Important Business News Extracts – January 04 2017
Country moves to import cash dollar
The central bank of Bangladesh moves to import cash US dollar through a commercial bank to feed a growing demand for the greenback on the market. Officials said the disclosure was made at a meeting of bankers, held in the central bank headquarters in the capital Tuesday with Bangladesh Bank (BB) Governor Fazle Kabir in the chair. BB is now working for importing the cash US dollar after the waving of all kinds of taxes on such import. Central bank had already sent a letter to the National Board of Revenue (NBR) seeking tax waver on the planned dollar import. The central bank has already started preparation to import dollars worth 4.0 million through a foreign commercial bank to meet the demand for the cash greenback on the market. The central bank has made the move against the backdrop of short supply of the cash US currency on the local forex market in the recent months. Most of the banks are charging maximum Tk 84 for one cash dollar. The rate is higher by Tk 1.50 on the open market. However, the US dollar quoted Tk 78.70 on the inter-bank foreign- exchange market Tuesday, unchanged from the level of previous working day.
Inflation has come down to five per cent, the lowest in the past four year. The Bangladesh government through ‘various measures’ has been able to contain inflation and it would go below target at the end of the financial year. The inflation rate at the end of December last year was at 5.03 per cent on a point-to-point basis.
Bangladesh’s foreign exchange reserves hit a record $32.09 billion at the end of December, the central bank said on Tuesday, up $720 million from the previous month. The reserves were sufficient to cover about nine months’ worth of imports, and are $4.6 billion higher than a year ago. Steady garment exports and remittances from Bangladeshis working overseas, the key drivers of the country’s more than $200 billion economy, have helped build reserves in recent years.
Stocks witnessed downward trend in early hours on Tuesday, the third trading session of the New Year, as some risk-averse investors booked profit on sector specific stocks. DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), reached 5150 points, jumping 31 points within 10 minutes of trading, but could not sustain as the session progressed and gradually entered in red territory. After 30 minutes of trading, DSEX went down by 13.52 points or 0.26 per cent to stand at 5,106.06 points, when the report was filed at 11:00am. The two other indices saw negative trend till then. The DS30 index, comprising blue chips fell 1.22 points or 0.06 per cent to stand at 1,840.38 points. The DSE Shariah Index (DSES) lost 2.65 points or 0.22 per cent to reach at 1,207.03 points. Turnover, the crucial indicator of the market, stands at Tk 3.06 billion on the DSE, when the report was filed at 11:00am, riding on DESCO. Of the issues traded till then, 83 advanced, 187 declined and 27 issues remained unchanged till 11:00am. DESCO dominated the turnover chart with shares worth Tk 694 million changing hands till then, followed by Beximco Tk 188 million, Bangladesh Building Systems Tk 91 million, United Power Tk 69 million and AFC Agro Biotech Tk 54 million.
Bangladesh Bank has once again urged commercial banks to reward their first-rate buyers with rebates on interest payment and various charges in an effort to foster a good credit culture. BB has been offering various types of rebates to good borrowers over the last several years. The rebate for 2016 will be paid by March this year. In response, the BB called for more discussions to explore the scope for increasing the benefits further. The Bankers’ Committee, comprising chief executives of all commercial banks, meets periodically to discuss various problems. At the meeting, the central bank presents the government’s priorities and the current picture of the economy. Economic growth crossed the 7 percent mark last fiscal year and will most definitely be better in fiscal 2016-17. Inflation is low and the reserve level is satisfactory. But remittance inflow in 2016 was about $2 billion less than in 2015, and is on a declining trend. Subsequently, the BB governor told bankers to take initiatives to boost the inflow through the legal channel.
