign currency reserves and finances from multilateral donor agencies following recommendations from a high-powered committee. For the past decade, the economy had been stuck in the 6 percent growth trajectory and the lack of adequate infrastructure has been blamed for it. To address the issue, the government has decided to use the sovereign wealth fund to bankroll long-term physical infrastructure projects like the Padma bridge for the most part. Foreign currency reserves currently stand at upwards of $32 billion, which is enough to honour eight months’ import bills. But the central bank does not just sit on the reserves: it invests in lucrative areas. In recent years the rate of interest in the world market has dropped sharply, and in many sectors it is zero percent. As a result, Bangladesh Bank’s returns from its investment have shrunk. This prompted the government to devise ways to utilise the reserves for a cause that will accelerate the economic growth and the idea of creating a sovereign wealth fund came up. In 2015, the government formed a seven-member team led by Bangladesh Bank Deputy Governor SK Sur Chowdhury to evaluate the prospects of creating the fund. The team submitted its report to Finance Minister AMA Muhith in December. In its report, the committee said the government may buy foreign currencies from the central bank with funds raised by issuing treasury bonds in local currency.

Source: http://www.thedailystar.net/business/sovereign-wealth-fund-take-reserves-1354579

Import grows in H1 as companies ramp up capital machinery purchase

The country’s imports grew by 11.25% or USD 2.3 billion in the first-half (H1) of the current fiscal year (FY), driven by robust procurement of capital machinery, officials said. The actual import in terms of settlement of letters of credit (LCs) rose to USD 22.6 billion in the July-December period of FY 2016-17 from USD 20.3 billion in the same period of the previous fiscal, according to the central bank’s latest statistics. In contrast, opening of LCs, generally known as import orders, increased by 9.3% or USD 1.96 billion to USD 23.0 billion in the first six months of FY’17 from USD 21.06 billion a year ago. Import of capital machinery or industrial equipment used for production rose by 60.0% to USD 2.87 billion in the H1 of this fiscal year against USD 1.7 billion of the same period of FY 16. The capital machinery imports for the apparel, pharmaceuticals, and food processing and shipbuilding industries increased significantly in the H1 of FY 17, according to the BB official. Meanwhile, import of industrial raw materials grew by 4.92% to USD 8.0 billion during the period under review from USD 7.7 billion in the same period of the FY’16. During the period, import of machinery for miscellaneous industries witnessed a 7.11% growth to USD 2.35 billion from USD 2.2 billion in the same period of the previous fiscal. On the other hand, import of intermediate goods, like coal, hard coke, clinker and scrap vessels, increased by 9.82% to USD 1.8 billion in the first six months of this fiscal from USD 1.7 billion in the same period of the FY 16. However, import of petroleum products dropped by 19.63% to USD 1.2 billion during the July-December period of FY 17 from USD 1.4 billion in the same period of the previous fiscal.

Source: http://print.thefinancialexpress-bd.com/2017/02/02/163662

Foreign funds in stocks jump on bright data

Net foreign investment in the capital market soared more than nine times year-on-year in January, as overseas investors kept up their buying spree of Bangladeshi shares for five months. Foreign investors bought shares worth BDT 6.1 billion and sold shares worth BDT 4.3 billion to take their net investment to BDT 1.9 billion in January, according to data from the Dhaka Stock Exchange. But the sales outstripped purchases during the same period a year ago, resulting in a negative position. The investors bought shares worth BDT 3.2 billion and sold shares worth BDT 3.5 billion in January last year. Foreign investors continued to inject more funds into Bangladesh, a frontier and emerging market in the region, analysts said. Also known as portfolio investment, foreign investment accounts for only 1.0% of the premier bourse’s total market capitalization, which stood at BDT 3.7 trillion at the close of trade yesterday. Net foreign investment in 2016 was BDT 13.4 billion, up from BDT 1. 9 the previous year.

Source: http://www.thedailystar.net/business/foreign-funds-stocks-jump-bright-data-1354585