Bangladesh Bank has introduced a US dollar booking policy for maximum 1 year, at a higher rate, to meet future requirements. According to the new rules, after one year, the bank will be able to charge a maximum of 5 percent more than the current dollar price with a 'SMART' rate. The central bank issued a circular in this regard on Sunday. Despite Bangladesh Bank Governor’s decision to not raise exchange rate before election, dollar rate hiked again Under the new rules, dollars can be kept with bookings for up to one year. For this, the buyer has to pay extra. It will be determined by the method with which loan interest rate is determined now. Currently, the dollar price for import is fixed at Tk 110.5. If anyone wants to book a dollar for future, he/she will have to pay Tk 123 per dollar after one year.  Selling dollars at higher prices: What is Bangladesh Bank’s action against treasury heads of 10 banks?

Bangladesh Bank decided not to bring major changes in the US dollar exchange rate before the upcoming national election. The central bank’s Governor Abdur Rouf Talukder informed of this decision at a meeting with managing directors and CEOs of banks recently. At that meeting, the governor said that Bangladesh Bank will not make any policy changes regarding the dollar market or the foreign currency market before the national election. Despite this decision, the dollar rate has been raised by Tk .50 or 50 paisa in all cases. The price of the dollar has increased to Tk 110 in case of export and expatriates’ income, and to Tk 110.50 in case of import. Read: Selling dollars at higher prices: What is Bangladesh Bank’s action against treasury heads of 10 banks?The dollar rate was hiked again yesterday, which is effective from today. The dollar crisis in the country has become evident since March 2023, following the downturn caused by the Russia-Ukraine war. To deal with this crisis, Bangladesh Bank fixed the dollar price at the beginning. This worsened the crisis. Later, last September, Bangladesh Bank withdrew from determining the price of the dollar. Read: Bangladesh Bank seeks explanations from 13 banks for selling dollars at higher prices This responsibility has been given to the Association of Bankers, Bangladesh (ABB) and Bangladesh Foreign Exchange Dealers’ Association (BAFEDA). Since then the two organizations have been jointly setting the dollar price for export, remittance earnings, and payment of import liabilities. Read more: Dollar goes off kerb market after central bank-led raids of money exchanges

Bangladesh Bank is working to take disciplinary action against the treasury heads of 10 commercial banks over selling US dollars at prices higher than the fixed rate. The central bank sent letters to these banks mentioning the offence with instructions of punishment. Bangladesh Bank stated in the letter that the treasury chief cannot ignored the responsibility of such offence. Read: Bangladesh Bank assures businesses interest rate won't go too high Banks’ treasury departments handle the demand and supply of money and dollars. In some banks, there is also an officer, of deputy managing director rank, as the head of the treasury department. According to information from various sources, the 10 concerned banks are: Mercantile Bank, Premier Bank, BRAC Bank, Madhumati Bank, Midland Bank, Exim Bank, Social Islami Bank, Al-Arafah Islami Bank, Shahjalal Islami Bank and Trust Bank. Read: Bangladesh Bank relaxes rules for EFPF loan payment Sources said this number of banks may increase. In August last year, Bangladesh Bank removed the heads of the treasury departments of six domestic and foreign banks based on the same complaint. But in the end, the regulatory body could not uphold that decision. Chairman of Association of Bankers, Bangladesh (ABB) and Managing Director (MD) of BRAC Bank, Salim RF Hossain, said that this is a bilateral issue between the central bank and the respective scheduled banks. “Such letters come regularly. Therefore, I do not want to make any specific comments on this issue,” he said. Read: Bangladesh Bank seeks explanations from 13 banks for selling dollars at higher prices