The ministries and divisions were directed to submit their respective estimations by this week as the finance ministry started its preparation to estimate the revised budget for the 2016-17 fiscal year. In the directives, the Finance Division asked the ministries and divisions to limit the number of projects in their revised annual development programme (ADP) and axed the less important projects if necessary. “There’s no scope of including any project that is absent in the main part of the allocation. The ministries and divisions were also advised to give importance to the sectors related to poverty eradication, human resource development, cyclone and post-flood rehabilitation and foreign aided projects. “The projects that have no allocation must not be placed in the revised ADP.” Finance Minister on June 2 unveiled Tk 3.406 trillion national budget for 2016-2017 fiscal year setting the GDP growth target at 7.2 per cent and 17.4 per cent of the gross domestic product. Of the total budgetary outlay, Tk 1.107 trillion was set aside for development expenditure and Tk 2.299 trillion for non-development expenditure. The budget set an Annual Development Programme with the original outlay of Tk 1.107 trillion, an amount which is up by Tk 168.06 billion or 18 per cent compared to last fiscal year’s revised budget of Tk 938.94 billion. According to the budget documents, the ADP outlay stands at Tk 1.233 trillion in the coming fiscal year with an amount of Tk 126.458 billion coming from the earnings of the corporations and autonomous organisations. Meanwhile, ministries and divisions could utilise 19.13 per cent of the ADP during the July-November period of the current fiscal year with an overall expenditure of Tk 235.94 billion, according to the Implementation, Monitoring and Evaluation Division (IMED). The ADP implementation rate was only 17 percent during the July-November period of the last fiscal year when the expenditure was Tk 170.11 billion.
Foreign aid disbursement to Bangladesh dropped 10 per cent to US$903.18 million in July-November period of the current fiscal year, officials said, though commitment hit a new high. An unwarranted setback in the execution of Japanese-aided projects following the deadly militant attack on a café in Gulshan diplomatic zone that left 18 foreigners, including seven Japanese nationals, among a total of 28 people dead. In the same period last financial year (FY), 2015-16, the foreign development partners had disbursed $1.0 billion in concessional loans and grants for bankrolling the country’s development recipe. The commitment of foreign assistance was, however, jumped to US$13.42 billion in the first five months of the current FY2017 from $972.25 million in the same period last FY. According to ERD calculations, the government received of total of $903.18 million in loans and grants in the July-November period. Out of the money, $806.66 million was received as loans while $96.52 million as grants from different bilateral and multilateral development partners. Besides, the donors confirmed $13.42 billion worth of assistance in the first five months of the current FY, $12.78 billion as loans while the rest $63.78 million as grants. Meanwhile, the ERD data showed Monday, the government repaid $406 million in interest and principal for its total debt during the period under review. Out of the repayment amount, $318.66 million was principal while $87.82 million interest. In the same period last FY, some $435.53 million worth of interest and principal of the outstanding loans was paid out, the statistics show. The government received a total of $3.45 billion in foreign assistance (concessional loans and grants) in the last FY.
Abdul Monem Economic Zone or AMEZ, an entity of Abdul Monem Ltd, received the final licence from the authority yesterday. With the licence, AMEZ will now allocate industrial plots to investors who want to set up factories in the economic zone. AMEZ is the second economic zone in the private sector that obtained the final nod from Bangladesh Economic Zones Authority or Beza. Paban Chowdhury, executive chairman of Beza, handed over the licence to ASM Mainuddin Monem, managing director of AMEZ, at a function in Dhaka. Many local entrepreneurs as well as foreign investors from countries like China, Japan and Hong Kong have expressed their intention to invest in the economic zone, he said, adding that the economic zones will help the government achieve its Vision 2041. AMEZ will create job opportunities for around 1 lakh people. AMEZ completed the environmental impact assessment and feasibility study and prepared a master plan on the economic zone as per the conditions of a prequalification licence, which it received in March 2015. The zone is situated on 216 acres of land at Gazaria in Munshiganj, very close to the Dhaka-Chittagong highway and Meghna Ghat river port. However, the final licence was for 142 acres, and another licence will be awarded later for the rest of the land.
A Tk 159cr project to make Bangla computing-friendly
The government is set to develop software to make Bangla friendlier for computing purposes. The Tk 159.02 crore project, which will be funded with the government’s own resources, will help create 16 software tools and organise training and workshops to build a strong workforce. The software will translate all voice and text contents from English to Bangla and vice versa and convert text to voice for the visually-impaired people. BCC will implement the project by June 2019. However, it will take five to six year to get well-equipped Bangla language computing tools. The project aims to standardise Bangla as an ICT-friendly language and develop tools, technology and content for Bangla computing, according to the planning ministry proposal. The software tools, which will incorporate all the Bangla dialects, will also allow the visually impaired to read and write in the language. The project received the approval from the Executive Committee of the National Economic Council yesterday.
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