BB seeks Tk 25.60b as export subsidy
The Bangladesh Bank (BB) has sought a sum of Tk 25.60 billion from the government to meet the demand for cash incentive/subsidy made by local exporters, officials have said. The central bank recently sent a letter to the Ministry of Finance (MoF), seeking the release of the third tranche of cash incentive/subsidy, they added. A high official of MoF said: “We have received a request from the central bank to release the third tranche of cash incentive/subsidy. We are now working on the matter. But it is not possible to say right now how much money will be released as cash incentive/subsidy,” he said. “Some Tk 25.60 billion is needed immediately to meet outstanding cash incentive/subsidy. Of the amount, some Tk 1.30 billion will be needed for the jute sector while Tk 24.30 billion for other sectors,” a central banker said.
Growing consumer class claims substantial loans
Consumer-credit flow grows stronger, indicating rise of the consumer class in Bangladesh, outweighing central bank’s diligent drive to divert loans to productive sectors. Increasing numbers of people are now using consumer-financing schemes launched by the commercial banks to whet their appetite for cars, motorbikes, air-conditioners, refrigerators and televisions, according to officials. The financing for consumption recipes surged by more than 35 per cent or Tk 101.65 billion during first nine months of the last calendar year following comparatively lower interest rates offered by the banks to attract more clients. They termed the trend “overexposed” for the country’s banking sector that happened at a time when Bangladesh needs increasing investment in productive sectors for achieving “inclusive” economic growth through creating employment across the country. Scheduled banks all together lent Tk 386.66 billion, which accounts for 5.14 per cent of the total outstanding loans, for consumer goods during the period under review against Tk 285.01 billion of 2016, according to a Bangladesh Bank (BB) confidential report.
BB asks for banks’ recovery targets on top 20 defaulters
The central bank has asked commercial banks to set targets of loan recovery from top 20 defaulters for 2018 upon the approval by their respective board of directors. The Bangladesh Bank (BB) has also given the banks a 10-day timeframe for submitting their loan recovery targets to its concerned department. The banks have also been asked to submit the progress reports on the recovery of loans against the targets on a quarterly basis to the central bank 10 days after informing their boards.
Current account deficit hits a 15-year high
The country’s current account deficit reached a 15-year high in the first five months of the fiscal year on the back of higher import payments and moderate export growth. In the July-November period of 2017-18, the deficit stood at $4.43 billion, way higher than $683 million recorded in the same period a year ago, according to data from the central bank. The deficit is the highest since 2002-03, as data related to the current account before the year was not available from the central bank’s documents and website. The current account recorded a surplus of $176 million in 2002-03 and the previous highest deficit was recorded in 2010-11 when it stood at $1.68 billion.
Look into capital flight via import
The Centre for Policy Dialogue yesterday advised the government to investigate whether capital flight has taken place by way of sugar, edible oil and cotton imports. “There is no resemblance between export and import growth of garment and cotton,” said Mustafizur Rahman, distinguished fellow of the CPD, while unveiling the private think-tank’s latest study at an event held at the capital’s Cirdap auditorium. In the first four months of the fiscal year, the apparel export growth was recorded at 7 percent while the import growth of cotton was recorded at 75 percent, he said. “Despite global price stability of raw cotton and an upturn in the growth of garment exports, the high growth of over 75 percent in import payments for this item appears to be suspicious,” the CPD said in its State of the Bangladesh Economy in FY2017-18. There has not been any fall in yarn and fabrics import, neither has there been a sudden spurt in investment in spinning. Given the fall in prices of raw cotton, the high imports would allude to very high volumes, which reinforces the need for investigation into the matter, the CPD said.
Probashi Kallyan Bank (PKB) seeks to weigh up a provision of bank act
The authorities concerned are seeking to weigh up a certain provision of Probashi Kallyan Bank (PKB) Act-2010 for converting the bank into a commercial one instead of amending the law. To this effect, PKB in a letter has already sought necessary steps from Financial Institutions Division (FID) under the Ministry of Finance, officials said. They said if the law is amended, it will take time to turn the bank into a commercial one as it is a lengthy procedure. That is why they have requested the authorities concerned to consider section 4(5) of the act to help run the bank within a shortest possible time. As per section 4(5) of the law, the government can give permission to convert a bank into a scheduled bank by issuing gazette notification, according to them. With both the amendment to some sections of the law or provision 4(5), the specialised bank can be transformed into a scheduled bank, said a senior official.
