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Remittance and foreign currency reserves of Bangladesh


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Remittance hits $1.64 billion in January

Mehedi Hasan
 Published at 10:13 pm February 2nd, 2020

Remittance inflow increased by 21.45% to $11.04 billion in July-January period of the current fiscal year compared to the same period of last fiscal yea

Expatriate Bangladeshis sent $1.64 billion in remittance last month, up by 2.56% than the corresponding month of the previous year. 

Remittance inflow increased by 21.45% to $11.04 billion in July-January period of the current fiscal year compared to the same period of last fiscal year, according to data of Bangladesh Bank. 

Bankers said that the favorable exchange rate of taka against the dollar and a strong stance taken by the central bank to fight illegal money transfers had a positive impact on the increasing trend of remittance. 

On February 2 this year, the inter-bank exchange rate stood at Tk84.95, up from Tk83.95 a year earlier, according to the central bank data. 

The central bank has attributed the sharp rise in remittance to the government’s 2% cash incentive introduced in the current fiscal year.

“The flow of remittance into the country has shown an upward trend in the fiscal 2019-20 as the government has taken measures, including two percent cash incentive, to encourage legal channel for encouraging non-resident Bangladeshis to send money to their home country,” said the central bank’s spokesperson Md Serajul Islam.

He said the recent flow of remittance indicated that it was gradually increasing and this trend was likely to continue in the upcoming months.

In the current budget, the government offered a 2% incentive on money remitted through banks by Bangladeshi diasporas.

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Travellers can bring $10,000 without declaration: BB

STAFF REPORTER, Dhaka
Bangladesh Bank (BB) has doubled the limit of foreign currency to US$10,000 or its equivalent that travellers can bring into the country without declaration to the customs authority.

Earlier, Bangladesh Bank allowed incoming passengers to bring $5,000 or its equivalent without declaration to the customs authorities.

“Bangladesh Bank has enhanced the limit to $10,000 or its equivalent from $5,000 or its equivalent,” said a BB circular issued in the capital yesterday.

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Forex reserves hit $35 billion mark for the first time

Bangladesh Bank’s foreign currency reserves hit $35 billion mark for the first time in history thanks to surging remittance despite the coronavirus pandemic.

Satisfactory remittance inflow and disbursement of aid by the developing partners drove the foreign exchange reserves up, Bangladesh Bank sources said.

According to the central bank, the country's foreign exchange reserves rose to $35 billion on June 23. On June 3, the reserve crossed $34 billion mark for the first time.

According to the Bangladesh Bank data, from July 1, 2019 to June 10, 2020, the expatriates sent $17.06 billion, thanks to the government budget declaration of 2 percent incentive.

In 2018-19 fiscal year, the country received $16.41 billion remittance and the figure was $14.98 billion in 2017-18. For the first time, the country's remittance inflow crossed $17 billion mark in a fiscal year despite a recent fall for the Covid-19 pandemic.

Currently, there are over 10.02 million Bangladeshis working in 174 countries across the world. In 2019-20, Prime Minister Sheikh Hasina announced 2 percent incentive on money remitted by the expatriate Bangladeshis.

The objectives were to mitigate the burden of increased expenses in sending foreign remittance through legal channels.

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https://www.dhakatribune.com/business/2021/07/31/lower-yield-on-bank-deposits-remittance-boost-savings-certificate-sales

Lower yield on bank deposits, remittance boost savings certificate sales

 Meraj Mavis

 Published at 08:47 pm July 31st, 2021

The net sales of savings certificates in FY21 was Tk37,386 crore, almost three times more than the previous 2019-20 fiscal

After a lukewarm performance in FY2019-20, savings certificates was the go-to option for all sorts of investors as Tk37,386 crore worth of certificates were sold in the first 11 months of FY2020-21, more than double from the same period of the previous fiscal.

According to the Directorate of Nationals Savings (DNS), the primary net target for selling savings certificates was Tk20,000, but this was raised to Tk30,302 crore as the revised target.

DNS figures also showed that the net sales of savings certificates was Tk37,386 crore, which is almost three times more than the net sales of Tk 14,424 crore in the previous 2019-20 fiscal year.

