BB move fails to cool down dollar
The US dollar continues to appreciate against Bangladeshi currency taka despite the injection of a vast quantity of greenbacks into the market by the Bangladesh Bank as it endeavours to keep the exchange rate stable. Yesterday, the inter-bank exchange rate of the US dollar stood at Tk 81.10, up from Tk 81.05 on Sunday and Tk 78.50 a year earlier, according to the central bank. The BB has sold $126 million to banks in the first 13 days of November and in October it sold $160 million — the highest yet in 2017. The central bank has sold a total of $440 million to banks from July 1 to November 13. In contrast, it sold $175 million and purchased $1.93 billion during the course of fiscal 2016-17. “But it is not yielding the desired result as the demand for the US dollar continues to rise,” said a BB official. The taka has been depreciating against the US dollar since the middle of October mainly due to a mismatch between the demand and supply of the greenback, according to bankers and an economist. Remittance and exports, the two major sources of foreign currency for Bangladesh, are in the slow lane, while imports have ballooned, they said. The upward trend of the dollar is bad news for importers, who have to pay Tk 10 lakh extra for a bill of $1 million if the dollar rate goes up by even Tk 1. Bangladesh’s import bills have significantly increased in the first four months of the fiscal year and the existing trend indicates that the payments will balloon further in the months to come. In the first three months of the fiscal year, imports soared 28.38 percent year-on-year to $12.19 billion.
Bangladeshis can keep up to $5,000 without declaration
The central bank is now allowing Bangladeshi citizens to keep and carry foreign currency of up to $5,000 or equivalent. Bangladesh Bank issued a circular to this effect on Monday, saying necessary amendments had been made to the Foreign Money and Jewellery (FMJ) Form. All banks that deal in foreign currency received the circular. The amended FMJ Form says Bangladeshi citizens can keep up to $5,000 or equivalent amount of other foreign currency without any form of declaration and can carry such money during foreign travel. Resident Bangladeshis will have to exchange into taka any amount above this limit within 30 days of returning to the country, or save it in the requisite foreign currency. For non-resident Bangladeshis, there is no such requirement. The FMJ Form also says travellers, whether Bangladeshis or foreigners, can bring in or leave the country with any amount of foreign currency, and will have to declare it to the Customs authorities if it is above $5,000 in value. On October 16, Bangladesh Bank allowed travellers to take up to Tk10,000 in Bangladeshi currency while leaving the country, and the same amount for travellers coming in. According to central bank directives, an individual can get a maximum of $12,000 endorsed from banks per year.
BIFC on the verge of collapse
The non-bank financial institution Bangladesh Industrial Finance Company is on the verge of collapse after it failed to pay loans worth Tk 200 crore with 14 banks. This is the first time that a financial institution has become a defaulter. Subsequently, the management of BIFC has sought a bailout package from the Bangladesh Bank for its survival. “If the central bank does not provide the fund immediately, we will have to go for liquidation,” said the NBFI in a letter to the BB earlier in July. The NBFI has been barred from lending and taking deposits by the BB for several months now. BIFC’s troubles started when its former chairman Abdul Mannan took out loans worth Tk 703 crore through forgery, according to a central bank report. The falsification in paperwork by Mannan and his family members including his wife Umme Kulsum Mannan, who altogether hold 62 percent stakes in BIFC, was unearthed in 2015 by a BB investigation.