‘Conservative economic management needed in 2018’
A leading economic think tank has called on the government to maintain conservative economic management in 2018, its last year in office before national polls, to maintain a minimum economic growth. Speakers at the release of a report – State of the Bangladesh Economy in FY2017-18 (First Reading) – organized by Centre for Policy Dialogue (CPD), warned that a traditional pre-election government spending spree would further endanger an already risky economic scenario.
US wants to invest here in energy, consumer goods
The United States wants to expand its trade ties with Bangladesh, focusing on investment in oil, gas, energy and consumers goods as the market has massive potential, says a US official. “US companies come to me and want to know about Bangladesh. The top line is, there is huge opportunity as it is the eightieth largest country with 160 million people, which has registered 6%to 7% GDP growth in last couple of years,” a US embassy official told the Dhaka Tribune. Bangladesh government has made lot off efforts to increase the infrastructure, power generation, road transport and other, said the official, who deals in bilateral trade and economic matters. From the perspective of US companies, Bangladesh is a market of huge potentials. “The focus is on oil, gas, greenery and consumer goods. But it’s not easy. You need to have patience when you look at Bangladesh,” he added. Taking on the barriers of doing business in Bangladesh, the official said there are several concerns, including lengthy business registration, regulations and infrastructure that the US companies face here. “US companies have a lot of experience. Right now, the biggest sector is oil, gas and energy. It is very important for US companies as the Bangladesh economy is doing better,” the official said.
China to invest $5.0b in BD economic zone
A Chinese company has moved fast to invest US$ 5.0 billion in a special economic zone of Bangladesh for establishing industries that include a massive 2640-megawatt power plant. Officials said Bangladesh Economic Zones Authority (BEZA) has received the major investment proposal from Zhejiang Jindun Pressure Vessel Co. Ltd. The firm has sought 1000 acres of land in Mirersarai economic zone, off Chittagong port, for setting up the industries. It has already paid a part of the fund, equivalent to one-per cent of the total investment proposal, to the BEZA as per its requirement. Talking to the FE, Executive Chairman (secretary) of the BEZA Paban Chowdhury said it is the largest single investment proposal in the history of Bangladesh.
Bangladesh mulls retaining China DFQF access, not APTA scheme
Bangladesh might opt for duty-free and quota-free market access in China rather than trade preferences under the Asia Pacific Trade agreement as the DFQF scheme offers more benefits for export to the East Asian country. Officials of the commerce ministry said the government might continue to avail the DFQF scheme following recommendations that came from the stakeholders particularly exporters.
Biman aims to lift its market share
State-run carrier Biman has taken initiatives including purchase of new aircraft and change in networking approach to raise its market share to 30 per cent from the present 20 per cent by 2027, a Biman official has said. Besides, the national flag carrier has planned to purchase five more new aircraft over the next nine years as part of its 10-year fleet expansion plan, which awaits approval from the fleet committee. “Two Dreamliner aircraft will be added to our fleet in August and November this year. Two more Dreamliners will come in 2019,” spokesperson of Biman Bangladesh Airlines Shakil Meraj told the FE recently.
Telcos’ investment shrinks but revenue rises
Investment by mobile operators hit a six-year low in fiscal 2016-17 after being on a descent for the past four years even though the sector’s revenue is growing every year. In fiscal 2016-17, the mobile operators’ investment declined 14.94 percent year-on-year to Tk 4,626 crore while their revenue grew 3.77 percent, according to a report of Bangladesh Telecommunication Regulatory Commission. Mobile operators blamed the regulatory uncertainties for the shrinking investment. “Doing business in Bangladesh is very challenging due to various issues and regulatory uncertainties,” said TIM Nurul Kabir, secretary general of the Association of Mobile Telecom Operators of Bangladesh.
4G auction: Application submission today
Today is the date for application submission for the 4G spectrum auction, but the mobile network operators (MNOs) are still bargaining for reducing price, reports BSS. As the business case is related here so some issues are required to be reconsidered, say the MNOs. Association of Mobile Telecom Operators of Bangladesh (AMTOB) Secretary General T I M Nurul Kabir said the MNOs were discussing some issues individually with the telecom regulator. “As business case is involved here that is why they (MNOs) are reviewing the guidelines and discussing some queries,” he added.
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)||$ 64.30||↑0.50||↑0.78%|
|Crude Oil (Brent)||$ 69.87||↑0.61||↑0.88%|
|Gold Spot||$ 1,337.63||↑15.19||↑1.15%|
Major Currencies Exchange Rates Movement in Last Seven Days *
|USD 1||BDT 82.88|
|GBP 1||BDT 113.77|
|EUR 1||BDT 101.13|
|INR 1||BDT 1.30|
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.