The total sales of Tk99,557 crore, after being accumulated with the June figure of FY21, is slated to surpass the previous record of Tk90,342 crore in FY19.

A total profit of Tk30,305 crore has been paid to the customers of the savings certificates from the state treasury in FY21.

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Data analysis shows that from July 2019, taxpayers' identification number (TIN) certificate was made mandatory for purchase over Tk1 lakh, while a 5% source tax on profits of the savings certificates was also introduced.

If the investment was more than Tk10 lakh, the source tax became 10%. Having a bank account was also made mandatory.

After that, the sales of savings certificates began to decrease.

However, the minimum bar for purchase with a TIN certificate has been raised from Tk1 lakh to Tk2 lakh in the current FY22.

AB Mirza Azizul Islam, economist and financial adviser to the former caretaker government, attributes this beyond-significant jump to the low interest rates offered by the banks, as well as increased remittance figures and the economic turnaround from the Covid-19 pandemic so far.

Speaking to Dhaka Tribune, he said that amid the pandemic, savings certificates provide a better investment option than bank deposits.

"Our banks implement an interest rate of 6% on savings accounts, which is actually a little over 5%. It is also logical that the record remittance figures spur people to put their money on something viable in the long run, as a significant part of the population invest their hard-earned money on savings certificates, as it still provides viable profits to run their families," he also said.

However, there still remains a level of disparity as ordinary investors receive a certain interest on savings certificates, while ministers, MPs and other VIPs receive higher interest. The government should address this disparity to boost more sales, the economist added.

According to Bangladesh Bank's latest data, Remittance inflows hit a record high of $24.77 billion in the fiscal year 2020-21.

Expatriate Bangladeshis sent 36% more remittance in FY2020-21 compared to the same period in the previous fiscal, when it was $18.20 billion.

In addition, at present, there are four types of savings certificates in circulation in the country.

Among them, the profit rate of family savings certificates is 11.52%, the interest rate of five-year Bangladesh savings certificates is 11.28%, the profit rate of three-month profit-based savings certificates is 11.4% and the profit rate of pensioner savings certificates is 11.76%.

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https://www.newagebd.net/article/145419/finance-minister-dismisses-extra-1pc-cash-incentive-for-remittance

Finance minister dismisses extra 1pc cash incentive for remittance

Staff Correspondent | Published: 18:36, Aug 04,2021 | Updated: 18:38, Aug 04,2021

Finance minister AHM Mustafa Kamal on Wednesday dismissed another 1 per cent incentive against the inflow of remittance.

He said that the current 2 per cent cash incentive against the inflow of remittance was good enough while answering a question on extra one per cent incentive planned by the Bangladesh Bank.

The minister was talking to reporters virtually after presiding over meetings of the Cabinet Committee on Economic Affairs and Government Purchases.

The government has been giving 2 per cent cash incentive for remittance since 2019-20 fiscal year. The inflow of remittance hit a record high of $24.77 billion in the 2020-21 FY.

But the inflow of remittance fell to a five-month low in July, 2021, at $1.87 billion which is 28 per cent lower than July of the previous financial year.

The country’s exports also declined by 11.19 per cent in the same month.

Mustafa Kamal blamed the restrictions throughout July in the wake of fresh upsurge in the number of Covid infected patients and deaths for the poor inflow of remittance and export incomes.

He laid emphasis on success of the on-going vaccination programme for proper economic recovery in the remaining part of the financial year.

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https://www.dhakatribune.com/business/2021/08/11/kamal-thanks-expatriate-workers-for-sending-remittance

Finance minister thanks expatriate workers for sending remittance

 BSS

 Published at 07:35 pm August 11th, 2021

Refutes Dr Debapriya's remark of 'remittance magic coming to an end'

Finance Minister AHM Mustafa Kamal on Wednesday thanked the expatriate Bangladeshi workers who are playing a piovital role towards the development of Bangladesh through sending their hard-earned remittance to their beloved motherland.

"The expatriate workers engaged in business and other jobs in abroad are sending their earned remittance to our country being imbued with patriotism. I thank them and express my gratitude to them while the countrymen would never forget their contributions," he also said.