Businesses have sought the US dollar at a fixed rate for import LCs and not to increase the interest rate by much, to maintain a sustainable business environment in the country. The president of the Federation of Bangladesh Chamber of Commerce and Industry (FBCCI) Mahbubbul Alam on Monday placed these requests to Bangladesh Bank (BB) Governor Abdur Rouf Taluder, during a meeting between the two. FBCCI leader Jibon Deb Nath obtains D.Litt degree from France’s Thames International University “We met with the central bank governor with a delegation of top businessmen and expressed our concern on the important issues on behalf of the country’s business community,” the FBCCI president told UNB after the meeting. He said many traders have to open Letters of credit (LCs) buying dollars at a higher price than the fixed rate, which impacts import of goods. The BB’s governor has been requested not to increase the interest rate of bank loans by large margins as the businesses are already facing difficulties in the depreciation of domestic currency taka, Mahbub said. The governor assured the businesses that the interest is now fixed according to the smart rate, there is no option to increase the interest rate to an abnormal level in the current system, the meeting sources said. In the new system, the lending rate for banks will be determined at SMART (six-month moving average interest rate) plus a margin of up to 3 percent. FBCCI president says they are against dishonest businessmen The SMART reference lending rate would be fixed on the basis of the 182-day treasury bills and announced on the first working day of each month. The central bank controls the interest rates of T-bills and T-bonds. Referring to the system the FBCCI president said, "We are very concerned about the rising interest rate and sought cooperation from the Bangladesh Bank so that it does not increase too much." He said businesses are finding it difficult to open letters of credit (LCs) as they are not getting the dollar at Tk 110, a rate fixed by the Bangladesh Foreign Exchange Dealers Association (BAFEDA) and the Association of Bankers, Bangladesh (ABB). Japan wants to increase investment in Bangladesh: Japanese envoy told FBCCI Although a number of importers are getting the dollar at the fixed rate, many others are being compelled to cough up an additional amount to open the LCs, the FBCCI alleged. Executive Director and spokesperson of BB Md Mezbaul Haque said businessmen expressed their concerns about the interest rate. The governor assured them that the interest would not rise much, he added.

The Bangladesh Bank (BB) has sought an explanation from 13 banks for selling US dollars at high prices. The summoned banks belong to the private sector, including a Shariah-based Islami Bank. The central bank confirmed the information on Monday (September 04, 2023). The letter was sent to different banks on Sunday (September 3) and the banks have been asked to provide an explanation in this regard within the next five working days. Also read: Dollar goes off kerb market after central bank-led raids of money exchanges The bank’s Executive Director and Spokesperson Md. Mesbaul Hoque told UNB that the trading licences of seven money changers have been suspended for selling dollars at higher prices. An explanation has been sought from 10 more money changers following similar complaints. In addition, banks are also being monitored. Punitive action will be taken if concrete evidence is found, he said. In August, the maximum import price of Tk109.5 was set, but some banks sold dollars up to Tk117, and bought it at Tk116. Also read: Bangladesh Bank working to normalise inflation and dollar crisis despite geopolitical challenges Dollar transactions are inspected by Bangladesh Bank's Financial Integrity and Customer Service and Foreign Exchange Inspection Departments. Recently, the central bank sent for inspection due to the increase in the price of the dollar. After collecting the information, the issues of dollar sales are being verified. In 2021, the central bank ordered to spend Tk 500 crore on the CSR sector from the profits of 12 banks due to excess profit. There were two foreign-owned banks and 10 private sector banks on that list. The dollar crisis in the country has become evident since March last year after the start of the Russia-Ukraine war. To deal with this crisis, the central bank fixed the dollar price at the beginning, but the crisis continued. Also read: Bangladesh Bank introduces 'market-based' dollar exchange rate with rate cap

