Good morning. Here's what happened overnight and what you need to know today.
1.
BB to Hike Policy Rate: The Bangladesh Bank will increase the policy rate twice and interest rate once by October to tame double-digit inflation, central bank Governor Ahsan H Mansur said at a press briefing yesterday. Speaking to The Daily Star after the briefing, the governor hinted that the policy rate, at which commercial banks borrow from the central bank, is likely to be increased by 50 basis points to 9.50 percent this month. In the last week of August, the central bank hiked the policy rate by 50 basis points to 9 percent in a bid to rein in inflation, which has hovered above the 9 percent mark since March 2023. ( The Daily Star)
2.
Nine Banks face Liquidity Crisis: At least nine private banks are grappling with severe liquidity crises, with the combined deficit exceeding Tk18,000 crore, according to data from the Bangladesh Bank. Bangladesh Bank Executive Director and spokesperson Husne Ara Shikha said, "As the account balances are changing daily, it's difficult to provide bank-specific details. However, the combined deficit of these banks is around Tk18,000 crore." However, according to sources in the central bank, First Security Islami Bank tops the list with the largest deficit of Tk7,269.66 crore, followed by Social Islami Bank at Tk3,394 crore and National Bank at Tk2,342 crore. Other banks facing significant shortfalls include Union Bank's Tk2,209.15 crore, Islami Bank Bangladesh's Tk2,201.95 crore, Bangladesh Commerce Bank's Tk 380.95 crore, and Global Islami Bank's Tk 39.39 crore. (The Business Standard)
3.
Cash-Hungry Banks: Liquidity-starved five commercial banks have yet to get any positive response in feeding promised funds from interbank sources even after securing guarantee from the central bank, officials and bankers said. The cash-hungry five - National Bank, First Security Islami Bank, Global Islami Bank, Social Islami Bank and Union Bank - recently signed agreements with the Bangladesh Bank on obtaining its nod to playing guarantor for the banks in failure of repaying the credits borrowed from the banks having surplus liquidity. But the fact remains that none of the banks has received a single penny from the compliant commercial lenders which do not find lending to the problem banks sustainable for their banking despite the guarantee by the regulator. (The Financial Express)
4.
30% RMG Orders Shifted: The recurrence of protest causing shutdown of dozens of factories in the last two days took the apparel industry owners by surprise as they started feeling the pinch as 30% orders for the next season have already shifted to other countries. Just a week after apparel industrial zones in the suburbs of capital Dhaka returned to normal operation from two weeks of unrest, a section of workers in Ashulia and Gazipur stopped working and started protests from Sunday, demanding Tk25,000 as minimum wage. Repeated protests since 29 August put apparel exporters in a complex situation as they claim to be clueless why the unrest continued even though most of the workers' demands were already met or agreed upon. (The Business Standard)
5.
Tycoons' Tax Files Under Spotlight: If business magnets in Bangladesh play fair or cook the books crops up as a moot question as their tax files do not reflect the cache of wealth they posses at home and abroad. A recent finding by the tax sleuths reveals stunning facts on paid taxes, assets and income shown in the tax files of six top businessmen who are under scanner of law-enforcing agencies. The revenue-sector Central Intelligence Cell (CIC) launched investigations last month under government directives to identify discrepancies between the declared wealth of these individuals and their actual assets. (The Financial Express)
6.
Debt Burden: Bangladesh’s total public debt, comprising both foreign and domestic liabilities, reached Tk 18.5 lakh crore at the end of FY24, placing a significant financial burden on the population. Of this, $83,215.06 million, or Tk 9,98,580.72 crore, accounts for external debt, while domestic debt stands at Tk 8,51,219.32 crore, according to the latest figures released by Bangladesh Bank. When combined, the total public debt amounts to Tk 18,49,800.04 crore at the close of FY24. With Bangladesh Bureau of Statistics (BBS) data indicating a population of 172.92 million, the per capita debt stands at Tk 1,06,974.32. (The Business Post)
---Saju Sarker