Banks request Bangladesh Bank for forex brokerage houses
Scheduled banks on Sunday suggested that Bangladesh Bank should set up foreign exchange brokerage houses in the country so that they (banks) can sell and purchase foreign currencies at rational prices in accordance with market demand. The banks submitted the proposal at a special meeting with the Bangladesh Bank at the central bank headquarters in the capital. Bangladesh Bank executive director Ahmed Jamal presided over the meeting with the treasury heads of 21 banks which settle higher amount of foreign exchange than other banks. Meghna Bank managing director Nurul Amin after the meeting told reporters that the developed and neighboring countries had already set up a number of foreign exchange brokerage houses to control the exchange rates of their own currencies against foreign currencies. Bangladesh’s central bank has assured the banks that it would think about the proposal put forward by the scheduled banks, he said. The Bangladesh Bank organized the meeting as part of its recent initiatives to stabilize volatile money market.
The central bank has advised the banks to fix rationally the exchange rate of local currency against the US dollar, officials and bankers said Sunday. The instruction was given at a review meeting on the recent foreign exchange market volatility at Bangladesh Bank (BB) headquarters in the capital Sunday. The treasury heads of 21 banks, which were active in the exchange market last month, were present at the meeting, with BB executive director Ahmed Jamal in the chair.
Bangladesh Bank needs to devise long-term policies for the foreign exchange market to rein in exchange rate volatility, analysts said yesterday. They said different types of banks quote different prices for the dollar, which is one of the reasons behind the unusual fluctuation in the exchange rate in Bangladesh. The other factors include gap in inflow and outflow of the dollar, inefficiency in foreign exchange management and falling inflow of remittance. The analysts spoke at a roundtable on “Bangladesh’s Foreign Exchange Market: Present and Future” organised by Bangla daily the Prothom Alo at its office in Dhaka. Salehuddin Ahmed, a former governor of the BB, criticised the central bank for its move to cap the exchange rate last week.
Online database for the National Saving Certificates soon
The government is considering to make a database of investors in the National Savings Certificates (NSC) which will help analyse the nature of the clients in the government borrowing instruments. Currently, the departments of national savings do not know the category of the investors in the government borrowing tools. People familiar with the development at the finance division told the FE that the finance minister in a recent meeting instructed for a database of the investors. It is believed that this will help categorise and help the policymakers take the proper guidelines on the instruments.
Md Ismail Hossain Siraji was elected chairman of Jamuna Bank at the 306th meeting of its board on Thursday. A successful businessman in the leather and the textile sectors, Siraji is associated with a number of business and industries. He is a director of Reliance Tannery Ltd, Shahjahan Spinning Mills, and RTL Footwear Ltd, and proprietor of Assarunnesa Memorial Hospital, Haji Yunus Mia Diagnostic Center, Reliance Footwear and Shahjahan Dairy Farm. He is also a member of the Spain-Bangladesh Chamber of Commerce and Industry.
Efficient ports to boost exports by 7.0%: World Bank
Bangladesh can cut shipping costs by up to 9.0% and boost exports by 7.0% if its ports become as efficient as those in Sri Lanka, according to a new World Bank report. In a statement, Qimiao Fan, country director for World Bank Bangladesh, said as China is shifting out of labor-intensive sectors such as apparel, Bangladesh has the potential to capture a growing share of the global market. The ‘Competitiveness of South Asia’s Container Ports’ report, which was released on Thursday, said Bangladesh and its South Asian neighbors can make their container ports more efficient by boosting private sector participation, improving governance and encouraging competition to grab a bigger share of international trade and create more jobs. Noting that Bangladesh and South Asia have had impressive economic growth in the last two decades, the report shows that inefficiencies in the region’s ports threaten to hinder progress and stop it from matching other regions like East Asia. If ports in Bangladesh, India and Pakistan had been as efficient as those of Sri Lanka, it could have cut shipping costs by up to nearly 9.0%, boosting the value of the region’s exports by up to 7.0%, it said.
Budget FY 18: Muhith to place Tk 4tr budget on June 01
The finance minister AMA Muhith is likely to place the national budget in the Jatiyo Sangsad on June 01 (Thursday) for the next financial year beginning July 01, according to finance division. The size of the new budget for the 2017-2018 fiscal may be Tk 4.00 (400270 crore) trillion, around 18 per cent of the GDP. Of the size, Tk 2.47 trillion or over 11 per cent of the GDP will be spent as revenue expenditure while Tk 1.53 trillion will be allocated for the annual development programme (ADP). The ADP size is equivalent to nearly 7.0 per cent of the GDP.
GDP set to rise Tk 19.62tr, higher than expectations
The country’s Gross Domestic Product (GDP) at current prices is set to stand at Tk 19.62 trillion at the end of June 30, according to a revised official estimate. This is Tk 2.291 trillion higher than that of the last fiscal year (2015-16) as a result of speedy expansion of the economy. However, the government wanted Tk 19.610 trillion in its original budget placed for the current fiscal year 2016-17. The country’s real GDP has been around 7.0 per cent over the past few years. On the other hand the nominal which do not adjust inflation usually expand around 14 per cent on an average.
