Dhaka, Bangladesh (BBN) – The BBN (Bangladesh Business News) has prepared the morning business round up compiling reports, published by different newspapers and news portals in Bangladesh.
Cautionary monetary policy
Overall, the monetary policy statement is appropriate for the current state of the economy. The key macro targets are closer to reality. Gross domestic product growth is projected at around 7 percent, based on expectation of a recovery in export growth and turnaround of remittance decline supported by strong demand from trade, construction and SMEs.
MPS pro-pvt sector, but lacks direction: FBCCI
Federation of Bangladesh Chambers of Commerce and Industry termed new monetary policy statement as pro-private sector “>but it lacks policy guideline on recovering non-performing loans and checking ‘black money’. According to the monetary policy launched by Bangladesh Bank for January-June period of fiscal year 2016-17 private sector credit growth and domestic credit growth are projected to grow by 6.5 per cent and 16.4 per cent. ‘We find it OK,’ said FBCCI president Abdul Matlub Ahmad while talking to BSS.
BB warns banks of loan diversion into stocks
Bangladesh Bank in its monetary policy asked the banks to be cautious about diversion of loans into the stock market in the wake of recent rally. The country’s stock exchanges had been experiencing lacklustre business since the stock crash in 2010. Bangladesh Bank Governor Fazle Kabir also asked financial institutions to strengthen surveillance of loan usage by their customers so that they cannot divert it to stocks for abnormal profits.
Bangladesh’s NBFIs allowed borrowing 30% of equity from money market
The central bank of Bangladesh has set call money borrowing limit for the non-banking financial institutions (NBFIs) based on their equity instead of the existing net asset. Officials said the Bangladesh Bank (BB) has taken the latest measures aiming to enhance the NBFIs’ equity. Under the new provisions, the equity of a NBFI will be fixed on the basis of its balance-sheet on December 31, 2016, according to a notification, issued by the central bank on Sunday. The new provision will come into effect from February 1, it added.
Bangladesh’s stocks plunge on panic sales
Bangladesh’s stocks witnessed a sharp fall on Sunday as investors went on selling spree, fearing further fall of stock prices. Analysts said the market observed a major setback as investors sharply retorted to the monetary policy statement which was unveil Sunday. There is no addition to capital market incentives in the monetary policy statement rather the Bangladesh Bank (BB) said that it would closely monitor the banks’ exposure to the capital market.
BB stays alert amid emerging risks
The cagey monetary policy of the first half of fiscal 2016-17 will continue in the second half of the year despite buoyancy in the economy in the light of emerging risks of a stockmarket bubble and rising inflation. The private sector credit growth target will remain the same at 16.5 percent, and so will repo and reverse repo rates, both of which are used to control inflation, at 6.75 percent and 4.75 percent respectively.
12.6% of budget spent in Q1
The government has spent Tk42,894 crore from the current national budget in the fiscal year’s first quarter, which is only 12.59% of total allocation. The total budget allocation is Tk3,40,605 crore in the ongoing FY2016-17. Finance Minister AMA Muhith disclosed the figures in the Parliament yesterday. Of the figure spent, the expenditure in non-development sector was Tk35,325 crore and the rest of the money was spent on development sector, according to the quarterly report.
Corruption eats away 3pc GDP, says ACC
The Anti-Corruption Commission chairman Iqbal Mahmood on Sunday said corruption is eroding up to three per cent of the country’s gross domestic product. He, however, did not refer to any study or organisation to justify the extent of corruption, in relation to Bangladesh’s GDP. The ACC chairman came up with the remark at a discussion on ‘Combating Drug Abuse and Corruption in Bangladesh,’ organised by North South University, in its auditorium. Iqbal urged the people to move together against corruption as the ‘mad horse of corruption’ is racing faster.