The Finance Minister said this while responding to a question after chairing two separate meetings on the Cabinet Committee on Economic Affairs (CCEA) and the Cabinet Committee on Government Purchase (CCGP).

Responding to a question on the recent comment from a leading economist that the "magic of remittance may come to an end", Kamal said, "Remittance is not a magic. The flow of remittance will never come to an end."

Earlier on Sunday, Debapriya Bhattacharya, a distinguished fellow of the Centre for Policy Dialogue (CPD), said the first month of the new fiscal year 2021-22 showed that remittances had sunk 28%, hence the magic weaved by remittance all these years for Bangladesh may be over soon.

Debapriya made the remarks during a media briefing organized by the Citizen's Platform for SDGs, Bangladesh where a report titled 'Delivery of the National Budget 2021- in the Context of the Pandemic, Ensuring Interests of the Disadvantaged People' was published.

In this connection, the Finance Minister alleged that a vested quarter has been advocating against the incentive on sending remittance when it was introduced back in 2019 as they then had commented that the high remittance flow was temporary and it would not be sustainable.

Highlighting some figures of remittance inflow, Kamal said that before the incentive was introduced on remittance, the inward remittance flow in FY19 totaled $13.1 billion, but it soon got momentum with the introduction of incentive totaling the inward remittance flow at $18.2 billion in FY20 and thus making a jump to make $24.78 billion in FY21.

"But, they (critics) will say that much more remittances have come and it was not right," he said adding that the interested workers are still going abroad despite the pandemic availing various facilities extended by the government.

The Finance Minister said more Bangladeshi workers would go abroad once the COVID-19 situation comes to normalcy worldwide.

He cited that the country got $567 million remittances from August 1-9 this month compared to $450 million fetched on August 1-9 last year. "Still growth in remittance is there. So, I'm doubtful about the patriotism of those who say that the time of remittance has come to an end."

Replying to another question about the attainment of projected GDP growth target in the current fiscal year (FY22), the Finance Minister expressed his optimism about the attainment despite the pandemic.

He said although the provisional estimation of GDP growth for the FY20 was 5.24%, but it came down at 3.51% in the final estimation, even though it was the highest attainment in Asia.

Extending his heartfelt thanks and gratitude to the countrymen for such feat, Kamal said many countries of the world suffered negative growth during that fiscal year. "In overall consideration, our position was at the top in Asia," he added.

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https://www.tbsnews.net/economy/outbound-investments-5-forex-reserve-cards-289750

Abul Kashem

17 August, 2021, 10:40 pm

Last modified: 17 August, 2021, 10:46 pm

Outbound investments up to 5% of forex reserve on cards

According to a draft overseas investment guideline, the govt will allow local companies, SMEs and NGOs with outbound investments to enlist in foreign stock markets

The government is set to provide outbound investment opportunities to local exporters and any company running their business in the domestic market for 10 years.

This opportunity will be extended to small and medium enterprises interested in establishing backward and forward linkage industries, along with NGOs with a reputation for working towards society's betterment and improving people's quality of life in Bangladesh.

The government will allow local companies with outbound investments to enlist in foreign stock markets too. However, Bangladesh's total outbound investment in a single fiscal year will not exceed 5% of the central bank's foreign exchange reserves for that particular fiscal year.

After finalising the "Overseas Investment Guideline 2021" with such provisions and more, the Bangladesh Investment Development Authority (Bida) will submit it to the Prime Minister's Office (PMO) for approval, said Bida Executive Chairman Md Sirazul Islam.

The guideline will come into effect following the final approval at the cabinet meeting, he added while responding to The Business Standard through WhatsApp from the USA.

According to the draft guideline, exporters will be able to make outbound investments reaching up to 25% of their average exports in the past five years. Other companies and NGOs will be able to invest up to 25% of their net assets – per their latest audited balance sheet.

Companies seeking to invest more than these amounts can apply for the opportunity along with a proper rationale behind their decision. If needed, the Bangladesh government will allow such companies to make outbound investments against bank guarantees.

Providing more details, Sirazul said, "The guideline is a very important and sensitive document. That is why we are consulting as many stakeholders as possible before finalising it from our end.

