Weekly News Clippings (August 15, 2013)

Forex reserve hits record $16bn (Dhaka Tribune, August 15, 2013)

Bangladesh’s foreign exchange reserve has crossed $16bn for the first time in the country’s history due to export growth, strong remittance flow and falling import payments. This has turned Bangladesh into the second highest foreign currency reserve holder in South Asia, right behind India. “Bangladeshi expatriates are turning more to regular banking system to remit their earnings as the payment system has improved,” said Bangladesh Bank Governor Atiur Rahman. He also said that the $16.03bn reserve is enough to meet the country’s import payment for five and a half months.

Realtors slash apartment prices to rope in customers (The Daily Star, August 14, 2013)

The real estate industry is trying to revive itself by cutting down apartment prices.

“The apartment prices in Dhaka are around 25 percent cheaper now than three years ago,” said Toufiq M Seraj, managing director of a real estate company. Meanwhile, according to a latest Bangladesh Bank directive, commercial banks will not be able to spend more than 30 percent of their paid-up capital on real estate and are forbidden from buying any new property unless they bring down their portfolio to the new threshold, which suggests that apartment prices are likely to fall even further.

Dhaka seeks duty free access of 24 items to Bangkok (New Age, August 14, 2013) Dhaka has sought duty- and quota-free market access for its 24 selected products, mainly readymade garments, to Bangkok in a bid to boost export to Thailand and increase bilateral trade. According to the commerce ministry, Bangladesh has recently requested Thailand to allow such access of the products to its market. Among the 24 products, 13 are from woven and knitwear, three from jute and textiles, two each from electrical machinery and equipments, pharmaceuticals and raw hide. Thailand is the fourth largest trading partner of Bangladesh within the ASEAN countries.

BGMEA suspends services to 160 factories (The Daily Star, August 14, 2013)

The BGMEA has suspended ‘utilisation declaration’ (UD) certificates—mandatory export documents—of 160 of its members for not leaving adequate space on rooftops of the factories. Bangladesh Garment Manufacturers and Exporters Association stipulates at least 25 percent open space on a building’s rooftop to facilitate exit in cases of fire. The suspension of UD certificates means the BGMEA will not give these factories a vital export document. The move comes after the Obama administration put pressure on Bangladesh to improve factory conditions.

WB to provide $100m to upgrade state banks’ tech infrastructure (Dhaka Tribune, August 13, 2013) The World Bank has offered to give US$100m (Tk 8000m) to help upgrade technological infrastructure of the state-owned commercial banks – Sonali, Janata and Agrani. The mission pointed out the lack of technological infrastructure to support online banking by the state-owned commercial banks. The fund is likely to be provided as budget support for the current fiscal year and finalised immediately after a visit of the bank’s vice president for South Asia Philip Harran to Dhaka in October.

Tk 0.5m fine, 10-year jail for cheating in manpower export (The Financial Express, August 13, 2013)

The cabinet approved the draft of the Overseas Employment and Migration Workers Act- 2013 with the provision of maximum 10-year imprisonment and Tk 0.5 million fine for irregularities, cheating and forgery in manpower export by recruiting agencies. The existing law has the provision for punishment of one year imprisonment and a fine of Tk 5,000. The new law will also increase the punishment to minimum five years in jail and Tk 0.1million fine for any forgery and irregularities in manpower export by the recruiting agencies. And in the case of unauthorised and deceptive advertisements, the minimum punishment will be seven years in jail and a fine of Tk 0.5 million.

$ turns costlier in kerb market (The Financial Express, August 13, 2013)

The difference in US dollar prices between the kerb market and the scheduled banks has widened by Tk 3 to Tk 4 per dollar primarily because of purchase of dollars beyond permissible limits in recent times. Money market experts suspect that some people are transferring money abroad sensing an uncertain political situation in the months ahead. Lax monitoring of exchange houses by the central bank and flexibility shown by Customs officials at airports has helped locals carry foreign currency beyond permissible limits.

Biman faces cash crunch (The Daily Star, August 12, 2013)

Biman has failed to pays its dues to Padma Oil for aviation fuel which led to the oil company threatening to cut off the national flag carrier’s fuel supply. As of July 24, Biman owes Padma Oil Company Ltd, a subsidiary of Bangladesh Petroleum Corporation (BPC), a whopping Tk 724 crore. Padma in a recent letter to Biman said that the company may not be able to ensure smooth supply of fuel during the hajj flights when the demand for fuel rises. Padma issued the warning after Biman, which has been in the red for years, failed to keep its promise to pay fuel bills and the dues.

(No newspaper was published in Bangladesh on August 9, 10 and 11 due to the Eid holidays)