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IMF sets conditions for second tranche of $690 million in loan
The International Monetary Fund (IMF) has given a number of suggestions during the approval of releasing the second tranche of $690 million of a $4.7 l-billion loan for Bangladesh.
The IMF suggested a cautious monetary policy to restore macroeconomic stability in the short term. Along with this, the global lender has said to be more flexible fiscal policy in the currency exchange rate as a support of the policy.
Also read: Second tranche of $4.7bn loan for Bangladesh gains IMF Board's approval
The IMF suggested taking these measures along with increasing resilience to external shocks.
The IMF has appreciated the Bangladesh Bank's initiative to modernise the monetary policy framework further.
“If monetary policy is modern, it will reduce inflation and strengthen the effect of central bank policy in various areas,” the IMF commented in the meeting.
“Praising the currency's decision to adopt a single exchange rate, the IMF insisted on more flexibility gradually. They think it is necessary to deal with external shocks in the economy,” said the IMF.
Also read: Bangladesh Bank expects 2nd part of IMF loan in December
However, among the $690 million, nearly $468.3 million will be given under the ECF/EFF arrangement and $221.5 million under the RSF arrangement.
The ECF/EFF and RSF arrangements count $4.7 billion for Bangladesh, approved by the executive board on January 30, 2023. The first tranche count of $476 million was made available in February 2023.
“The ECF/EFF arrangement has helped restore macroeconomic stability and prevent disruptive adjustments to protect the vulnerable while laying the foundations for strong, inclusive, and environmentally sustainable growth,” the IMF said in a release on Wednesday.
Also read: Staff-level agreement reached with IMF for next tranche of $4.7 bn loan
The concurrent RSF arrangement has supplemented the resources made available under the ECF/EFF. IMF said this fund will help catalyse additional financing and build resilience against long-term climate risks.
Cabinet body okays proposals for import of 3.065 million MTs of petroleum oils, other products
Cabinet Committee on Government Purchase (CCGP) in a meeting on Wednesday approved a number of proposals including the import of 3.065 million metric tons of petroleum oils from foreign suppliers in 2024.
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Finance Minister AHM Mustafa Kamal presided over the virtually held meeting.
As per the proposals, moved by the Energy and Mineral Resources Division, state-owned Bangladesh Petroleum Corporation (BPC) will import the entire petroleum oils to meet the local requirements.
Of these, 1.5 million (15 lakh) MTs are crude oil and the remaining 1.565 million (15.65 lakh) MTs are refined petroleum.
As per the proposals, some 800,000 (8 lakh) MTs of light Arabian Light Crude (ALC) oil will be imported from Saudi Aramco at a cost of Tk 6,407.35 crore while 700,000 (7 lakh) MTs of crude oil will be imported from Adnoc of Abu Dhabi at a cost of Tk 5808.52 crore.
The proposed 1.5 million (15 lakh) MTs of refined petroleum oils will be imported from January to June period in 2024 through international quotation process from different suppliers at an approximate value of Tk 13,599.79 crore.
Annually, Bangladesh requires about 6.5 million MTs of petroleum fuels of which it imports 1.5 million MTs of crude oils while the remaining is refined petroleum oils of different types.
The diesel dominates the import quantity.
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The CCGP approved a proposal to set up a 100 MW wind power plant in Satkhira district under private sector sponsorship from which the government will purchase electricity.
As per proposal, the Sustainable Energy International Ltd will set up the plant and the state-owned Bangladesh Power Development Board (BPDB) will purchase electricity from the plant over the period of 20 years at a tariff rate of Tk 13.525 (about US Cent 12) per kilowatt hour spending Tk 5687.08 crore.
Under another proposal, the Consortium of (1) Infraco Asia Development Pte Ltd; (2) Greencells GmbH. and (3) Global Greengen Ltd., will set up a 10 MW solar (AC) power plant in Sadar Upazila of Noakhali District.
The BPDB will buy electricity over the period of 20 years at a tariff rate of Tk 11.017 (about US Cent 9.7) per kilowatt hour spending Tk 357.12 crore.
The committee also approved two separate proposals of Bangladesh Agriculture Development Corporation (BADC) to import 30,000 MTs of TSP fertiliser from OCP, SA of Morocco at a cost of Tk 132.63 crore and 25,000 MTs of TSP fertiliser from GCT of Tunisia at a cost of Tk 109.14 crore.
A proposal of Rapid Action Battalion (RAB) received an approval for import of 4 personnel armoured carrier vehicles at Tk 23.91 crore.
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The committee also approved a number of proposals for import of rice bran oil, soybean oil and lentils by Trading Corporation of Bangladesh (TCB) from local suppliers.
Bangladesh now boasts 206 LEED-certified green factories: BGMEA
Bangladesh has achieved remarkable progress in sustainable fashion, boasting 206 LEED-certified green factories. This impressive lineup includes 76 platinum-rated and 116 gold-rated facilities, underscoring the country’s strong commitment to environmental stewardship.
