Good morning. Here's what happened overnight and what you need to know today.
1.
Banks Reel from Liquidity Crisis Despite Rising Deposit Rates: Despite rising interest rates on deposits and various efforts by the central bank, Bangladesh's banking sector continues to face a liquidity crisis that has hamstrung some lenders. The primary causes of the crisis include a high volume of non-performing loans (NPLs), slow deposit growth, slow loan recovery and a lack of confidence in the banking sector due to rampant scams, especially at Shariah-based lenders. (The Daily Star)
2.
Govt to Speed Up Development Spending to Revive Economy: The interim government is going to ask ministries to accelerate the implementation of ongoing development projects, Planning Adviser Prof Wahiduddin Mahmud said, as he believes this would help avert a further economic slowdown. Citing how the economy is facing turbulence such as political turmoil, labour unrest, expensive loans deterring new investments and stubbornly high inflation, the adviser yesterday said that it was time for policy adjustments. (The Daily Star)
3.
Cenbank to Extend Liquidity Support to 4 Troubled Banks but Won't Print Money: The Bangladesh Bank is going to provide liquidity support to four private banks – National Bank, EXIM Bank, Social Islami Bank, and First Security Islami Bank – that are facing a liquidity crisis due to significant irregularities during the Awami League regime. But the central bank would be using its own resources for this instead of resorting to printing money to keep the ongoing high inflation in check. According to Bangladesh Bank officials, the four banks have collectively requested around Tk25,000 crore in funding. The central bank is expected to extend support of Tk15,000 crore to Tk18,000 crore to help them recover from the crisis. (The Business Standard)
4.
External Corporate Debts Drop amid Business Ebb Tide: External corporate borrowing squeezes with short-term overseas debt stock having dropped to $10.73 billion in latest count as entrepreneurs postpone business expansion in wait for a feel-good ambiance after recent unrest. Officials and money-market analysts say such continuous downturn in private-sector foreign borrowing, despite interest rates on the global market stabilising and marginal easing of import compression on the domestic market, is not a good sign for the private sector-led economy. (The Financial Express)
5.
$348m in Bill Arrears Owed to IOCs, LNG Suppliers: Bangladesh owes US$348 million in outstanding bills to the international oil companies (IOCs) and the LNG suppliers, officials said. The Ministry of Finance (MoF) and the Energy and Mineral Resources Division (EMRD) officials said the amount fell due to different LNG suppliers and IOCs working in Bangladesh. "We have sought funds from the MoF to pay the outstanding bills and import LNG in a bid to meet the country's daily energy demand," said an EMRD official. Since Bangladesh needs to procure LNG to meet the local fuel demand, the government has to clear huge bills for the purpose. (The Financial Express)
6.
BB asks banks to rebuild image: Bangladesh Bank yesterday asked banks to find a way to rebuild the image of the country's banking sector in the international arena as Moody's recently downgraded Bangladesh's long-term ratings to B2 from B1. The ratings agency also changed the outlook of Bangladesh to negative from stable and downgraded Bangladesh's banking sector to "very weak" from "weak". The central bank's instruction came during a meeting between Bangladesh Bank Governor Ahsan H Mansur and the Association of Bankers, Bangladesh (ABB), a platform of the top officials of banks, at the central bank headquarters. (The Daily Star)
----Saju Sarker
BBN/SSR/AD