Inflation continues  to persist at a high level in Bangladesh, affecting the lifestyles of common people severely as they struggle to survive on limited earnings in the aftermath of the Covid-19 pandemic. Figures released on Sunday showed general inflation remained virtually unchanged at 9.69 percent on a point-to-point basis for the month of July, having been 9.74 percent in June, said the Bangladesh Bureau of Statistics (BBS). The Ministry of Finance and Bangladesh Bank (BB) have blamed the external factors for inflation while they failed to adopt the right fiscal and monetary policy measures, said economists. Read: General inflation virtually unchanged at 9.69 percent in July Talking with UNB former governor of the Bangladesh Bank Dr Atiur Rahman said Bangladesh could not go for adequate tightening of the monetary policy in time to rein in inflation while the US Federal Reserve continues to raise policy rates persistently. He said, the Reserve Bank of India (RBI) has also been raising policy rates consistently, while agriculture production rising consistently to strengthen the supply side. The market imperfections caused by growth curtail the root cause of higher food inflation and other necessities. The depreciation of the Taka had also been raising imported inflation at these times. The rent-seeking on the roads by some quarters besides higher transport prices due to readjusted fuel prices may have also been fuelling inflation from the supply side, Dr Atiur said. Read: Bangladesh Bank working to normalise inflation and dollar crisis despite geopolitical challenges He suggested the ways out may be to further tighten monetary policy and reduce public expenditure to reduce public borrowing from the central bank to align fiscal policy along with tighter monetary policy. The competition commission and Consumer Protection Authority must wake up to break the curtails. The roads should also be made rent-free to facilitate smooth flows of goods and daily necessities. The exchange rate must be stabilized at a single rate and hurdles for small entrepreneurs in opening letters of credit with adequate dollar support could ensure smooth supplies of imported goods for consumption and raw materials for continued production of goods and services could also help stabilize the prices of the same. Read: Ex-governors optimistic MPS can claw back inflation, implementation the key The regulators should keep on communicating well in anchoring the inflation expectations so that inflation does not get embedded in consumer psychology. Dr Zahid Hussain, the former lead economist of the World Bank's Dhaka office, told UNB that no measure has been taken to rein the inflation so far. He said the reigning repo rate is not affecting the market, and the increase of 1.0 percent in interest rate from July is not making any impact on the money market. He pointed out that printing currency to meet government expenditures is also fuelling inflation. Read: CPD dismisses budget's projections on growth, inflation, revenue collection Dr Zahid said there is no control over pricing of essentials products in the market, and businesses are making hefty profits showing supply-side uncertainty in the wake of the foreign exchange crisis. Dr Ahsan H Mansur, former economist of IMF and executive director of Policy Research Institute (PRI), told UNB that the BB printed more currency (taka) in a single year than it had in the last 50 years, which brought  additional inflationary pressure. Denying the BB claim of printing money as a regular matter that has no impact on inflation, Mansur said printing money against the US dollar, which commercial banks sold to the central bank is a different issue. Explaining the situation, Dr Mansur said despite the dollar crisis, the printing of high-speed money (printing currency) is continuing, which obviously brings impact on higher inflation, resulting in Bangladesh’s inflation rising while Sri Lanka and other Asian countries’ inflation is falling.

