No change in plans for Bangladesh Bank over Brexit
The central bank has no plans to realign its reserve money invested in pound sterling even after the currency hit a 31-year low following Britain’s vote to leave the European Union, a top official said. “Our exposure to pound sterling is minor and we don’t see any risk there,” SK Sur Chowdhury, deputy governor of Bangladesh Bank, told The Daily Star yesterday. BB gives more weight to the US dollar, so keeps a lion’s share of its reserve money in greenbacks, he said. Presently, Bangladesh has around USD29.3 billion of foreign exchange reserve, which is equivalent to eight months’ import payment. Of the sum, only 4%, or USD1.2 billion, is in pound sterling. Pound recovered slightly against the US dollar upon reassuring statements from the Bank of England after a 10% plunge on Friday. So, the value of the BB’s exposure of USD1.2 billion with the sterling has now come down to USD1.07 billion in one day. In other words, Bangladesh’s investment in sterling lost nearly USD95 million or BDT 7.5 billion (USD1=BDT 78.4) in value overnight. Also in Dhaka, pound sterling lost its value by more than 7% on Thursday alone. Each British pound sold at BDT 115.34 at the inter-bank exchange level on Wednesday, which plummeted to BDT 107.26 the following day. Yet, BB is not concerned as it has only 4% of its investments in pound sterling.
Deal next month to build maiden LNG terminal
Petrobangla hopes to ink the final deals in July with foreign-firm Excelerate to construct Bangladesh’s maiden LNG terminal as the cabinet committee on government purchase has approved awarding the contract. Petrobangla chairman Istiaque Ahmad told the FE Saturday that the state-run petroleum corporation has already completed all necessary preparations for striking the deals, as the government attaches high priority to catering gas needs in various economic sectors. The cabinet committee approved Wednesday the awarding of contracts to Excelerate Energy Bangladesh Ltd for construction of LNG (liquefied natural gas) terminal at Moheshkhali island in the Bay of Bengal. The terminal would be a FSRU (floating, storage and re-gasification unit) where the whole infrastructure to re-gasify LNG would readied on a ship, he said. Petrobangla would ink three separate deals — Terminal Use Agreement (TUA), Implementation Agreement (IA) and Side Letter Agreement (SLA) — with the firm.
Brexit impact on trade: Dhaka to form committee to decide next course of action
Dhaka will form a committee to fix the next course of action in the wake Britain’s exit from the European Union.
Commerce minister Tofail Ahmed on Sunday stressed the need for forming the committee saying that the country might engage in renegotiations with Britain. A new situation has been created after Britain voted to break away from the EU in a historic referendum last week, he said. The commerce minister was talking to reporters after a meeting with officials of seven agencies of his ministry at the secretariat. He said the tariff commission chairman would lead the prospered committee as the country needs to keep its business interest unharmed. Like many other countries, economists and analysts here in Dhaka also expressed apprehension about probable negative impact of UK’s exit from the EU. Among those are losing duty benefits on Bangladesh’s exports to UK, decline in remittance inflow and volatility in the foreign exchange market.
Government not considering power tariffs cut, State Minister for Energy and Power tells Parliament
The government has no plans to reduce power tariffs as cost of production continued to be higher than rates at which it is sold, says State Minister for Energy and Power Nasrul Hamid. He told the Parliament on Sunday that that they have sought a BDT 50 billion budgetary support for power sector in the upcoming fiscal year, reports bdnews24.com. On Saturday, Bangladesh’s power plants set a new record by generating 8,942 MW (mega watt) of power. A fall in global oil prices have led to a drop in cost of power generation cost from BDT 6.3 per unit to BDT 5.6, Hamid informed the House. “But it’s still BDT 0.7 higher than the current tariff. So, there are no plans for an immediate rate revision.” Replying to an MP’s query, the minister said that the government has adopted a long-term plan to ensure constant power supply. He said it plans to generate 24,000 MW power generation by 2021, 40,000 MW by 2030 and 60,000 MW by 2041.
Savings tools sales hit fresh record at BDT 300.9 billion in July-May
The net investment in the national savings certificates and bonds hit a fresh record at BDT 300.9 billion in 11 months (July-May) of this fiscal year 2015-16 as clients invested heavily in the savings tools due to lower rates of interest on deposit products of the scheduled banks. The previous highest net investment in the saving tools was BDT 287.3 billion posted in the FY15. Economists and experts, however, gave different opinions on cutting the rates of interest on the savings tools by the government to curb the investment trend to get some respite from paying higher interest rates to clients. The net investment in national savings certificates and bonds also surpassed its revised annual target of BDT 280.0 billion in the 11 months of FY16. Clients continue to invest heavily in the NSCs due to low bank deposit rates and sluggish business situation in recent months, an official of Directorate of National Savings told New Age on Sunday.
