Good morning. Here's what happened overnight and what you need to know today.
1.
Forex Market Volatile again on Ramadan Import Rush, Overdue LCs: After a five-month pause, dollar rates have started to rise, prompting the central bank to question the managing directors of 13 banks about the fresh volatility of the greenback. In their response to the Bangladesh Bank (BB) yesterday, several bankers said the foreign exchange market is currently under pressure due to the opening of letters of credit (LC) for essential Ramadan commodities and the settlement of overdue LCs. They further cited the central bank's dollar purchasing spree to safeguard dwindling forex reserves and market manipulation by certain exchange houses as contributing factors to the recent dollar hikes. (The Daily Star)
2.
A Wake-Up Call for Bangladesh to reform its Healthcare: India's visa restrictions on Bangladeshi nationals, while initially perceived as a barrier, could serve as a wake-up call for Bangladesh to strengthen its healthcare system and regain the confidence of its patients. With as many as 3.5 lakh Bangladeshis seeking medical treatment in India annually, the restrictions offer a unique chance for local providers to address systemic issues and retain patients who would otherwise travel abroad. Experts urge Bangladesh's health authorities to rise to the occasion and rebuild trust among its citizens. (The Daily Star)
3.
Janata Seeks Tk10,000cr Liquidity Support from Bangladesh Bank: State-owned Janata Bank has requested Tk10,000 crore in liquidity support from the Bangladesh Bank to stabilise its cash flow and normalise liquidity situation. Confirming the matter, Md Mazibur Rahman, managing director of Janata Bank, told The Business Standard that the bank has recently sent a letter to the central bank, requesting a Tk10,000 crore loan for a five-year term at 4% interest. "If we receive this amount, our liquidity situation will improve," he said. When asked why the bank needed money at this moment, he said, "Everyone is aware of the bank's current situation. I have recently taken over the role as MD, and many customers are coming to withdraw money. To avoid future problems in case of increased withdrawal pressure, we have requested this loan from the central bank." (The Business Standard)
4.
Review of Palak’s Spending Binge: Tk7,000cr Can Be Saved on 21 ICT Projects: With an ICT incubation centre lying underutilised in Natore town, another IT park was planned in Singra upazila of the same district. Natore, the home district of Zunaid Ahmed Palak, the ICT state minister of the toppled Awami League government, was one of the locations selected for ICT parks with Cineplex. Six such movie theatres planned in districts including Rangpur, Gopalganj and Natore would have cost Tk90 crore. The list of extravagant plans does not end here. Over Tk370 crore plan to make ten movies on the lives of Sheikh Hasina and her family members, and transforming 10 villages into IoT-based "digital villages" at a cost of Tk500 crore were among the development plans on the ICT Division's table when Palak was there. (The Business Standard)
5.
Crawling Peg in Dollar-Taka Exchange Destined for Demise: An overriding reality now prompts the central bank to discard the virtually derelict crawling-peg regime and consider a more flexible exchange-rate mechanism to bring stability in the overheated foreign-exchange market. The Bangladesh Bank (BB) has now been working on the new system which is possibly to be implemented from January 2025, according to officials in the know. Following recommendation from the International Monetary Fund (IMF) as part of a US$4.7-billion lending package to stabilise Bangladesh's macroeconomic situation, the banking regulator introduced the much-touted crawling-peg system for interim period before transiting into fully market-driven exchange rate since June 2024. (The Financial Express)
6.
BB Now Can Hire ICFs for Banks: The central bank has introduced special regulations to hire international consulting firms (ICFs) for commercial banks in order to improve their financial health through diagnosing the bank companies. The central bank communicated the special regulations to managing directors and chief executive officers of all scheduled banks through issuing a notification on Sunday. Earlier, the Board of Directors of the Bangladesh Bank in its 438th meeting made the regulations styled 'The Special Regulations of Bangladesh Bank-2024'. The regulations take immediate effect. (The Financial Express)
----Saju Sarker
BBN/SSR/AD