The High Court on Sunday (August 06, 2023) asked the authorities concerned to investigate the allegations brought against S Alam Group over "transferring money abroad and investing in foreign countries without permission from Bangladesh Bank" and submit the report within two months. The HC bench of Justice Md Nazrul Islam Talukder and Justice Khizir Hayat passed the sue moto rule when Barrister Syed Sayedul Haque Suman, a prominent lawyer of the Supreme Court, drew the attention of the court after attaching a report published by The Daily Star with the headline "S Alam's Aladdin's lamp". High Court orders submission of list of top drug traffickers The HC also asked the Anti-Corruption Commission (ACC) to submit a report to Bangladesh Bank and Bangladesh Financial Intelligence Unit after inquiring into whether there is any money laundering issue or whether S Alam Group took permission from Bangladesh Bank. It also issued a rule asking the government to explain why the failure of the respondent to prevent the money laundering issue should not be declared illegal. The HC issued another rule asking the government to explain why directives should not be given to investigate the allegations against S Alam Group and why necessary steps should not be taken against the person and organisation involved in the incident. High Court orders investigation into alleged money laundering by Biopharma Barrister Syed Sayedul Haque Suman was present, while senior lawyer Khurshid Alam Khan stood for ACC and Deputy Attorney General Saifuddin Khaled represented the state. Earlier, on August 4, The Daily Star published a report titled "S Alam's Aladdin's lamp". According to the report, S Alam Group owner Mohammed Saiful Alam has built a business empire in Singapore worth at least about USD 1 billion, although there is no record of him taking permission from Bangladesh Bank to invest or transfer any funds abroad. The central bank has so far allowed 17 companies to invest outside the country, and the Chattogram-based business giant is not on that list, says the report. Yet in Singapore, Alam bought at least two hotels, two homes, one retail space, and other properties over the last one decade, all the while seeking to remove his name from the paper trails, it adds. High Court questions hike in price of performing hajj "As of January 10, 2023, the central bank has cleared roughly about USD 40.15 million to be invested abroad globally, a Bangladesh bank document shows. The figure is 10 times less than what Alam has spent just to buy two hotels and one retail space – worth over USD 411.8 million – in Singapore since 2009," the report says. "The Bangladesh Bank document also shows that just over USD 107,000 have so far been sent to Singapore legally by a number of companies, and none of them is owned by Alam," The Daily Star report says.

Bangladesh Bank has released a recruitment circular for the post of Assistant Director (AD). This time Bangladesh Bank will hire 100 Assistant Managers. Those who haven't applied yet, hurry up. The application period ends next Thursday (July 6). Qualifications required by candidates to apply to Bangladesh Bank: A four-year Bachelor (Honours) or Master's degree in any subject from a recognized university can apply for the post of Assistant Director (General). Must have first division/class or equivalent CGPA in at least two of SSC and above level examinations. No third category will be accepted at any stage. Candidates, whose results of post-graduation or four-year graduation examination have been published or will be published on or before July 6, can apply. Read more: 10 Ways You Can Improve Your English Pronunciation Bangladesh Bank Application Age Limit: Applicants should be between 21 to 30 years of age. However, in case of children of freedom fighters/martyred freedom fighters and disabled candidates, the maximum age limit is 32 years. Bangladesh Bank Assistant Director Pay Scale: Appointed persons will be given salary in the scale of Tk 22,000-53,060 as per National Pay Scale 2015 and other benefits as per bank rules. Bangladesh Bank recruitment process: According to the notification, the candidates have to participate in preliminary, written and oral examination. The pass number of preliminary examination will be decided by Bangladesh Bank. In this case, the decision of Bangladesh Bank will be final.  Visit this link (https://erecruitment.bb.org.bd/career/may302023_bb_18.pdf) for details about recruitment. Read more: DESCO Job Circular: 122 people will be recruited in 3 category positions

