Rising Buyer’s credit puts pressure on reserves, exchange rate
Importers’ appetite for buyer’s credit from overseas sources shot up last year, in an ominous development for the country’s foreign currency reserves and the exchange rate. Buyer’s credit is a loan facility extended to an importer by a bank or financial institution to finance the purchase of capital goods or services and other big ticket items. It is a very useful mode of financing in international trade since foreign buyers seldom pay cash for large purchases, while few exporters have the capacity to extend substantial amounts of long-term credit to their buyers. The interest rate on buyer’s credit from foreign sources, which the Bangladesh Bank allowed for importers in 2008, tends to be 6 percent in contrast to 9 to 10 percent from local banks and financial institutions. At the end of 2018, total outstanding buyer’s credit from foreign sources stood at $10.16 billion, up 29.92 percent year-on-year, according to data from the BB. The uptick in foreign currency buyer’s credit gives a boost to the private sector and the reserves, but the euphoria is short-lived: the loans must be paid in a year’s time.
Nagad’s stride in digital Financial sector
Nagad on Saturday introduced its Digital KYC Registration process for the people of Bangladesh. The service, first of its kind in Bangladesh was launched on the day at an event in the city. The event was attended by Mustafa Jabbar, Posts, Telecommunications and ICT Minister; Acting Secretary, Ministry of Posts, Telecommunications and ICT;Director General, Bangladesh Post Office, Managing Director, Nagadalong with other official of the Bangladesh Post Office and Nagad. As per the Minister, the government of Bangladesh has been proactively introducing services to the benefit of the people. In that continuation, Nagad’s stride is in accordance to the ‘Digital Bangladesh’ vision of the honorable Prime Minister.
Ananta Group wants to take $8m to Ethiopia for setting up Apparel factory
In a growing list of Bangladeshi companies seeking to invest abroad, Ananta Apparels Limited, a concern of Ananta Group, has sought Bangladesh Bank’s approval to take $8 million to Ethiopia to set up an apparel factory in the African country. Ananta Apparels recently submitted its proposal with the central bank claiming that it initiated the move to set up the garment factory in Ethiopia to enjoy tax benefits there along with duty-free access to the United States of America. It said that it would investment $8 million in Ethiopia from its own fund and if any additional fund was required it would be taken from other multinational financial institutions like International Finance Corporation. Bangladesh Bank, however, has expressed its doubts that establishing apparel industry in Ethiopia would be viable. As per the central bank officials, that they already forwarded the proposal of Ananta to the finance ministry as the government preserved the rights to give permission to such investment proposal.
Chemical import posts double-digit growth
The combined import of chemicals has been on the rise for the last couple of years, with the annual average import posting a double-digit growth. During the past fiscal year, 2017-18 (FY18), the import of chemicals crossed a record $2.0 billion level, according to the central bank statistics. The data showed import of chemicals stood at $1.26 billion during the first half of the current fiscal year (FY19), registering 10.66 per cent growth over the same period last year. Chemicals are considered intermediate goods as these are used in different industries as inputs for the production of other goods including final products. According to Bangladesh customs classification, the chapter-28 includes inorganic chemicals; organic or inorganic compounds of precious metals, of rare earth metals, of radioactive elements or isotopes.
Mr. Quamrul becomes new MD of Mercantile Bank
Mercantile Bank Limited has appointed Md. Quamrul Islam Chowdhury as the new Managing Director & Chief Executive Officer of the bank. Earlier he was the Additional Managing Director & Chief Business Officer of the Bank. Mr Chowdhury, a career banker has vast experience in three leading commercial banks in Bangladesh.
FID mulls introduction of incentives for good borrowers
Financial Institutions Division is going to propose a set of incentives for the good borrowers as a part of the government’s plans to check the high growth of bad loans. As per the FID officials, as part of the move, first good borrowers would be identified at the national level and then they would be facilitated with loans at reduced interest rate as well as privileged cards to help them getting new loans quickly. Besides, the good borrowers are likely to be given priority in getting travel tickets, accommodation in hotels and access to state-sponsored events. Banking experts welcomed the move but they were skeptical about its success in containing the willful defaulters who were getting political backing. According to the FID officials, a technical committee headed by joint secretary Rizwanul Huda of FID was working on the incentives that would encourage the borrowers to service their debt regularly.
Local, JV Companies may get BSEC waiver like foreign Companies
Prime Minister’s Office has asked Bangladesh Securities Exchange Commission to exempt both local and local-foreign joint venture private limited companies, like foreign ones, from taking permission from the commission for raising their paid up capital up to Tk 100 crore. The commission has also been asked to inform the PMO after making an amendment to its relevant regulations although BSEC was reluctant to grant such benefits apprehending misuse. The decisions came at the 12th meeting of the Private Sector Development Policy Co-ordination Committee (PSDPCC) held at PMO on February 2 with Prime Minister’s Principal Secretary Md Nojibur Rahman in the chair. Earlier on November 28, 2018 BSEC exempted fully foreign owned companies from taking the permission from the commission for hiking paid-up capital up to Tk 100 crore subject to submission of the encashment certificate of such capital and payment of applicable fees to the commission.
Apparel tech expo in Dhaka, Chattogram
The first ever apparel tech expo is going to take place in Dhaka and Chattogram on February 26 and February 28 respectively to showcase the importance of using technology in data management. According to a press release, Coats Global Services, a software solution provider to apparel and footwear, will host the expo. Apparel Tech Up is a series of events aimed to initiate a discussion on the value of technology for the apparel and footwear manufacturing space. The Bangladesh event will highlight the importance of data analytics and how accurate data management can impact the apparel manufacturing.
Head of SME Banking of BRAC Bank receives the Most Innovative SME Bank Award
Head of SME Banking of BRAC Bank Syed Abdul Momen receiving the “Most Innovative SME Bank” award from Sunil Bhat, Director of UK-based media outfit International Finance, at the “International Finance Awards 2018” programme at a hotel in Bangkok, Thailand recently
BGB seizes 1,200 bottles of Phensidyl
Members of Border Guard Bangladesh (BGB) seized 1,200 bottles of Phensidyl from a frontier area under Paba Upazila of the district last night. On a tip-off, a team of the paramilitary forces conducted a sudden raid in the area last midnight. But, sensing presence of the BGB patrol team, the smugglers fled the scene leaving behind the huge contraband drugs.
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)||$ 57.26||↑0.30||↑0.53%|
|Crude Oil (Brent)|| $ 67.12|| ↑0.05||↑0.07%|
|Gold Spot|| $1,329.40||↑5.77||↑0.44%|
Major Currencies Exchange Rates Movement in Last Seven Days *
|USD 1||BDT 83.9886|
|GBP 1||BDT 109.6303|
|EUR 1||BDT 95.2011|
|INR 1||BDT 1.1806|
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.<