Economy
Tk 15k Crore Govt Loan from Banks
Prior this year, the government refunded more than what it had borrowed from the banks. as of sudden, the government has raised borrowing from the banking sector. In the previous month, the government has taken a loan of Tk 13 thousand 481 crores from the banking sector.
According to the sources of Bangladesh Bank (BB), in late September, the government’s net debt from banks increased by 12 thousand 526 crores to 2 lakh 82 thousand 712 crores. A month ago at the end of August, the amount of this loan was 2 lakh 69 thousand 230 crores. That is, in one month the government took a loan from the bank of 13 thousand 418 crores.
But the government’s debt is now towards the central bank. Increased demand for loans from central banks rather than borrowing from commercial banks. In the 3 months of the current financial year, the government has taken a loan of Tk 16,833 crore from the central bank. At the same time, the government’s debt to commercial banks decreased by Tk 4,307 crore. As a result, the government’s net debt has increased by Tk 12,526 crore.
Regarding the increase in debt, the former caretaker government’s financial advisor economist AB Mirza Azizul Islam told that the government’s expenditure has increased. As the income is less than the expenditure, now they are borrowing from the bank to meet the demand for additional money. However, the amount of bank loans taken by the government in 3 months is not more than their target. So there is no reason to worry about this loan.
After reviewing the data of Bangladesh Bank, it was found that in the first 2 months of the current (2022-23) financial year, the government did not take debts from the banking sector but instead paid them. In the two months till last August, the government’s net debt from banks decreased by Tk 955 crore to Tk 2 lakh 69 thousand 230 crores. Although at the end of June, the amount was 2 lakh 70 thousand 185 crores.
The government is setting a target that the bank will take a bank loan of Tk 1 lakh 6 thousand 334 crore to meet the budget deficit of the current fiscal year 2022-23. This amount is 29 thousand 882 crores more than the target for the current financial year. In the budget of the previous financial year, the target was to borrow 76 thousand 452 crores from the banking system. It has set a target of taking a loan of 35 thousand crore takas from savings accounts in the current financial year.
According to the data of the National Savings Directorate, savings bonds worth Tk 14,538 crore have been deposited or sold in the first 2 months (July-August) of the current fiscal year 2022-23. Out of this, principal and profit have been paid to the tune of 14 thousand 136 crores. After paying the principal and profit of savings bonds, the government’s net debt in this sector stands at Tk 401 crore.
In the meantime, regardless the fall in foreign exchange reserves, the central bank increased dollar sales. Bangladesh Bank is selling dollars to banks at Tk 97. Last Thursday sold 13 million dollars to several banks. In total, the sales volume of the current financial year so far has stood at 4 billion dollars. Against this, as much as 38 thousand crore takas have come out of the market. Last financial year 762 million 17 million dollars were sold. Thus, as a result of the sale of dollars, the foreign exchange reserves, which rose above 48 billion dollars, fell to 36 billion dollars.
It is known that due to various reasons including the instability of the food and energy markets due to the impact of the Russia-Ukraine war, the government aimed more at cost reduction in the beginning. Hence, the 1st month of the financial year also saw good growth in revenue and foreign grants and loans increased. Due to the effect of these two, the government has taken fewer loans from the bank. But now some projects have started. Again, due to the effect of the Russia-Ukraine war, food and fuel prices have increased in the world market. As a result, the government has to spend more money on food and fuel imports than before. However, the rate at which the cost of money has increased, the income does not increase at that rate and the bank has to take a loan. So the government is leaning on bank loans.
Prime Minister Sheikh Hasina today (25 April) called for speaking out against all forms of aggression and atrocities, and say ‘no’ to wars.
“We must speak out against all forms of aggression and atrocities, and say ‘no’ to wars,” she said adding that Bangladesh supports the UN Secretary General’s ‘New Agenda for Peace.
The prime minister was addressing the 80th Session of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) held at the ESCAP Hall (2nd floor), United Nations Conference Center (UNCC) here.
She arrived in Bangkok on Wednesday on a six-day official visit to Thailand.
The PM said the pre-condition for sustainable development is lasting peace and security.
“We must settle regional disputes and tension through dialogue. Our mutual respect for national sovereignty and territorial integrity must remain paramount,” she said.
Hasina called upon the Asia-Pacific region, especially ASEAN, to redouble their efforts to end Rohingya crisis as all efforts at regional connectivity, integration, and prosperity will continue to be marked by a missing puzzle without it.
“The origin of their crisis has been in Myanmar, and its solution also lies in Myanmar,” she declared.
“As long as that solution remains out of reach, all our efforts at regional connectivity, integration, and prosperity will continue to be marked by a missing puzzle. Let us redouble our efforts to put that puzzle back in place,” she said.
She said that in August 2017, when thousands of Rohingya men, women, and children from Myanmar fled to Bangladesh, Bangladesh offered them temporary shelter.
“With an ever growing population, this has now become one of the largest humanitarian situations in the world,” she said.
Sheikh Hasina said that In the backdrop of ongoing armed conflicts in Myanmar, the Rohingya repatriation process is also getting delayed.
“This is creating serious security risks within and beyond our territories,” she said.
She called upon the Asia-Pacific region, especially ASEAN, to play a proactive role in resolving the volatile situation in Myanmar.
“We must ensure that the Rohingya can go back home in safety and dignity at the earliest possible,” she said.