To address the present crisis on the economic front and ensure resilient, inclusive, and sustainable growth, the government of Bangladesh has adopted several reform initiatives to be implemented in the medium term (2025-26). The significant reform actions include: Revenue Mobilisation, Improved Expenditure Management, Monetary and External Sector Management, Financial Market Regulation and National Income Accounts, according to a budget document. The government has focused on reforms in tax policy and revenue administration. The plan is to mobilise additional tax revenue of about 1.7 percent of GDP by the end of FY 2025-26. Currently, the tax-to- GDP in the country is below ten percent. Read: Bangladesh’s economy has a dignified position now: PM Moreover, the government is focusing on untapped areas in the tax-revenue sector to enhance overall revenue while also emphasising non-tax revenue sources. The document states that fiscal management has become increasingly complex due to elevated and unpredictable inflation that has the potential to undermine the soundness of financial institutions and fiscal operations. The uncertainty surrounding prices, wages, and interest rates influence inflation through aggregate demand and expectations, which in turn posed challenges to fiscal planning and budgetary preparations. Read: 1st Circular Economy Summit in Dhaka on June 15 Besides rationalising the subsidies, there is a plan to bring down the cost of borrowing and bring efficiency in debt management, the document said. It said that the net National Savings Certificate (NSC) issuance is planned to be brought down to below 1⁄4 of total net domestic financing by FY26. The government plans to optimise cash management by expanding the coverage of the treasury single account (TSA) and the use of electronic funds transfer (EFT). Read: Govt to introduce circular economy to prevent plastic pollution: Minister    Several reform measures have been implemented including the reduction of interest rates of saving certificates, the introduction of tiered interest rates, capping issuances, and increasing taxes on earned interest, all aimed at reducing the government's interest expenditure. In FY 2021-22, the contribution from national savings certificates accounted for 0.5 percent of GDP, a decrease from 1.2 percent in FY 2020-21. Efficient cash management is also a priority to save public funds by minimising interest expenditure. To achieve this, the government is strengthening and expanding the Treasury Single Account (TSA), which is expected to facilitate better cash management, reduce interest expenses, and improve commitment controls. Read more: Increased import costs putting pressure on economy in many ways: Minister In the Monetary and External Sector Management segment, to improve monetary operations, Bangladesh Bank will adopt an interest rate corridor system. Furthermore, to increase exchange rate flexibility, Bangladesh Bank will use market-determined exchange rates for official foreign exchange transactions on behalf of the government. To strengthen the external sector balance and improve monetary sector performance, Bangladesh Bank is going to implement several reform initiatives in the medium term. Read more: Budget not based on IMF conditions: Finance Minister There will be reform activities to unify the multiple exchange rates and bring more discipline to the foreign exchange market. Bangladesh Bank will reverse the temporary margin increases for opening letters of credit on nonessential imports. The official budget document says that “With a view to establishing a risk-based banking supervision system, Bangladesh Bank will complete the pilot risk-based supervision action plan.” Read more: CPD dismisses budget's projections on growth, inflation, revenue collection Also, it mentions that to improve governance and discipline in the financial market, the government will amend the Bank Companies Act and Finance Companies Act in line with best practices. The amended Bank Companies Act was accordingly passed last week. For better transparency, Bangladesh Bank will publish banks' distressed assets in the annual financial stability report. Bangladesh Bureau of Statistics has taken the initiative to publish quarterly GDP for having a clear view of national income accounts. Read more: Doing our best to keep economy going amid global recession: PM Hasina

The Bridges Division on Monday (June 19, 2023) paid Tk 316.02 crore as third and fourth installments of the loan taken for construction of Padma Bridge. Bridges Division Secretary Manjur Hossain handed over a cheque of Tk 316,02,69,093 to the Senior Secretary of Finance Division around 10 am  in presence of Prime Minister Sheikh Hasina, said a press release of Road Transport and Bridges Ministry. Read: Repayment of Padma Bridge loan starts with Tk 316.91 crore given to govt Road Transport and Bridge Minister Obaidul Quader, cabinet members, secretary, principal secretary to the prime minister were also present at that time. With this, the Bridges Division paid a total of Tk 632,93,36,6142 to the government in installments. Read: Tk 660.24 cr toll collected from Padma Bridge till April 25: Quader Earlier on April 5, the Bridges Division began the repayment of the loan with Tk 316,90,97,049 from the revenue it earned as toll collection from the bridge. The loan was taken from Bangladesh Bank at a low interest rate under an agreement signed between the Finance Division and the Bangladesh Bridge Authority. Read: Padma Bridge Rail Link: 75% complete, on course for June 2024 handover In line with a revised agreement with the finance division on 26 July 2022, the Bangladesh Bridge Authority (BBA) will repay the loan in 35 years through 140 installments (four installments each year). The repayment will continue up to the fiscal year 2056-57. The authority collected tolls worth Tk 779,75,87,000 from the bridge till June 18,2023.