Bangladesh Bank (BB) is set to announce its annual agricultural and rural credit policy and programme for the 2012-13 financial year (FY13) on July 24 with a disbursement target of taka 141.23 billion.

The target is around 10 per cent higher than the target and disbursement of taka 138 billion for the just concluded 2011-12 financial year (FY12).

BB Governor Dr Atiur Rahman will announce the policy at a press conference at the central bank headquarters in the city. The policy will follow the half-yearly monetary policy statement (MPS) for the FY 13, to be announced on July 18.

“All the banks have already been advised to increase their target for agriculture and rural credit by at least 10 per cent,” a BB official told BSS.

The Daily Sun/Bangladesh/ 13th July 2012

Bangladesh Krishi Bank (BKB) has geared up its rural and agriculture loans disbursement drive in order to boost agricultural production in the country.

To be self-reliant in food production, the bank disbursed Agri-loan of Tk 47.34 billion in the current year which is 103 percent against the annual target.

During the period, the bank recovered Tk 44.83 billion loans, 85 percent of the target and Tk 10.39 billion more than the amount realised during last fiscal.

The bank has reduced its loss to Tk 650 million through disbursement and recovery of said amount of loans during the calendar year.

The bank has already set its annual loan disburse-ment target for the fiscal 2012-13.

It is expected that the bank will be able to make profit in the current year and disburse and recover higher loans in the next year.

The Daily Sun/Bangladesh/ 13th July 2012

Growth in some developing Asian countries, including Bangladesh and India, will go down further due to a worsening the financial and banking crisis in Europe and a sluggish recovery in the United States, the Asian Development Bank said yesterday.

“Economic growth in developing Asia moderated during the first half of 2012 as slower growth in the US and the euro area reduced demand for the region's exports,” the lender said in a report.

Worries over the strength of important developing economies have emerged, according to the Asian Development Bank Outlook Supplement.

The supplement outlook did not say anything directly about Bangladesh. However, the outlook published in April projected Bangladesh's GDP (gross domestic product) growth at 6.2 percent for fiscal 2012, down from 6.7 percent a year ago.

Bangladesh Bureau of Statistics projected the growth at 6.3 percent in its provisional estimate.

However, Finance Minister AMA Muhith is still hopeful that growth would reach 7 percent in the final calculation.

The ADB predicts developing Asia will expand by 6.6 percent in 2012 and 7.1 percent in 2013, lower than 6.9 percent and 7.3 percent forecast in the lender's Asian Development Outlook published in April.

India's outlook, meanwhile, is clouded by a combination of high inflation and poor demand, both externally and internally.

India's economy is now expected to grow by 6.5 percent this year, down from the previous forecast at 7 percent.

South Asia's economy is expected to grow by 6.2 percent in 2012 and 6.9 percent in 2013. The earlier forecast said the growth would be 6.6 percent and 7.1 percent respectively.

South Asia's economic growth will moderate as the weaker global environment reduces exports and investment inflow. Although somewhat offset by stable inward remittance, widening trade deficits have led to the depreciation of most currencies in the sub-region.

The Daily Sun/Bangladesh/ 12th July 2012

The central bank will encourage credit growth in the private sector in an effort to raise economic growth to 7.2 percent, the highest ever target set by the government for the current fiscal year.

The Bangladesh Bank will put all its efforts to achieve the GDP growth target, defying gloomy forecasts made by multilateral lending agencies in the backdrop of a financial crisis in the Eurozone.

The central bank on July 18 will announce the new monetary policy for the current fiscal year where it will raise the target of private sector credit growth over the existing monetary policy target to achieve the goal.

The BB announces monetary policy twice a year -- in January and July.

In the current fiscal year, the private sector credit growth target is going to be set at more than 18 percent, up from 16 percent in the existing monetary policy announced in January.

An official of the central bank said, alongside the higher growth target, a restrained policy stance will also be pursued and credit to unproductive sectors will be discouraged to curb inflationary and external pressures.

BB Governor Atiur Rahman on Wednesday told The Daily Star that the monetary policy will have three main targets: achieving employment-led growth, bringing down inflation to 7.5 percent, and ensuring inclusive growth.

Another BB official said economists on several occasions complained that monetary policy does not work in Bangladesh. But most of the monetary policy targets were met in the last fiscal year, he added.

The official said they will achieve the goals this year too.

The Asian Development Bank in its "supplementary outlook" released yesterday said a debt crisis in the Eurozone and a slow recovery in the US will cast a shadow on growth outlook in some South Asia countries including Bangladesh.

However, the BB official said if the monetary policy and the fiscal policy can be coordinated properly, the growth target will be met.

Inflation also could be brought down within the target, he added.

From the beginning of fiscal 2011, inflation has been increasing every month, and non-food inflation crossed double digit for the first time.

However, due to the restrained monetary policy, non-food inflation could be brought down by 1 percentage point in the last fiscal year, he said.

The BB official said they will ask the government to cut the target of government borrowing from the banking sector in the current fiscal year to increase credit flow in the private sector.

He said the government borrowed Tk 8,000 crore less than the target of borrowing from the banking system in the revised budget of the last fiscal year.

The official also said, besides inflation, the pressure on exchange rate has eased much because of the government steps taken under the monetary policy.

The balance of payments had been in deficit for several months before turning surplus by $11 million during July-May last fiscal year, compared to the same period a year ago.

Apart from this, the exchange rate, which had been increasing gradually in the recent times, has started to fall.

The central bank official said they are now buying foreign currency from the market to prevent much appreciation of the taka against the dollar.

The Daily Star/Bangladesh/ 13th July 2012

Hafiz Ahmed Mazumder, MP, chairman of board of directors of Pubali Bank Ltd, and directors have decided at its 886th meeting to invest further Tk 500 crore in the capital market on Wednesday, says a press release.

The Bank is still equally interested to continue to play its strong role amid present situation of the capital market and by complying all rules and regulations of Securities and Exchange Commission (SEC) and Bangladesh bank.

The Daily Independent/Bangladesh/ 12th July 2012