Businesses are likely to see cuts in corporate tax rate in the upcoming fiscal year, said Finance Minister AMA Muhith yesterday. “My proposal will be to rationalize the rate,” he said at a consultative meeting of the National Board of Revenue at the Bangabandhu International Conference Centre in Dhaka. The NBR and the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) jointly organized the meeting to discuss the business community’s proposals for the national budget for 2017-18. Muhith made the comments after FBCCI President Abdul Matlub Ahmad demanded a reduction in corporate tax rate to 22.5% from existing 25.0% for listed companies and 30.0% for manufacturing firms from 35.0% now. For banks, financial institutions and insurance companies the apex trade body demanded 2.5% points cut in the tax rate. It stands at 40% now.
New VAT law to be revised to protect local industries
Finance Minister AMA Muhith on Sunday said the government will consider revision of the new VAT law in order to protect and develop local industries. The minister made the statement at the 36th consultative meeting jointly organised by the NBR and the Federation of Bangladesh Chambers of Commerce and Industry at Bangabandhu International Conference Centre in Dhaka. Earlier, Muhith took a firm stand to implement 15.0% uniform VAT from July 1. At the consultative meeting, business stakeholders put forward various demands to be included in the upcoming budget. The finance minister hinted at the reduction of high corporate tax and talked about advance income tax, tax-free ICT sector, women income tax limit, consumer right and illegal money transfer.
Muhith wants debate on when to start a fiscal year
Finance Minister AMA Muhith has agreed to have an open debate on the start and end month of the country’s fiscal year. A fiscal year is the period used by governments for accounting and budget purposes, which vary between countries. It is also used for financial reporting by business and other organisations. “Whenever the topic of changing the fiscal year came, I defended it every time. But not this time,” Muhith told a pre-budget discussion organised by the Metropolitan Chamber of Commerce and Industry (MCCI) at its office on Saturday. Mohammed Farashuddin, former governor of Bangladesh Bank, raised the topic of the fiscal year that is currently from July to June.
Two foreign companies are set to get the city metro rail work despite their unsatisfactory performance in implementing two important infrastructure projects, sources said. The Dhaka Mass Rapid Transit Development (DMRTD) Project will sign agreements with the Sinohydro Corporation Limited and the Italian Thai Development Public Company on Wednesday on two component of the USD 2.7 billion metro rail project. Sources said the two companies jointly won the work on infrastructure development for the depot site at Uttara. The Italian Thai Development Public Company has also been found qualified for constructing the 10-kilometre elevated tract of the speedy railway from Uttara to Agargaon.
Earnings of power, cement, textile issues decline in Q1
Earnings of many listed companies especially in power, cement and textiles sectors declined during January to March, 2017 compared to same period of the previous year because of multiple reasons. The company owners and market experts said the companies’ profits declined during January to March as the sales and price of goods have not risen in tandem with the hike of production cost. According to information of Dhaka Stock Exchange (DSE), the EPS (earnings per share) of MI Cement, BEXIMCO, Padma Oil, Golden Harvest Agro Industries, Appollo Ispat Complex, Paramount Textile and Pacific Denims declined during January to March, 2016 compared to same period of previous year.
Robi and Ericsson jointly ran a trial of 4G and Long Term Evolution (LTE) technology in Dhaka and got high-speed broadband of 90 Mbps and above, said a press release yesterday. The trial was conducted to demonstrate mobile operator Robi’s readiness in introducing 4G services in the country. Ericsson, a Sweden-based company, and Robi are going to run similar trials in other cities of Bangladesh shortly, according to the statement. This is a milestone for Ericsson Bangladesh and a sign of the growing readiness of the country’s telecom market to adopt LTE technology. Bangladesh Telecommunication Regulatory Commission (BTRC) will award 4G licenses shortly; it has already finalized the proposed guideline for the service. In the draft guideline, BTRC has proposed BDT 150.0 million as the license fee for 15 years and another BDT 75 million as annual fees. All existing 3G operators will be eligible for 4G licenses. Robi and Ericsson’s trial was performed using the latest commercial end-user device and a combined carrier of the 1800 MHz and 2100 MHz bands. In addition to ensuring readiness for the launch of 4G services, the trials are being conducted to demonstrate how this technology can facilitate the end-users in experiencing broadband applications, such as high definition (HD) TV and video conferencing.
Inadequate access to spectrum has become a barrier to improving quality and expanding services across the country by the operators. The deteriorating service quality has forced many mobile phone users to lodge complaints for call drops, poor network coverage and unsuccessful calls in different parts of the country. Consumers are also suffering for the poor quality of data services, despite being under a 3G network. Operators raised the issue at different levels, including at recent meetings with the finance ministry, telecom division and Bangladesh Telecommunication Regulatory Commission (BTRC).
Major Currencies Exchange Rates Movement in Last Seven Days
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.
ABOUT DHAKA BANK
Dhaka Bank has truly cherished and brought into focus the heritage and history of Dhaka and Bangladesh from Mughal outpost to modern metropolis. Most of its presentation, publications, brand initiatives, delivery channels, calendars and financial manifestations bear Bank’s commitment to this attachment.