BDT 41.5 billion losses from Bangladesh Bank forex reserve in FY15
Bangladesh Bank faced losses of BDT 41.5 billion in operating its foreign exchange reserve in last financial year as currencies of the countries where the central bank’s foreign exchange reserves were kept became weaker against the Bangladeshi currency taka. According to the latest BB data, the central bank counted BDT 36.6 billion in loss in managing its foreign exchange reserve due to the devaluation of major foreign currencies while it suffered losses of BDT 4.8 billion for gold price devaluation and BDT 74.8 million for silver price devaluation in the FY 2014-15. The central bank, however, had made a profit of BDT 17.3 billion in the FY 2013-14. It earned profit of BDT 13.1 billion due to foreign currency appreciation, BDT 4.1 billion for gold price rise and BDT 21.6 million for silver price increase, it said. A BB official told New Age on Sunday that the central bank invested more than 80.0% of its foreign exchange reserve in the US dollar and the rest in the euro and other major currencies. Profit or loss of the foreign exchange reserve is an undistributed fund so it has no impact on the overall central bank’s profit.
Government scraps 1,320MW JV power project with China Company
The government on Sunday decided to scrap a USD 1.5 billion power project as a Chinese company is unwilling to form a joint venture with the Bangladesh Power Development Board with equal shares. China Hudian Hong Kong Co Ltd wanted 51.0% shares in the joint venture with the PDB to construct, own and operate a 1,320MW coal-fired power plant at offshore island of Moheshkhali in Cox’s Bazar, said officials. But Bangladesh wanted at least a 50-50 share in the joint venture, they said. ‘We are going to scrap the project as the Chinese firm is unwilling to form the joint venture without the lion’s share,’ state minister for power, energy and mineral resources Nasrul Hamid told New Age. nThe decision has been taken following a directive of the finance minister AMA Muhith for increasing the stake of PDB in the joint venture from 49.0% to at least 50.0%. Muhith at a meeting of a five-member cabinet committee on Sunday said that the PDB had 50.0% stakes in the other joint ventures for large power projects. The committee headed by Muhith was formed to advise the Power Division for speedy implementation of the government’s large power projects.
Malaysian company to build 1320mw power plant at Maheshkhali
The government gave Sunday the go-ahead to a Malaysian company for setting up a coal-fired power plant with the generation capacity of 1320 megawatts on Maheshkhali Island. “They will now sign for contract with government on fifty-fifty basis,” Finance Minister AMA Muhith told journalists at his secretariat office after a meeting with a Malaysian group of entrepreneurs. “Not only Malaysia, another group from China is also negotiating for setting up another power plant also at Maheshkhali,” he said, adding that the island in the Bay of Bengal is becoming a power hub. The Chinese group, the minister said, also got a conditional green signal, but negotiation is going on. Investors from both Japan and China are eyeing power plants with 3000MW capacity at Maheshkhali with plans to utilise the potential of the Bay Island, he said and also pointed out Japan’s involvement with the port development. Earlier, the minister had a meeting with the newly appointed Indian High Commissioner in Bangladesh, Harsh Vardhan Shringla, discussing present state of relations and bilateral issues as the country at present enjoys good relations. Also, the country has large bilateral economic and development program with the neighbor.
Global buyers start sourcing high-end local denim products
Long known for cheap and basic garment production, Bangladesh is now drawing the attention of global buyers for high-end items, especially in denim segment. Global brands, though on a small scale, have started exploring the sourcing potentials of handloom denim fabrics dyed with natural indigo from Bangladesh. In recent years, a few companies, including Living Blue, have started cultivating natural indigo in Nilfamari and Rangpur and this indigo is mainly used in dying high-quality, handmade products for high-end and luxury markets. Hessnatur, one of the oldest sustainable fashion companies in Germany founded in 1976, is among the buyers that are currently working with a local company to produce hand-woven indigo denim fabric. Natural indigo is growing better in Bangladesh compared with other countries, Sven Bergmann of Hessnatur Corporate Communication told the FE recently. The company is working on an 18-month project with Living Blue and CHP (Classical Handmade Products BD) for sourcing high quality, hand-made denim jeans, he added.
New push for Robi’s merger with Airtel
The Malaysian High Commission in Dhaka is pursuing the telecom regulator on the proposed merger of Robi and Airtel, saying the move will further strengthen relations between the two countries’ business communities. “We truly believe your decision in favour of the merger would encourage potential Malaysian investors to further invest in Bangladesh and would certainly have a positive impact in attracting more foreign investment in the country,” reads the letter signed by Ahmad Fikri Zakian, second secretary of the high commission. The merger will allow Robi to lend a strong hand in realizing the vision of a Digital Bangladesh, according to the letter. Bangladesh Telecommunication Regulatory Commission received the letter in the first week of March, just before Malaysia halted the recruitment of new foreign workers, including 1.5 million Bangladeshis. On January 28, the parent companies of Robi and Airtel signed a merger deal that would make the combined entity the second largest operator in Bangladesh. They began merger talks in August last year and got the primary approval with some conditions from the regulator a month later. Without mentioning Grameenphone, the letter said the competition in the market is heavily in favour of the leading operator and it is difficult for Robi and Airtel to separately sustain the heavy investment considering their market share.
No slab-based tobacco taxation likely in next budget
The government may remove the existing price-slab-based tobacco taxation system in the upcoming budget for the fiscal year 2016-2017 and adopt a regular taxation method in a bid to generate more revenue from the sector and reduce health hazards, finance ministry officials said. They said finance minister AMA Muhith had recently made an instruction to National Board of Revenue chairman Md Nojibur Rahman to revise the existing tobacco taxation for the next budget. Officials of the NBR also said that the existing slab-based tax for tobacco products failed to generate potential amount of revenue from the sector as well as reduce tobacco consumption in the country. Health experts, anti-tobacco campaigners and policymakers have also been criticizing the government for following the existing taxation method for the tobacco items, they said. ‘There will be no slab-based tax system. The existing tobacco tax system has to be completely changed in the next year,’ Muhith wrote in a note to the NBR chairman. The revenue board should change its traditional concept on tobacco taxation, he said. ‘Start works from now on the issue,’ Muhith wrote on the note on a research paper on tobacco taxation in Bangladesh. He, however, did not clear what types of taxation should be adopted in the next budget.
Bangladesh gets South Asia’s first trade portal
The government launched Sunday Bangladesh Trade Portal (BTP) website to provide necessary information related to imports and exports. The new website, first of its kind in South Asia, is expected to ease foreign trade, while also helping businessmen get a one-stop point of information. Commerce Minister Tofail Ahmed launched the website at a city hotel. The Ministry of Commerce (MoC) developed the website, the address of which is www.bangladeshtradeportal.gov.bd. The portal is an important step for the government towards improving the predictability and transparency of the trade-related laws and processes. Terming the launching of the website a ‘milestone’ for the businesses, the commerce minister said, “The portal will facilitate businessmen to get information on import and export that will help accelerate the country’s economic growth”. It will also help comply with Article 1 of the trade facilitation of the World Trade Organization (WTO), he said. He said that the portal will improve in course of time as it continues to get updated to deliver better services to the users.
World Stock and Commodities
|Index Name||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)*||$38.38||(0.12)||(0.31%)|
|Crude Oil (Brent)*||$40.45||+0.06||+0.15%|
|Dow Jones Industrial Average||17,213.31||+218.18||+1.28%|
|USD 1||BDT 78.38*|
|GBP 1||BDT 112.73*|
|EUR 1||BDT 87.45*|
|INR 1||BDT 1.17*|
*Currencies and Commodities are taken from Bloomberg.