The Bangladesh Bank on Monday showed a rosy picture of the country’s economy during the last four years comparing with the period of 2002-2005 and in the process it did not mention anything about the biggest ever banking scam by Sonali Bank and Hallmark Group this year.

The central bank in a report circulated on the day said that the country’s economy was progressing well despite the global economic recession and the average GDP growth soared to 6.21 per cent in 2009-2012 compared with the 5.47 per cent growth in 2002-2005.

The BB report, however, avoided the economic data in the 2006-2009 period mainly to show comparison between the tenure of the government of the BNP-led alliance in 2002-2005 and the current tenure of Awami League-led alliance, said BB officials.

Bangladesh Bureau of Statistics data showed that the GDP growth rate had increased to 6.63 per cent in 2005-2006 before coming down to 6.19 per cent in 2006-2007. The GDP growth in 2010-2011 soared to 6.71 per cent but came down to 6.32 per cent in the last fiscal year.

The report showed that the average annual inward remittance grew to $11.29 billion in 2009-2012 from $3.20 billion in 2002-2005 while the foreign exchange reserve soared to $12.70 billion from $2.93 billion.

But, when the BB report compared the capital adequacy in the banking sector, it showed the adequacy increased to $56,201 crore in June 2012 from Tk 20,578 crore in June 2008. The data in 2002 was not mentioned in the report.

It also showed the classified loan in the banking sector came down to 7.17 per cent in June 2012 from 13.60 per cent in June 2005.

The BB report, however, did not mention the incidence of embezzlement of around Tk 4,000 crore by five companies including Sonali Bank this year.

The central bank has widely been criticised for its role and failure to stop the biggest ever banking scam in the country.
Besides, the report also avoided the central bank’s role in the biggest ever stock market crash in 2010-2012. 

The market bubbled in late 2010 because of huge purchase of shares by banks going beyond the legal limit.
The BB took no action against the banks.

The market crashed after the banks withdrew huge profits leaving thousands of small investors in losses.
Share investors in rowdy street demonstrations demanded resignation of the BB governor, Atiur Rahman, for the central bank’s role in the stock market bubble and burst.

The BB  report showed that the country’s average annual export earning soared to $19.75 billion in 2009-2012 from $7.08 billion in 2002-2005 while the average import payment increased to $28.94 billion from $10.56 billion.

It also showed an increase in agriculture loan, marginalised sharecroppers loan, opening of bank accounts for farmers and school students, expansion of bank branches and introduction of mobile banking.

It said that the global rating agencies Standard and Poor’s and Moody’s gave stable rating to the Bangladesh economy in 2010-2012.

Bankers and exporters said that further depreciation of the dollar which went as high as Tk 84.45 on January 29 would put a negative impact on the country’s export sector and the inward inflow of remittance.
BB data showed that the dollar had depreciated almost every day in December as it was quoted at Tk 79.90 to Tk 79.92 on Monday against Tk 81.26-Tk 81.37 on December 2.

The selling rate of the dollar by different banks in February soared to the range of Tk 84.50 to Tk 85.50 due to a high import payment and less-than-expected export, and lack of foreign loan disbursement.

A BB official said that the central bank had been trying to stop the depreciation of greenback in the last few months to earn uninterruptedly export earning and inward remittances, but its efforts apparently turned a failed case.

He said, ‘A number of scheduled banks are now keeping excess greenback as the opening and settlement of letters of credit significantly decreased in the last few months.’

For this reason, the BB purchased more than $2 billion from the local banks from July 1 to till December 24 of this financial year in bid to tackle the deprecation against the taka.’

He said banks were now reluctant to open fresh LCs after Hallmark Group-Sonali Bank scam which ultimately hit the foreign exchange transaction.

The BB bought $57 million on Thursday from the commercial banks at market rate to offset the increased supply of foreign exchange in the market, he said.

Following the US dollar purchase, the country’s forex reserve rose to a record $12.40 billion on December 18 from $12.20 billion on December 17. It rose to $12.65 billion on Monday.

The forex reserve will significantly increase further by the end of this month as the country already received $642 million as remittance between December 1 and December 14, he said.

Former Bangladesh Bank governor Salehuddin Ahmed told New Age on Monday that the country’s export earning and inward remittances might slow down in the coming days if the depreciation of the dollar against the taka continued.

He said, ‘The country’s forex reserve recently made a record but the import of capital machinery and industrial raw materials continued to decline in the first four months of the FY 2012-13. The declining import of such types of products is not a positive trend for the country’s macroeconomic situation.’

He said the gross domestic products would drop if the import of capital machinery and the industrial raw material decreased.

Exporters Association of Bangladesh president Abdus Salam Murshedy said they would face more competition to export their products due to the depreciation of dollar against taka.

He said that they had got a significant amount of export earning in the FY 2010-11 due a stable rate of the dollar against the local currency.

He demanded that the government should set the dollar rate comparing the greenback rates in the neighbouring countries and in the competitor countries.

He said, ‘The employment generation will face crisis if the export-orientated industries become depressed.’