Bourses see investors’ increased participation
Net foreign investment on the premier bourse marked an increase, encouraged by positive macroeconomic indicators coupled with declining interest rate, stable exchange regime and a peaceful political situation during the quarter 1 of this fiscal year. Metropolitan Chamber of Commerce & Industry, Dhaka (MCCI) observed this in its review of economic situation in Bangladesh for July-September (Q1) The net foreign investments in stocks jumped 202% year-on-year in the first nine months of 2017 as overseas investors injected more funds into the Bangladesh stock market. Foreign investors bought shares worth BDT 51.01 billion and sold shares worth BDT 33.26 billion to take their net investment to BDT 17.75 billion for the January-September period of 2017, according to information of the Dhaka Stock Exchange (DSE). “Banks are the foreign investors’ preferred sector, but non-bank financial institutions, power and energy, pharmaceuticals, multinationals, telecoms and IT also drew their attention,” said the economic review of the MCCI. The board of directors also decided to build a 30,000 sft compliance factory for washing plant. Foreign investors include Morgan Stanley, JPMorgan, Goldman Sachs and BlackRock, among others, are the foreign portfolio investors. “Known as portfolio investment, total foreign investment accounted for nearly 1.0% of DSE’s total market capitalization that stood at BDT.4,083 billion at the close of trade on 3 October 2017,” the MCCI said. The current account also registered a deficit of USD 451 million in the first two months of this fiscal year.
Economy underperforms for some shortcomings
Bangladesh economy goes on underperforming for some limiting factors like infrastructure deficits, and gas and power problems, notwithstanding some progressive growth, says a premier trade body. The Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI) gave such findings in its Review of Economic Situation in Bangladesh for the first quarter (Q1) of the fiscal year (FY) 2017-18. “Bangladesh’s economy is progressing well, but below its true potential. Infrastructure deficits and gas-and power-supply problems are undermining the performance of all productive sectors of the economy,” the MCCI said in the economic review for the July-September (Q1) period. Keeping this in view, the MCCI suggested that the government should adopt adequate steps to overcome these bottlenecks, and achieve and maintain political stability for creating an investment-friendly climate, which is crucial to attaining higher economic growth. According to the MCCI, despite having some risk factors like marginal growth in remittances, slower growth in the export receipts, and a higher rate of inflation, the country experienced stable growth during the quarter under review. The chamber, however, said Bangladesh needs to significantly increase the rate of export growth, generate more investments, improve the overall infrastructure, in particular its roads, railways and port facilities, increase power and gas production, and remove all other infrastructure bottlenecks to help achieve a 7.40% GDP (gross domestic product) growth per annum in order to get to the goal of becoming a middle-income country by 2021.
NBR puts off launching for two months
National Board of Revenue has delayed the introduction of the online VAT returns submission by at least two months as it failed to complete the legal procedures required to launch the system within the deadline. The revenue board has yet to finalise the value-added tax rules and forms related to VAT payment for launching the system from November 1 as per schedule of the VAT Online Project. As per the changed plan, the online submission of VAT returns will be open for traders from January 1, 2018, an NBR high official told New Age on Monday. He said that hopefully the legal procedures including finalisation of rules would be completed within December. According to officials, the rules and forms are supposed to be finalised after consultation with stakeholders, particularly representatives of the Federation of Bangladesh Chambers of Commerce and Industry. NBR took the move to amend the existing VAT rules and forms for continuing the automated VAT system under the VAT Act-1991 after the government deferred the new VAT and Supplementary Duty Act-2012 until July, 2019. The new law with full automation of the country’s VAT system was scheduled to come into force from July this year.
Air travellers to come under NBR scanner
The National Board of Revenue (NBR) has taken initiative to implement Advance Passenger Information (API) and Passenger Name Record (PNR) to get information in advance on Bangladeshis flying in and out of country. A number of countries have this programme, under which the airlines have to provide information on their passengers to concerned authorities in advance. NBR has formed a nine-member team to implement the API and PNR. A NBR order issued on November 9 said revenue collection would be more transparent and dynamic once the API and PNR were implemented. Apart from that, the NBR said it believed the initiative would help maintain quality passenger services at the airport, combating local and international terrorism, control intrusion of unwanted passengers, prevent smuggling, reduce passenger harassment, and differentiate suspects from general passengers. Airlines Operation Committee (AOC) President Syed Ahmed Amin said the API and PNR systems were in place in a number of countries.
