Economy
Dollar crisis to conclude by Jan 2023: Salman F Rahman
Adviser to the Prime Minister Sheikh Hasina on private industry & investment, Salman F Rahman said, the ongoing crisis in the country for US dollars will resolve by coming January.
“The sanctions on the import of non-essential goods have had a positive effect. Due to the lack of dollars, there have been issues opening LC for the last 60 days but we are surplus in the present account. But there are some issues with legacy payments, which will be over in December. Hence, the dollar issues will be conclude next January,” He said speaking as the guest of honor at the signing ceremony of a strategic partnership between ABG Limited and Chittagong Stock Exchange (CSE) at Radisson Blu Chittagong Bay View Hotel on Sunday, November 20.
ABG Limited – a concern of the Bashundhara Group, has purchased a 25 percent stake in CSE.
“Bashundhara is coming to the stock market, I was amazed to hear it at the beginning. Bashundhara Group chairman and I have met several times but he has not shown his willingness in the stock market. I am very astonished by this,” Salman F Rahman said.
“In 14 years Prime Minister Sheikh Hasina has brought the economy of Bangladesh to an unimaginable place. After coming out of jail at the end of 2008, if someone had said that the country would reach this height in the next 12-14 years, I would not have believed it myself. But Prime Minister Sheikh Hasina has shown that,” he added.
Salman F Rahman also said that there are two contradictions in the nation’s economy.
“The first contradiction is that the tax-to-GDP ratio is very low. According to the growth in the economy, the ratio of tax to GDP should increase, but it could not. Yet economic growth is taking place,” he added.
Another major contradiction is the capital market capitalization to GDP ratio, said, adding, “The major weakness of the capital market of Bangladesh is that there are few institutional investors. The whole market depends on retail investors. Brokerage houses, merchant banks and all the infrastructure are there but institutional investors are not coming. Because of that, I am encouraging companies like Bashundhara Group. Although Bashundhara Group’s emphasis on commodity exchanges, it will play a role in equity markets too.”
Salman F Rahman urged other institutional investors to invest in the market too.
He further said that the prime minister has been able to bring the nation to this place because of private-sector entrepreneurs.
During the eleventh month of the current fiscal year, the country’s foreign currency reserves have fallen below $19 billion for the first time. After paying off some import bills, the reserves have now stood at $18.26 billion on Sunday.
According to the International Monetary Fund (IMF), as of May 8, the total foreign currency reserves of the country were $19.82 billion.
Mohammad Mezbauul Haque, the spokesperson of Bangladesh Bank, informed that through the Asian Clearing Union (ACU), the central bank has paid off import bills totaling $1.63 billion over the past two months.
However, Bangladesh Bank maintains that after paying off the import bills, the foreign currency reserves now stand at $23.71 billion.
According to the Central Bank’s accounts, the reserves were $25.27 billion on May 8.
The Dhaka Stock Exchange (DSE) and the DSE Brokers Association (DBA) have expressed gratitude towards Prime Minister Sheikh Hasina for her directive to list government companies in the capital market, a move hailed as timely and positive.
The directive was issued during the recent meeting of the Executive Committee of the National Economic Council (Ecnec) last Thursday.
Dr. Hafiz Muhammad Hasan Babu, Chairman of DSE, described the directive as a significant step towards enhancing the dynamics of the capital market. He emphasized that besides invigorating the capital market, this move would also attract foreign investment and promote sustainable development.
Despite previous efforts, government institutions had not been listed in the stock exchange, according to a notification issued by the DSE. The Prime Minister’s directive is seen as a pivotal step towards revitalizing and expanding the economy.
Dr. Babu further remarked, “The listing of reputable companies in the capital market, as directed by the Prime Minister, will greatly benefit the country’s economy. It will also enhance investor confidence.”
Similarly, the DBA released a notification applauding the Prime Minister’s directive, terming it as positive and timely for the capital market.
Saiful Islam, President of DBA, expressed optimism about the directive’s potential to accelerate the country’s capital market and overall economy. He pledged support to relevant government departments and regulatory bodies in implementing the directive, ensuring its positive impact on the economy, including the capital market.
India has expressed interest in financing Bangladesh’s Teesta project, announced Foreign Minister Hasan Mahmud. Speaking to reporters after a meeting with Indian Foreign Secretary Vinay Mohan Kwatra, Mahmud stressed the importance of aligning the project with Bangladesh’s needs. He confirmed discussions on the Teesta issue during the meeting. Mahmud also affirmed Prime Minister Sheikh Hasina’s upcoming visit to New Delhi, indicating that the finalization of the date would depend on the formation of the new Indian government following ongoing elections.
Meanwhile, the IMF has approved a $1.15 billion staff-level loan for Bangladesh in its third tranche. Mahmud noted the ongoing elections in India and the subsequent formation of the new government as factors influencing the scheduling of PM Hasina’s visit.
When asked about the sequence of visits to India and China, Mahmud suggested Delhi’s geographical proximity to Bangladesh. Diplomatic sources suggest PM Hasina’s visit to India is planned for early July, following India’s elections.
Pre-election surveys indicate strong prospects for Indian Prime Minister Narendra Modi’s re-election. Modi previously congratulated PM Hasina on her electoral victory in January, expressing optimism about strengthening ties between the two nations.
The last bilateral engagement between the prime ministers occurred during the G-20 Leaders Summit in September 2023. Modi is expected to invite South Asian and BIMSTEC leaders to his swearing-in ceremony, fostering regional cooperation.
Addressing border killings, Mahmud emphasized the government’s commitment to ending such incidents and promoting the use of non-lethal weapons by border forces. Discussions also covered enhancing physical and people-to-people connectivity, including cooperation with India to import hydropower from Nepal and Bhutan through India. Mahmud highlighted the need to further ease visa restrictions to strengthen people-to-people relations.