Addl SD on mobile phone use to stay, says Finance minister
Finance minister AMA Muhith has ruled out any possibility of withdrawal of additional 2% supplementary duty on mobile phone use in the budget for the financial year 2016-17. The decision came in a meeting on Sunday at the parliament in the capital Dhaka where representatives of the telecom ministry, Bangladesh Telecommunication Regulatory Commission and the National Board of Revenue were present. Muhith, however, said that he would revisit the additional SD imposition on mobile phone use after three months, meeting sources told New Age. ‘He [Muhith] said nothing can be done at this moment about the SD. But the finance minister assured us of revisiting the SD after 3 months,’ a senior ministry official, who was present in the meeting, said. He said corporate tax on the mobile phone industry might be changed in the budget. The finance minister during his budget speech in the parliament on June 2 proposed an increase in the supplementary duty to 5% from the existing 3% on mobile phone use. The NBR issued the order in this regard on that day and the mobile phone companies started collecting the additional SD immediately before the budget was passed. The government introduced 3% SD on mobile phone use in the FY16 for the first time. Since then the mobile phone companies have been vocal against the SD on mobile phone use, both voice and data, arguing that it reduces the purchasing power of the mobile phone subscribers. According to industry estimate, the mobile phone users are now paying BDT 21 on different taxes for every BDT 100 recharge on their phones.
National telecom policy to be placed before cabinet today
The draft of the National Telecommunication Policy is likely to be tabled in the weekly cabinet meeting today for approval. Talking to the BSS, Posts and Telecommunications Division secretary Faizur Rahman Chowdhury on Sunday confirmed that they would place the final draft of NTP before the cabinet meeting for its nod. Prime minister Sheikh Hasina is scheduled to chair the weekly meeting of the cabinet. The draft of the NTP has been formulated considering the business cases of next 10 years for the country’s booming telecom sector with the slogan ‘Telephone for All’. The NTP’s mission is to ensure an integrated telecommunications network and services for all individuals, households and businesses in Bangladesh. Policy has been prepared based on five principles including open and competitive market, universal access, effective governance and forward looking. Aiming to ensure a telecom-friendly environment in Bangladesh, the NTP would give a clear direction for the section, as the government for the first time has included short-term, mid-term and long-term industry targets in the policy, said officials of Posts and Telecommunications Division. The short-term target has focused to bring a total of 1,200 union parishads into a network through optical fibre cable by 2018 while 100% telecom density would be ensured by 2021 under the mid-term target.
GP hits milestone in 3G rollout
Grameenphone yesterday launched its 10,000th 3G enabled base transceiver station (BTS) at Moheshkhali in Cox’s Bazar as part of its effort to upgrade network. The upgrade has helped the country’s biggest telecom network to bring in around 90% of the population under 3G coverage. State Minister for Telecom Tarana Halim launched the 3G site while Grameenphone CEO Rajeev Sethi announced the milestone in network upgrade, at a program at Pan Pacific Sonargaon Hotel in Dhaka. Grameenphone officials said this is the fastest rollout of 3G network in the region in terms of population coverage. Banglalink, the second largest operator, has around 6,000 3G BTSs while Robi has 4,300, Airtel 2,400 and Teletalk 1,500. Grameenphone said this expansion will not only connect people across the country with the fastest mobile data, but will also enable the government and other organizations to deliver digital services more effectively. The market leader has more than 12,000 BTSs and its next target is to cover the rest of the country within a short time, said Sethi.
Dhaka-Ctg oil pipeline in 3 years: The 240-km pipeline to enable cost-effective supply of fuel
The government would install a 240-km pipeline from Chittagong to Dhaka within three years for the supply of petroleum fuel at a cheap rate, State Minister for Power Nasrul Hamid told parliament yesterday. Replying to lawmakers’ queries, he expressed his hope that the project would be implemented within the time following a detailed feasibility study and other required processes. Earlier in 2015, the then energy and mineral resources secretary Abubakar Siddique had said the project — costing BDT 12.0 billion — would end by 2017. “We have taken the project to save BDT 1.3 billion annually and ensure fuel security,” he said. Imported fuel and crude oil would be supplied directly to the capital through the pipeline, sources said, adding that Bangladesh Petroleum Corporation would implement the project. The consultant for the project was being appointed, said the sources. Replying to another query, Nasrul told parliament that some 10 lakh metric tons of coal are extracted a year from the country’s lone coal mine in Barapukuria.
BSEC forms probe body on three companies
The securities regulator has formed a probe body to look into the ‘unusual’ transactions and price movements of the shares of three listed companies, officials said. In this regard, the Bangladesh Securities and Exchange Commission (BSEC) has issued an order to investigate the unusual transactions and price movements of the shares of Far Chemical Industries, Familytex (BD) and R.N. Spinning Mills. Mohammad Saifur Rahman, a BSEC executive director, said the inquiry committee comprising deputy director Mohammad Shamsur Rahman and two assistant directors–Mohammad Iqbal Hossain and Md. Boni Amin Khan–would submit its report within 30 working days.
World Stock and Commodities
|Index Name||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)*||$48.85||(0.52)||(1.05%)|
|Crude Oil (Brent)*||$48.26||(0.15)||(0.31%)|
|Dow Jones Industrial Average||17,400.75||(610.32)||(3.39%)|
|USD 1||BDT 78.4*|
|GBP 1||BDT 105.10*|
|EUR 1||BDT 86.48*|
|INR 1||BDT 1.16*|
*Currencies and Commodities are taken from Bloomberg.