Bangladesh Bank yesterday began publishing foreign currency reserves as per the International Monetary Fund’s BPM6 manual, in a move that will ensure that the country’s dollar stockpile is reported accurately.
Bangladesh, India to begin bilateral trade in rupee from July 11
The banking sector is burdened by a high non-performing loan (NPL) and will need to continue measures to beef up supervision and accelerate loan recovery, according to the Bangladesh Bank.
The country’s foreign exchange reserves rose past $31 billion yesterday after three multilateral lenders provided $925 million to Bangladesh.
Allowing directors to stay on for 12 years will deal a huge blow to the financial health of banks, which are already facing several crises, including a lack of corporate governance in recent years, say experts.
On the surface, the monetary policy appears to be tuned to the need of the hour: bring down inflation and conserve reserves. But it comes caving down on careful reading.
The Bangladesh Bank may today raise its key interest rates to tame inflationary pressure but the attempt might go in vain since the monetary authority may not withdraw the interest rate cap on loans in a true sense.
Eleven banks in Bangladesh faced a collective capital shortfall of Tk 33,575 crore in March, up 9.3 per cent from a quarter ago, in a reflection of their worsening financial health caused by persisting irregularities and lack of governance, central bank data showed.
The Bangladesh Bank has decided to implement a market-based interest rate from July, moving away from the 9 per cent interest rate cap on loans, an initiative that may help the central bank uses its policy rates effectively in its fight against higher inflation.
The central bank has kept injecting a hefty volume of US dollars into the market to help banks clear import bills, eroding the Bangladesh’s foreign exchange reserves.
The central bank has set a goal so that at least 75 per cent of retail transactions are settled through digital technologies by 2027, a move that may give Bangladesh’s digital transformation a massive fillip and turn the cash-based economy into cashless.
The deficit in Bangladesh’s financial account widened substantially in the first eight months of the ongoing fiscal year, in an indication that the current stress in the foreign exchange regime will continue in the coming months.
Many banks in Bangladesh struggled to ensure expected profit in the last couple of years owing to the business slowdown, but The City Bank Ltd managed remarkable returns on the back of corporate governance and diversified products.
The Bangladesh Bank yesterday said the ongoing global uncertainties may have an adverse impact on the country’s growth momentum and the inflationary situation.
Silicon Valley Bank (SVB), the 16th largest lender in the United States, has not reportedly faced any scam or lack of corporate governance. Still, it could not avoid the collapse.
The government has continued borrowing from Bangladesh Bank as commercial banks have been unable to come up with much-needed funds owing to a liquidity crunch.
Bangladesh’s foreign currency reserves have slipped to a six-year low of $31.15 billion after the central bank cleared import bills to the tune of $1.05 billion with a number of Asian countries, official figures showed.
Bangladesh Bank’s foreign exchange reserves invested in US dollars declined 34 per cent year-on-year to $23.63 billion in February as the country is heavily dependent on the American greenback to settle payments for global trade.
