Dhaka, Bangladesh (BBN)– Bangladesh’s overall balance of payments (BoP) situation and the recent stock market debacle may feature prominently in the first review meeting on sovereign credit rating, to be held next month.
“Repetitive of Moody’s will review the country’s sovereign credit rating from March 14 to March 16 this year,” a senior official of the Bangladesh Bank (BB) said, adding that Standard & Poor’s (S&P’s) will later review the sovereign credit rating in the middle of April this year.
Moody’s Investors Service, a US-based credit rating agency announced for the first time its sovereign credit rating for Bangladesh as Ba3 on April 12 last year, just after a week of Standard & Poor’s (S&P’s) sovereign credit rating as BB-.
During three-day review meeting, the Moody’s representatives will meet different stakeholders, policy-makers, trade body leaders, senior bankers and journalists to know the country’s latest socio-economical conditions.
Sovereign credit rating is a strong tool for positioning Bangladesh in the global financial arena by providing relevant information and related indicators about its overall economic situation, experts said.
“Despite short term challenges in the stock market, the economy’s long-term economic fundamentals are still believed to be stable and strong,” an expert noted.
The top global rating agency’s review will start against the backdrop of a volatile situation in the country’s stock market that has lost substantially, in terms of market capitalization of all listed issues, leading to a sharp drop in its index, in past three months.
The benchmark index of Dhaka Stock Exchange (DSE), the country’s prime bourse, generally known as DGEN, came down to 6018 point on February 23 from its highest 8918.51 point on December 05 last, the DSE data showed.
Besides, the country’s overall balance of payments (BoP) has entered into a negative territory, mainly due to a widening trade gap, lower growth of inward remittances and a deficit balance in the financial account.
The overall BoP registered a deficit of US$686 million during July-December period of the current fiscal due to deficit of $978 million in financial account, a BB official said, adding that the BoP was at a surplus of $2.091 billion one year back.
The pressure on the external sector may continue in the near future, because of a still widening trade gap and the slowed-down rate of remittance inflows, the experts added.
The central bank officials said they are not worried about the negative position of the BoP as the country has ‘a satisfactory level of foreign exchange reserve’.
“The country’s foreign exchange currency reserve crossed $11 billion Wednesday from $10.99 billion of the previous day,” another BB official confirmed.
BBN/SSR/AD-24Feb11-1:48 pm (BST)