In just the past six months, this growth has been especially notable with the addition of 24 new factories, comprising 16 platinum and 8 gold certifications. Mohiuddin Rubel, Director of BGMEA and Managing Director of Bangladesh Apparel Exchange, and Additional Managing Director of Denim Expert Ltd., highlighted this expansion. He emphasized Bangladesh’s critical role in leading the global market towards more eco-friendly garment production.
BGMEA urges Epic Group to invest in high-end apparel development in Bangladesh
Rubel further pointed out the importance of this commitment to sustainability, not just for commendation but also for the enduring success and viability of the industry.
A significant marker of this achievement is that 54 of the top 100 LEED green factories globally are now in Bangladesh. This includes 9 out of the top 10, and 18 of the top 20, a milestone that is likely to draw more investment and partnerships. This positions Bangladesh as a formidable global leader in sustainable manufacturing.
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The surge in LEED-certified green factories in Bangladesh reflects the garment industry’s steadfast dedication to environmental sustainability, Rubel added.
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ADB predicts robust growth for developing Asia amid global challenges
The Asian Development Bank (ADB) updated its 2023 growth projection for South Asia to 5.7%, citing India’s stronger-than-expected economic performance. The forecast for 2024 remains steady at 6%. Despite global challenges, the economic outlook for developing Asia is optimistic.
Growth forecasts for the South Asia subregion for 2024 are maintained at 6% despite downward revisions in the forecasts for Bangladesh and Maldives. The 2024 growth projections for the subregion’s other economies are unchanged.
The 2023 growth forecast for developing Asia has been revised upwards to 4.9%, an increase from the previously projected 4.7% in the Asian Development Outlook of September 2023. This revision is attributed to strong domestic demand. The growth forecast for 2024 is consistent at 4.8%.
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Inflation in developing Asia is expected to decrease, falling from 4.4% in the previous year to an adjusted 3.5% this year. It is projected to experience a slight increase to 3.6% in 2024.
ADB Chief Economist Albert Park remarked, “Despite the challenging global environment, Developing Asia continues to exhibit robust growth. The region is also gradually bringing inflation under control. However, risks persist, ranging from high global interest rates to climate-related events like El Niño. It is crucial for governments in Asia and the Pacific to stay alert and ensure their economies are resilient and that growth is sustainable.”
The inflation forecast for South Asia is unchanged at 8.6% for 2023, but revised up to 6.7% for 2024.
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This revision reflects higher inflation forecasts for Bangladesh and Nepal.
Despite several efforts to reduce inflation, the monthly rate in Bangladesh was close to double digits in July–October due to rising food inflation.
Inflation is expected to ease in the coming months on continued contractionary monetary policy, measures taken to secure a market-based exchange rate, lower global commodity prices, and a better crop outlook.
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The inflation forecast for Nepal in 2024 is revised up due to continued pressure on prices and the assumption of higher international oil prices in 2024.
The inflation forecast for Maldives for 2023 is reduced slightly, as Q3’s average inflation rate was lower than projected earlier.
Potential downside risks include prolonged high interest rates in advanced economies, possibly leading to financial instability. Additionally, supply disruptions from events such as El Niño and the ongoing Russian invasion of Ukraine could pose renewed challenges in energy and food security, potentially reigniting inflation, the ADB warns.
Second tranche of $4.7bn loan for Bangladesh gains IMF Board's approval
The International Monetary Fund (IMF) at its December board meeting Tuesday, approved the release of a second tranche of a $4.7 billion loan that was approved last January. This second transfer will see $682 million transferred to Bangladesh's account, to go with close to $450 million in the first transfer.
Alongside the $400 million the country received as loan from the Asian Development Bank (ADB), the IMF monies will help to ease significant pressure that has been building on the country's forex reserves in the last two years.
Also read: Staff-level agreement reached with IMF for next tranche of $4.7 bn loan
Finance minister AHM Mustfa Kamal confirmed it to UNB last night.
The IMF board approved the $4.7 billion loan on January 30.
In the first tranche, Bangladesh received $447.8 million on February 2 this year. The country is expected to receive the rest in another five tranches.
Also read: IMF relaxes forex reserve and revenue targets for $4.70 billion loan
Earlier, in October, an IMF delegation came to Bangladesh on a two-week visit, reviewed the loan programme and placed the second loan tranche proposal before the IMF board.
Rubel Aziz re-elected as Banani Club president
Rubel Aziz has been re-elected president of Banani Club Limited unopposed. He will perform this duty for the next one year.
This election was held on December 9 at Banani Club to select the president and executive committee members. A total of 525 members of the club voted in the election.
Also read: Gaus Khan elected president of Uttara Club
Syed Ahsanul Apon has been elected as a member of the executive council for the second time by getting the highest number of votes.
He got a maximum of 85 percent of the votes.
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The other elected members of the ten-member executive committee are – Imtiaz Ahmed, Md. Sharif Ullah Nadim, Faruque Amjad Khan, Makin-Ur-Rashid Rossi, Mamun Akbar, Sifat Ahmed Chaudhuri, Anik Ghosh, Salma Hossain Ash, and Sadia Azam.
