Economy
BB proclaims Tk 10k crore export facilitation fund
BB: Bangladesh Bank on Sunday ( 1 January) rolled out an export facilitation fund of Tk 10,000 crore in order to help exporters gear up their businesses.
An exporter will be allowed to take a loan of a maximum of Tk 200 crore from the fund, which is a pre-finance scheme by nature.
Under the pre-finance scheme, the central bank finances businesses through banks in response to their applications.
Exporters will have to use the fund to import raw materials.
Banks will avail the fund at an interest rate of 1.5 percent from the central bank. The end users will pay 4 percent to avail the fund from banks, according to a Bangladesh Bank reports.
The BB said the fund would help exporters to tackle challenges in external trade stemming from its journey towards becoming a developing nation from a least developed one.
In addition, it will also help exporters address the challenges of emancipating from the ongoing Russia-Ukraine war.
Lenders will have to repay the fund within six months. But they can extend or reduce the repayment tenure for clients.
If any exporter fails to repatriate the worth of the exported goods on time due to any unexpected situation, the central bank will extend the repayment facility for another three months on a case-to-case basis.
Clients will not be allowed to enjoy new funds from the scheme if they have overdue export bills.
The central bank, however, said banks would be able to enjoy new funds from the scheme if they failed to repatriate their export bills on time for unforeseen reasons.
In such a situation, exporters will have to repay at least 50 percent of their overdue payments before availing the loan facility.
Clients already enjoying loans from other funds of the central bank to import raw materials will not be allowed to take loans from the central bank’s scheme.
Members of the Bangladesh Garment Manufacturers and Exporters Association, Bangladesh Textile Mills Association, Bangladesh Knitwear Manufacturers and Exporters Association, and B and C types industries of the export processing zones (EPZs) will be eligible to avail the fund.
There are three types of companies in the EPZs, namely A, B, and C.
Joint venture companies with foreign and Bangladeshi ownerships are treated as type B and those with 100 percent Bangladeshi ownerships as type C.
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.
