The central bank has initiated a step to identify the clandestine income and expenditure related to export and import trade aiming to have a correct picture of the balance of payments (BoP) situation of the country.

The Bangladesh Bank (BB) took the step following suggestions in this regard made by International Monetary Fund (IMF), which said the country's BoP is not being measured correctly.

According to an observation of the IMF, the country's import expenditure is not measured correctly as the letters of credit (LCs) don't mention the freight charges of imports.

"If the freight charges and other hidden charges are correctly mentioned in the LC documents, the BoP of the country will come under further strain," the IMF observation said.

The country's BoP deficit reached US$ 516 million in the July-February period of the current fiscal 2011-12, which IMF and the central bank have predicted to be increasing further if the actual import costs are mentioned.

The BoP deficit was $813 million in the July-January period of the current fiscal, while the deficit was only $222 million during the same period in 2010-11 fiscal.

But the BoP is set to be in a positive direction soon after the IMF approved a three-year $987 million loan for Bangladesh, with $141 million of the loan set to be disbursed immediately.

Besides, the central bank has started collecting monthly statements of export and import costs and of income from authorised dealer-banks to get the actual BoP picture.

The BB has started conducting a survey of the banks concerned, customs offices and ports to measure the freight costs.

The central bank also formed a committee headed by Abdus Sattar Mian, general manager, Statistics Department of BB, to coordinate the survey.

Sources said the country had spent about US$ 5.0 billion as its annual freight charges on sea and air routes for the country's foreign trade worth $48 billion last fiscal.

The country's BoP has come under stress, due mainly to the low volume of foreign aid along with high growth in imports.

The IMF recently projected that the current account balance might witness a deficit of $849 million in the current fiscal year, while it was $995 million surplus last year.

The BB too in an observation it had made on BoP earlier to send it to the government said, if the expected progress in receiving foreign direct investment and mid- and long-term foreign assistance was not achieved, financial account of BoP would come under further pressure in the current fiscal.

A high official at the finance ministry said the situation had cropped up as desired progress in utilising foreign assistance could not be achieved.

According to Economic Relations Division (ERD), foreign aid has declined by 28 per cent to $246 million in the first three months of the current fiscal year. The amount was $315 million in the same period last year.

The row with the World Bank centring the Padma Bridge has also created an uncertainty in getting foreign aid.

Financial Express/Bangladesh/ 15th April 2012