Rejaul Karim Byron

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In the face of a mounting pressure on the foreign currency reserve, the Bangladesh Bank yesterday directed all commercial banks to quickly bring back their export proceeds.

BB Deputy Governor Ziaul Hasan Siddiqui along with other high officials sat with the chief executive officers of the commercial banks at the central bank yesterday.

The central bank at the meeting also directed the exchange houses of the commercial banks to refrain from any unhealthy competition so that the taka-dollar exchange rates do not go up abnormally.

Last month, the visiting International Monetary Fund mission also expressed concern over the falling balance of payments (BoP) and foreign exchange reserve of the country.

The IMF team also recommended the government take a good number of steps in this regard.

The government has also started feeling the pressure and sought fresh support of $1 billion from the IMF about which the finance minister presented the government's case in the World Bank (WB) and IMF annual meeting last month.

The foreign currency reserve was at $9.88 billion yesterday, down from $10.91 billion in June.

The reserve crossed the $10 billion mark in October 2009 and at one point it reached $11 billion last year.

However, the IMF said the foreign exchange reserve of Bangladesh may dip to $8.2 billion at the yearend due to the pressure on the BoP.

The pressure on the BoP also pushed up the taka-dollar exchange rate.

On September 27, the exchange rate was on an average Tk 75.18, up from Tk 74.23 in June last year. On September 27 last year, the exchange rate was Tk 69.86.

The high exchange rate is a concern for the central bank as the rising trend pushes up inflation further and directly hit the poor.

An official of the central bank said the BB is taking various steps to reduce the pressure on the BoP, and sat with the banks yesterday as part of the ongoing process.

The official said export proceeds usually reach the country within 120 days of export. The BB has advised the banks to bring in the export proceeds before the deadline so that the banks can make the import payment from their own income.

Outstanding export proceeds, except those from the export processing zones, reached $2.49 billion in August. However, the amount came down to $1.8 billion on September 30.

The central bank also observed that the exchange houses of some banks are quoting high rates for bringing in money from expatriates through their banks, which in many cases is heating up the market.

In a bid to ease the stress on imports, which will help reduce the pressure on the BoP, the BB also asked the banks not to go for any unnecessary import.

However, BB Governor Atiur Rahman told The Daily Star that the central bank has not put any stress on the banks.

The BB has advised the banks so that their role does not distort the market.

The central bank governor also said the BB has taken several steps to reduce the pressure on the BoP.

The pressure would ease significantly by the yearend, the governor added.

Atiur said rice import has come down and the prices of different commodities are falling on the international market. As a result, a good situation is expected in near future, he said.

On the declining foreign currency reserve, Atiur said: "It will sometimes increase and sometimes mark a fall."

He said, “The reserve is built up so that it can be utilised at the time of need and the issue has to be seen in that light.”

News: Daily Sun/ BAngladesh/ Oct-06-2011

NCC Bank Limited recently signed a Strategic Business Agreement with Social Islami Bank Limited for MoneyGram remittance service. Mohammed Nurul Amin, managing director and & CEO of NCC Bank and Muhammad Ali, managing director and CEO of Social Islami Bank signed the agreement on behalf of their respective banks at a function in the bank’s Head Office, said a press release.

News: Daily Sun/ BAngladesh/ Oct-06-2011

The government is likely to issue Tk 25.04 billion bonds for Agrani Bank to pay dues of cash crunch Bangladesh Petroleum Corporation (BPC) and arrange further credit for procuring fuel oil from the international market.

“Agrani Bank will arrange further credit to the country’s lone fuel oil importing corporation if the government issues bonds for the said amount,” said a senior official of the Agrani Bank.

Finance Minister AMA Muhith on September 10 this year directed the authority concerned to issue bond for mitigating the financial risk of Agrani Bank.

BPC in a letter to finance ministry sought minimum fund requirement of Tk 10.49 billion to overcome its liquidity shortage. The corporation at a meeting at the finance ministry last week was asked to inform the ministry about its fund requirement.

The corporation has also submitted a ‘Cash Flow Statement’ till June 30 this year on the basis of consensus among BPC and four state owned commercial banks. Meanwhile, the corporation has projected import of around 6.50 million tonnes of oil in the current fiscal year (FY 2011-12) at a cost of Tk 460 billion (US$ 6.21 billion), up by 53 per cent from the previous fiscal year's Taka 300 billion.

Total loss of BPC during last fiscal year (2010-11) stood at Tk 81.98 billion while the finance ministry disbursed Tk 57.91 billion as soft credit. The corporation’s total outstanding with the finance ministry amounted to Tk 24.07 billion during last fiscal year, according to the finance ministry.

After retuning from Washington, finance minister would hold a meeting at the finance ministry to discuss cash crises of BPC and state-owned commercial banks. The proposals of raising price of fuel oil and electricity would be discussed at the meeting.

BPC also sought loans directly from overseas lenders to meet its mounting oil import bill.

The HSBC, Citibank and Standard Chartered Bank would be the lead arrangers of loan, BPC chairman Md Muktabir Ali earlier told the press last week.

News: Daily Sun/ BAngladesh/ Oct-04-2011

BRAC Bank, country’s largest SME bank, has arranged five-day workshop for SME entrepreneurs from Saturday. The workshop aims at enriching basic financial knowledge of SME businessmen and helps them prepare balance sheet and other important financial statements, said a press release. Md Abul Kashem, deputy governor of Bangladesh Bank, formally inaugurated the workshop on October 01 at Joydebpur Branch of BRAC Bank in Gazipur.

News: Daily Sun/ BAngladesh/ Oct-04-2011

Md Nurun Newaz Salim, chairman of the bank, formally inaugurated the booths as chief guest and Mohammed Nurul Amin, managing director and CEO of the bank was present as special guest. Md Matiur Rahman, senior executive vice president, Md Omar Faruque Bhuiyan, executive vice president, Fakhrul Islam Chowdhury, senior vice president and senior officials of the bank were present on the occasion.

From these booths, customers of NCC Bank will enjoy 24-hour cash withdrawal, balance inquiry, utility bill payment, mini statement and pin change facilities through these booths without any cost.

News: Daily Sun/ BAngladesh/ Oct-04-2011