The prime minister said that the Asia-Pacific region must stand united against its common enemies of poverty and hunger.
She said Bangladesh has reduced poverty from 41.51 percent to 18.7 percent between 2006 and 2022.
It also reduced extreme poverty from 25.1 to 5.6 percent during the same period.
“We remain confident about eradicating extreme poverty by 2030,” she said.
She mentioned that Bangladesh has made notable progress on food security, with focused interventions on maternal and child nutrition.
“Our current priority is to address inequalities through income distribution, asset ownership, and social protection,” she said.
The prime minister said that Asia-Pacific region must put up a united front in tackling the climate crisis, biodiversity loss, and transboundary pollution.
“We need to push for ambitious climate financing goals beyond 2025 at COP-29. We need to cooperate on cross-border water management and air quality improvement. We must all prepare for growing extreme weather events,” she said.
In this connection, she suggested looking into Bangladesh’s experience in disaster risk reduction.
“We appreciate UN-ESCAP’s support in improving our early warning capabilities,” she added.
Briefly describing various development programmes and achievements of her govebrment, the prime minister said that much of the development gains are affected by climate impacts.
“As a low-lying delta, Bangladesh has no option but to invest heavily in climate resilience,” she said.
She mentioned that Bangladesh is already recognised as a global leader in climate adaptation.
“We are happy to share our traditional and innovative solutions with other vulnerable countries,” she said.
She said that Bangladesh has urged developed and emerging economies in the region to raise their time-bound emission reduction targets.
“For economies in transition, it is important to have a just energy transition.”
In Bangladesh, she said, “we are working on long-term energy security with a sound mix of clean and renewable energy.”
“We shall continue to do our part in pursuing a circular and low-carbon economic growth pathway.”
She underscored the need for increased and easy access to financing and technology from both the public and private sectors.
“I invite UN-ESCAP to help build the capacity of climate-vulnerable countries to mobilise adequate international climate financing.”
PM Hasina said that Bangladesh now provides critical links to the Trans-Asian Highway and Railway networks.
“Our physical and digital infrastructures are being developed to foster regional trade and connectivity.”
She said Bangladesh offers access to the Bay of Bengal for land-locked territories in its neighbourhood.
“We stand ready to work together with all regional partners through mutual understanding and cooperation,” said the prime minister.
Bangladesh and Qatar signed 10 cooperation documents on Tuesday, including five agreements and five MoUs, aimed at strengthening ties and elevating relations to new heights.
Prime Minister Sheikh Hasina and Qatar’s Emir Sheikh Tamim bin Hamad Al Thani witnessed the signing of the documents.
The five agreements cover cooperation in the legal field, promotion and protection of mutual investments, avoidance of double taxation, maritime transport, and the establishment of a Joint Business Council (JBC) between FBCCI & QCCI.
The five MoUs include cooperation in sports and youth, manpower employment (Labour), diplomatic training, education, higher education, scientific research, and between Qatar Ports management Company “MAWANI QATAR” and Chittagong Ports Authority.
Earlier in the morning, PM Hasina warmly welcomed and received Emir Sheikh Tamim at her office.
They had a tête-à-tête meeting at the Prime Minister’s Office, followed by a bilateral meeting.
After signing the visitors’ book, the emir headed for Bangabhaban where the president received him.
A high-level Qatari delegation led by Qatar’s emir is on a state visit to Bangladesh at the invitation of the president and the prime minister.
During the ceremony, a road and a park in Dhaka were named after Emir of Qatar Sheikh Tamim Bin Hamad Al Thani.
The park, constructed in Kalshi area of Mirpur under Dhaka North City Corporation, and the road from Mirpur ECB point to Kalsi Fly Over were named after Emir of Qatar.
Now, the road and park are known as Sheikh Tamim Bin Hamad Al Thani Avenue and Sheikh Tamim Bin Hamad Al Thani Park.
The Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) is urging for greater involvement of marginal, small, and medium enterprises in international trade fairs. This initiative aims to spotlight Bangladesh’s promising products on the global market.
FBCCI President Mahbubul Alam made the call during the first meeting of the organisation’s Standing Committee on National and International Trade Fairs and Foreign Delegations. He emphasised the need to provide marginal, small, and medium enterprises with the space and resources to effectively display their products at these events.
“The participation of marginal, small, and medium enterprises is crucial at both national and international levels,” Mahbubul Alam said. “This will allow us to export Bangladesh’s promising products and open new markets.”
The FBCCI president informed that his organisation is actively discussing and collaborating with the government to make this a reality. He also proposed organising roadshows in neighbouring countries and Europe to revive the country’s handicraft industry and increase export opportunities for these products.
Standing Committee Chairman Nuruzzaman echoed Mahbubul Alam’s sentiments, highlighting Bangladesh’s vast potential and young population. “We need to move beyond the garment sector and focus on product diversification and market creation,” Nuruzzaman said.
Achieving this, he acknowledged, will require close collaboration with the Export Promotion Bureau, Ministry of Foreign Affairs, and Bangladesh Investment Development Authority.
FBCCI Senior Vice President Md Amin Helaly pledged the organisation’s support in facilitating increased exports through participation in foreign trade fairs. He stressed, however, the importance of raising awareness among Bangladeshis about the country’s diverse and promising products.
The meeting concluded with an open discussion where participants expressed keen interest in organising and participating in various sectoral fairs, both domestically and internationally, under the FBCCI’s umbrella.
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