Falling edible, fuel oil prices seen blessings for Bangladesh
Securities and Exchange Commission Chairman Faruq Ahmad Siddiqi yesterday said the falling prices of edible oil and fuel are blessings for Bangladesh economy.
“Now the government will have to borrow less and this will help increase the credit flow to the private sector,” he said at a roundtable on global financial crisis and its impact on Bangladesh.
Dhaka Stock Exchange (DSE) organised the roundtable at Sonargaon Hotel with its Senior Vice-president Saiful Islam in the chair. Prof MA Baqui Khalily presented a keynote paper.
The SEC chairman said Bangladesh cannot avoid the impacts of the global financial crisis in the long run as the consumption pattern of the developed countries would cool down. “The situation will be complex if the recession continues for up to three years,” he said.
Referring to the recent slide in fuel prices, he said this will cast an immediate impact on Bangladesh, as the government has to pay a huge amount in subsidy for the sector.
But, Siddiqi said the RMG sector might face a critical situation due to the ongoing recession. “But the hope is that Bangladesh exports mainly cheap RMG products.”
He suggested the government to diversify manpower export, saying, “If the recession prolongs, it might affect the country's manpower export.”
In his keynote paper, Prof MA Baqui Khalily said the SEC should reformulate securitisation rules with appropriate governance structure, avoid principal-agency problem in credit rating, carefully monitor investment banks and must revisit the rules and regulations so that they do not lag behind in regulation.
He said global financial crisis is unlikely to affect Bangladesh's financial sector, capital market and the overall economy in the short term. “This is not the issue of impact, but it's a lesson for the future.”