Banani Club Election Board Chairman Ahmed Kabir announced this result. At that time 12 members of the board were present.
Bangladesh Bank scraps minimum interest rate on deposits
Bangladesh Bank on Tuesday scrapped the minimum interest rate it had imposed for deposits.
From now on, banks will be able to set interest rates in line with their business interests and collect deposits accordingly.
Also read: Banks set to sell insurance products as central bank greenlights bancassurance
The central bank announced the decision through a circular today (Tuesday). The Banking Regulations and Policy Department of BB issued this notification on Tuesday and sent it to the top executives of the scheduled banks for immediate execution.
The notification stated that the minimum interest rate for deposits was fixed. According to that directive, the central bank instructed all the scheduled banks of the country not to keep the interest rate of fixed deposits below inflation.
Also read: Rural bank deposits down by 22.56 percent: Bangladesh Bank
At that time the maximum interest rate for disbursement of loans was 9 percent. But now there is no such limit in terms of loans. The market-based interest rate system for loans was introduced in July this year.
Hence, there is no need for a minimum interest rate on deposits as well. Due to this, the instruction of August 8, 2021, was canceled, the BB notification said.
Also read: Bangladesh received $1.93 billion of remittance in November: BB
Banks set to sell insurance products as central bank greenlights bancassurance
All the scheduled banks operating in the country can now act as agents of insurance companies.
At the same time, banks can engage in marketing and selling insurance products.
The Banking Regulations and Policy Department of Bangladesh Bank (BB) issued instructions in this regard today (Tuesday).
Also read: Rural bank deposits down by 22.56 percent: Bangladesh Bank
Bancassurance is an arrangement between a bank and an insurance company allowing the insurance company to sell its products to the bank's client base.
According to the instructions, Bancassurance has been introduced through scheduled banks operating in the country. All banks are given the power under the Bank Companies Act, 1991 can do the business of marketing and selling insurance products as 'corporate agents' of insurance companies from December 12 (Tuesday).
Also read: Banks will provide 7% interest on foreign currency deposits: Bangladesh Bank
Those concerned said that bancassurance is a French word. First launched in France and Spain around 1980. Life insurance policies are sold through banks in most European countries. It has also gained popularity in various Asian countries. It was introduced in neighboring India about three centuries ago. Pakistan, Sri Lanka have also been successful in bancassurance.
Bancassurance will be implemented mainly through the branches of the country's banks as per the approved policies and guidelines. There has been a complaint for a long time that the general public's trust in the insurance sector is relatively low, so bancassurance can be a place of trust.
The idea is that customers do not have to go to the insurance company for the insurance product but go to the bank branch.
Also read: Supply of dollars in banks is more than required: BB
BGMEA urges Epic Group to invest in high-end apparel development in Bangladesh
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President
Faruque Hassan has urged Epic Group to make investments in product and design development, particularly in high-end apparels in Bangladesh.
He also requested the Epic Group to continue its support and collaboration in improving efficiency, technical knowledge and sustainability in the RMG industry of Bangladesh.
This call was made by Faruque Hassan during his meeting with Ranjan Mahtani, Executive Chairman of Epic Group, alongside Epic Group CEOs Sunil Daryanani and Dinesh Virwani.
The meeting was also attended by Azfar Hassan, Director of Giant Group.
Held in Hong Kong on December 12, the primary focus of the meeting was to explore avenues to fortify the longstanding business partnership between Epic Group and Bangladeshi suppliers.
They also talked about how BGMEA and Epic Group could work together to enhance global promotion of Bangladesh's apparel industry, focusing on its strengths, world-class workplace safety, environmental sustainability, and exemplary industry practices.
BGMEA President Faruque Hassan urged Epic Group to collaborate closely with their suppliers in Bangladesh in developing their capacities and technical expertise in the manufacturing of high-end apparel products.
He also called upon Epic Group to increase its sourcing of high-value garments from Bangladesh.
Chinese company to invest USD 11.6 million in BEPZA economic zone
Chinese company Quality Sportswear Mfrs Limited is going to invest USD 11.55 million to set up an RMG, luggage, and fashion accessories manufacturing industry in the BEPZA Economic Zone.
BEPZA) signed an agreement with the company to this effect at BEPZA Complex in Dhaka on Tuesday, according to a press release.
Ali Reza Mazid, a member (investment promotion) of BEPZA, and Zhang Zhilan, director of Quality Sportswear signed the agreement on behalf of their respective organisations.
BEPZA Executive Chairman Maj Gen Abul Kalam Mohammad Ziaur Rahman, NDC, psc witnessed the signing ceremony.
This fully foreign-owned company will produce annually 6.05 million pieces of garments and 0.8 million pieces of money bags, travel bags, belts, among other products. The company will create employment opportunities for 3,310 Bangladeshi nationals.
BEPZA has so far approved a total of 26 enterprises, including this one, to establish industries in BEPZA EZ and most of them will produce diversified products. The total proposed investment of these enterprises is USD 529.4 million.