BB cautions exporters against crisis fallout

Bangladesh Bank Governor Dr Salehuddin Ahmed yesterday urged exporters, mainly ready made garments sector people, to cautiously receive orders from new buyers since the latter risks turning bankrupt due to the present global financial crisis.
At a press conference at his office in Dhaka, BB governor also advised all financial sector regulatory bodies, including the central bank, to be more vigilant in the present global context so that the local financial sector does not suffer.
“In times of such financial crisis, some buyers may place higher volumes of orders, with a commitment to pay within two months. But they may become bankrupt in the meantime and fail to pay,” said Salehuddin.
In the global context, the financial crisis is more prevalent in the insurance sector, share markets and investment banking rather than commercial banking, the central bank chief pointed out, suggesting that other regulatory authorities, such as the Securities and Exchange Commission and Controller of Insurance, should regulate the market strongly to protect people's interest.
In response to a question, Nazrul Huda, BB deputy governor, said the central bank wants to reduce the interest rate spread to five per cent by lowering the lending rates of productive sectors.
The deputy governor also said the goal can be attained by increasing deposit rates or by decreasing consumer credit rates. “But our main focus is to decrease lending rates in productive sectors in the nation's interests,” he said. He said he was hopeful that banks would do it by December.