BB chief says exporters will get incentive to enter new markets

Bangladesh Bank Governor Atiur Rahman said yesterday additional incentives would be offered to exporters to enter new markets with diversified products.

“We are ready to assist entrepreneurs. If needed, we will support our exporters from foreign exchange reserves,” said Rahman at a seminar on fallout of the global financial crisis on international trade financing.

Bangladesh Institute of Bank Management (BIBM) organised the programme where a study, conducted by BIBM academics -- Dr Toufic Ahmad Choudhury and Dr Shah Md Ahsan Habib -- observed that the meltdown has not left any significant impact on trade financing in Bangladesh.

Garment, the main export item, did not suffer significantly rather it gained a market share in large and developed economies compared with Bangladesh's competitors.

But falling demand due to the global recession had earlier cast a negative impact on some major exporting sectors such as frozen foods, leather and jute.

“Despite challenges, the global recession has opened up a lot of opportunities. We have become number one in apparel exports to the US,” Rahman said.

The recent data shows signs of a fall in garment exports. Presenters at the seminar feared that garment exports might face pressure in the coming months, as there are instances that the volume of orders has declined.

“In Bangladesh, one observable change in export letters of credits (LCs) received by domestic traders is that the number of deferred LCs has increased remarkably over the last few months,” said BIBM Director Toufic Ahmad Choudhury.

Researchers suggested that a sufficient flow of credit should be ensured in the backdrop of falling export orders.

The BB governor said the central bank has increased the size of the Export Development Fund to facilitate exports.

“We will also give additional incentives to exporters for an entry to new markets."

"At the same time, we will also help troubled exporters to return from losses, based on the suggestions from the task force,” he said.

“But our exporters should not depend on state assistance. They should have in mind that we want to win by competing with others."

Referring to the issue of incentives, Centre for Policy Dialogue (CPD) Executive Director Mustafizur Rahman suggested offering economy- or region-wise incentives to encourage exports.

“We should look at economy-wise incentive policy."

The CPD executive director also suggested the central bank enhance foreign exchange loan limits in favour of exporters.

He referred to the problems of loan rescheduling by small and medium exporters and importers and said: “We should also have a window for rescheduling their loans.”

BIBM Director General Dr Bandana Saha, Managing Director and Citi Country Officer Mamun Rashid, Prime Bank Managing Director Ehsanul Haque also spoke.