"Once it is approved, I think it will meet a long-standing demand of the private sector entrepreneurs, and it will definitely help build a brighter image of Bangladesh in the international arena."

He continued, "The guideline is still under process. Bida may be able to finalise it soon, but it has to go through several other processes. We will send it to the PMO. After scrutiny, the PMO will hold an inter-ministerial meeting to discuss and finalise this guideline.

"It will then be sent to the Cabinet Division for further discussion and approval. While going through this process, the guideline might witness changes, refinement and reorganisation. If the cabinet approves, the guideline will be published in a government gazette."

What are the conditions?

Addressing the criteria for eligibility, the guideline's third amended draft says a company interested in making outbound investments must possess $5 million worth of net assets – reflected by their audited balance sheets in the last five years.

The government will consider providing SMEs with the same opportunity based on solvency certificates provided by banks.

A company seeking to invest overseas in a particular sector must have at least three years of business or manufacturing experience in that field, and of the three years, at least two must be profitable. This rule will be relaxed for ICT entrepreneurs.

Companies with unpaid taxes, import costs, and defaulted loans will not be allowed to invest overseas. The regulators will also take legal action under the money laundering prevention act against any company found to be wasting funds in the name of outbound investment.

The draft says an inter-ministerial committee – headed by the Bida executive chairman – will be formed to review outbound investment proposals and submit recommendations to the Bangladesh Bank for final approval.

However, overseas investments up to $1 million will not require the committee's recommendation.

Organisations approved for investing overseas will be able to take out loans from their mother companies, Bangladeshi banks, or from any commercial banks in the countries they are investing in.

During the initial phase, these organisations will be allowed to operate under the 70:30 debt-to-capital ratio. They will also be able to provide corporate, personal or any other property located in Bangladesh as a guarantee to finance their overseas projects.

No concrete guidelines exist now

Responding to a query, several officials from the Bangladesh Bank and Bida said the country presently has no concrete guidelines regarding Bangladeshi companies' outbound investments.

Interested organisations presently apply to the central bank for permission. The Cabinet Committee on Economic Affairs – led by Finance Minister AHM Mustafa Kamal – reviews these applications and gives recommendations to the regulator for approval.

Bangladesh, for the first time in 2013, permitted Mobil-Jamuna Group to invest $5.10 million overseas. Since then, a few more companies such as the DBL Group, Beximco Pharma, Square Pharmaceuticals and Akij Group have received the opportunity to invest overseas.

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https://www.tbsnews.net/economy/forex-reserves-cross-record-48-billion-mark-292702

TBS Report

24 August, 2021, 10:45 pm

Last modified: 24 August, 2021, 10:48 pm

Forex reserves cross record $48 billion mark

 

The country's foreign exchange reserves witnessed a new record crossing the $48 billion mark following the $1.45 billion financial assistance from the International Monetary Fund (IMF).

In addition to remittances sent by expatriates, the IMF aid mainly contributed to the surge in forex reserves.

Foreign exchange reserves in Bangladesh have reached new heights due to the positive trend of remittances sent by expatriates and the addition of loan assistance from the IMF, said a Bangladesh Bank official.

By international standards, a country has to have reserves equal to three months of import expenditure. With the amount of reserves that Bangladesh has now, it is possible to pay the import cost for more than 8 months at the rate of $6 billion per month.

The reserve crossed the $46 billion-mark on 28 June while $45.01 billion-mark on 3 May and crossed the $44 billion mark on 24 February this year and touched the $40 billion-mark on October 28 last year.

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https://thefinancialexpress.com.bd/economy/bangladesh/sri-lanka-set-to-get-another-100m-from-bangladesh-under-swap-arrangement-1630290778

Sri Lanka set to get another $100m from Bangladesh under swap arrangement

 SIDDIQUE ISLAM | Published:  August 30, 2021 08:32:59

Bangladesh is set to send US$100 million more to Sri Lanka today (Monday) to help the island nation in minimising foreign-exchange crunch on their economy, officials said.

The fund from Bangladesh has been provided under the currency-swap agreement signed by the Bangladesh Bank (BB) and the Central Bank of Sri Lanka (CBSL) on August 03.