Walton gets nod for mobile assembly plant
Tech giant Walton has received a provisional licence from the telecom watchdog to assemble mobile phones in Bangladesh, hence becoming the first company to bag the approval for making handsets locally. Last month, Bangladesh Telecommunication Regulatory Commission (BTRC) visited the factory of Walton in Gazipur and handed over the interim licence to the company recently, said a senior official of the commission. The conglomerate has already started assembling different kinds of handsets in its hi-tech park and plans to market the products within a short time. Local ICT service provider Aamra Holdings Ltd, which owns and markets WE branded handsets, is in the process of getting the provisional licence. The company’s senior officials will give a presentation before the regulator on Thursday to outline its plan and preparation, said the official. Some other companies have also contacted the regulator and expressed their willingness to set up assembly plants but they have not applied officially, according to the official.
Uber launches bike sharing service in Dhaka today
Popular ride-hailing company Uber is set to roll out its bike sharing service UberMOTO in Dhaka today, presenting yet another transport option for the city-dwellers yearning for more convenient service in a city known for its notorious traffic congestion. The San Francisco-based global transportation technology company made the announcement on its official Facebook page. According to the post, riders using the two-wheeler service can travel 4 kilometres at less than Tk 60 in the capital. The popular ride-sharing venture also declared some distance-based prices. The fare for an 8km drive will be less than Tk 120 and for 20km it will cost less than Tk 300. The company however said nothing about base fare, waiting charges, or per kilometre fare. A spokesperson of Uber said there would be no waiting charges and further information will be made available after the service hits the road. According to the official, MOTO drivers will carry two helmets: one for themselves and one for riders. All riders and drivers must wear the helmet as per the law. To use the service, users will have to select MOTO app on their smartphones, enter pickup location and payment method, and request a ride. They will receive the drivers’ details: name, photo and details of the motorbike. Riders can pay by cash, credit or debit card and receive an electronic receipt via the app. UberMOTO is the second venture in Dhaka that is rolling out the motorcycle taxi-hailing service.
BTRC cuts spectrum conversion fee amid telcos’ pressure
Bangladesh Telecommunication Regulatory Commission has revised downward the fee for getting technology neutrality facility for each megahertz of spectrum in 900 and 1800 megahertz bands amid pressure from mobile phone operators. The telecom regulator on November 8 made the decision at a special meeting with its chairman Shahjahan Mahmood in the chair, a senior official of the commission told New Age on Monday. Under the technology neutrality facility, the operators are allowed to provide any of the 2G, 3G and 4G or long-term evolution services in any bands. The telecom regulator under its latest revision proposed the ministry that the conversion fee for each MHz of spectrum in the 900 and 1800 bands should be $4 million if entire spectrums in possession are converted, while the rate should be $7.5 million for partial conversion of spectrums in the two bands. The BTRC earlier proposed that the conversion fee for each MHz of spectrum should be $7.5 million and the conversion of entire holdings in the 900 and 1800 MHz bands at once should be made mandatory. BTRC officials said that the total allocation of spectrums in the two bands to the mobile operators was 82 MHz.
German company interested in constructing Bangabandhu Int’l Airport
AviAlliance, an aviation management firm based in Germany, has expressed its interest in forming a partnership with Bangladesh for the construction of Bangabandhu International Airport. The expressed the interest during a meeting chaired by Civil Aviation and Tourism Minister Rashed Khan Menon on Monday. Addressing the meeting, the minister said the government will build the airport to turn Bangladesh into an aviation hub for both the eastern and the western region of the world. He added that the airport will create 10,000 new employment opportunities which make a positive impact in Bangladesh’s economic and tourism sectors. Civil Aviation Secretary SM Golam Faruk, Civil Aviation Authority of Bangladesh Chairman Air Vice-Marshal M Naim Hasan, and Budapest Airport Project Director of AviAlliance Johann Martin were present in the meeting. AviAlliance is interested in a public-private partnership with the Bangladesh government to jointly fund, design, build, manage and maintain the international airport. The German aviation firm has shareholdings in the airports of Athens, Budapest, Düsseldorf, Hamburg and San Juan (Puerto Rico). In 2016, these airports together handled 80.2 million passengers, according to their company website.
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