Bangladesh Bank reserves fiasco might multiply economic impacts: Dhaka Chamber of Commerce and Industry
Dhaka Chamber of Commerce and Industry (DCCI) has expressed deep concern over the recent central bank’s foreign exchange reserves scam in Federal Reserve, USA, according to a statement issued yesterday. The country’s largest business body feared that the scam might bring multiplier economic impacts such as hitting the balance of payment, repayment of external borrowing, downgrade the credit rating of Bangladesh above all weakening the currency exchange rate with the decline of purchase power of BDT and macro-economic slowdown. It said the foreign exchange reserves are likely to fall, resulting in currency devaluation and spending hike in import trade leading to a wider negative balance of trade. The import-led export growth trend will continue to decline having the higher cost of doing business, it said, adding that on the other hand, the central bank led the range of dollar to denominate investment schemes including EDF (Export Development Fund) in local market and higher local private sector lending target of monetary policy may be hampered above all plunging remittance inflow. It said the overall credit rating of Bangladesh may face further slump sliding down the FDI inflow potential and business competitiveness to harness the incremental industry intensive and export growth trajectory envisioned in economic graduation of Bangladesh.
MF market continues to be dull, drab
The impact of regulatory decision regarding liquidation or conversion of closed-end mutual funds (MFs) into open-end ones is yet to be visible in the capital market. The units of the majority number of closed-end MFs are being traded well below their face values. Many Asset Management Companies (AMCs), however, are expecting a ‘positive’ impact of liquidation or conversion of closed-end MFs on the market. After delisting of four closed-end MFs, which will be liquidated or converted into open-end ones, there remain 40 closed-end MFs listed on the bourses. According to information of the Dhaka Stock Exchange (DSE), except eight closed-end MFs managed by the ICB, the units of 32 MFs presently are being traded below their face value of BDT 10 each. As per the directive of Bangladesh Securities and Exchange Commission (BSEC), the conversion of AIMS First Guaranteed MF and Grameen One, the first scheme of Grameen Mutual Fund One, managed by AIMS, is now under process.
‘Uncontrolled’ growth of insurance firms angers Muhith
Finance minister AMA Muhith Wednesday said the country’s insurance sector grew in an “uncontrolled manner” lacking high ethical standards, especially the life segment. “The insurance sector in the country grew in an uncontrolled manner as there had not been any re gulatory authority for long time, after the establishment of regulator, order is coming back gradually,” he said. His angry remarks came at the inaugural ceremony of a three-day insurance fair at Bangabandhu International Conference Center in the capital organized by the Insurance Development and Regulatory Authority (IDRA). The minister said there is general insurance is an untapped area, which constitutes only one-third of the total sector. M Shefaque Ahmed, chairman of IDRA, chaired the inaugural function, where State Minister for planning and finance Abdul Mannan, Banking Division Secretary Younusur Rahman, Bangladesh Insurance Association (BIA) Chairman Sheikh Kabir Hossain also spoke. The Insurance Fair 2016, first of its kind in the country, was organized with an aim to make people aware about insurance and promote insurance products.
Tax receipts rise as export, import get a boost
Tax collection rose 14% year-on-year to BDT 113.9 billion in February, on the back of increased exports and imports in recent months, according to provisional data of the National Board of Revenue. Overall, the tax authority collected BDT 913.6 billion in July-February this fiscal year, registering 14.4% growth over the same period a year ago. However, the amount fell BDT 128.1 billion short of the target at BDT 1,041.7 billion for the eight-month period. So far, collection stood at 51.0% of the total target of BDT 1,763.7 billion for fiscal 2015-16. It means the NBR will have to collect the
rest in four months, which some taxmen and analysts said would be a tough task. In February, revenue collection from external trade-related activities soared 25.0% to BDT 37.2 billion year-on-year. Overall receipts rose 18.0% to BDT 282.6 billion in July-February, thanks to a recovery in imports and exports from a downtrend in October-December. Imports grew 6.7% in July-January this fiscal year compared to the same period last year, while exports rose 9.0% in July-February. However, the growth in direct and indirect tax collection from domestic sources slowed, according to NBR data.