Earlier on August 18, the BB transferred $50 million to the CBSL in the first installment under the currency-swap deal initiated in March this calendar year.

As per the agreement, the central bank of Bangladesh will transfer $50 million more shortly to its counterpart of Sri Lanka if the CBSL sends a request to the BB within five working days after receiving the second tranche of the aid, according to the officials.

"We're hopeful that the CBSL would send a request within the stipulated timeframe seeking a third instalment of the agreement," a BB senior official told the FE Sunday.

Under the deal, the central bank of Bangladesh will provide a total of $200 million to help prop up the island nation's fast-depleting foreign reserves and ease pressure on its exchange rate.

The decision on the currency swap was set in motion during Sri Lankan Prime Minister Mahinda Rajapaksa's visit to Bangladesh in March 2021.

As per the agreement, the CBSL will have to deposit an equivalent amount of its currency with the BB's account which has already been opened in the SAARC-member country.

"We're providing the funds under currency swap-agreement aiming to help a friendly SAARC-member country which is in trouble," another BB official told the FE.

He also said it is the first currency swap outside the Asian Clearing Union (ACU) mechanism.

The ACU is an arrangement involving Bangladesh, Bhutan, India, Iran, Myanmar, Nepal, Pakistan, Sri Lanka, and the Maldives, through which intraregional transactions among the participating central banks are settled on a multilateral basis.

The central bank of Bangladesh has given the first tranche for all the instalments for three months, according to the central banker.

If the CBSL fails to repay the loan by the deadline, it will get three more months to repay. If it fails to pay back again, it will be given three more months.

The CBSL will return the amount in three months at the interest rate of the London Interbank Offered Rate (LIBOR) plus 2.0 per cent. If it can't honour the deadline, the interest rate will not change.

But if the tenure goes up to six months, the interest rate will be LIBOR plus 2.5 per cent.

LIBOR is a benchmark interest rate at which major global banks lend to one another on the international inter-bank market for short-term loans.

Striking a balance between supporting the economy amid Covid-19 and ensuring fiscal sustainability remains a key challenge for Sri Lanka, according to the World Bank.

"Public and publicly guaranteed debt is estimated to have increased to 109.7 per cent of GDP. Reserves declined to an 11-year low in February 2021, and the exchange rate depreciated by 6.5 per cent from January through March 17, 2021," the World Bank said in a statement on April 09.

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https://bangla.dhakatribune.com/economy/2021/09/01/39028

আগস্টে ১৮১ কোটি ডলার রেমিট্যান্স এসেছে

 ট্রিবিউন ডেস্ক

 প্রকাশিত ০৬:৪৩ সন্ধ্যা সেপ্টেম্বর ১, ২০২১

গত বছরের আগস্ট মাসে রেমিট্যান্স এসেছিল ১৯৬ কোটি মার্কিন ডলার

আগস্ট মাসে প্রবাসীরা ১৮১ কোটি মার্কিন ডলারের রেমিট্যান্স পাঠিয়েছেন। বুধবার (১ সেপ্টেম্বর) কেন্দ্রীয় ব্যাংকের হালনাগাদ প্রতিবেদনে এ তথ্য তুলে ধরা হয়েছে। গত বছরের আগস্ট মাসে রেমিট্যান্স এসেছিল ১৯৬ কোটি মার্কিন ডলার।

বাংলাদেশ ব্যাংকের তথ্য বলছে, গত জুলাইয় ও আগস্ট— এই দুই মাসে প্রবাসীরা  রেমিট্যান্স পাঠিয়েছেন ৩৬৮ কোটি ২০ লাখ ডলার। আগের বছরের একই সময়ে প্রবাসীরা পাঠিয়েছিলেন ৪৫৬ কোটি ২০ লাখ ডলার।

কেন্দ্রীয় ব্যাংকের তথ্য অনুযায়ী, আগস্ট মাসে রাষ্ট্রায়ত্ত ব্যাংকগুলোর মাধ্যমে রেমিট্যান্স আহরিত হয়েছে ৩৯ কোটি ৫৪ লাখ ডলার। বিশেষায়িত দুটি ব্যাংকের মাধ্যমে ৩ কোটি ৪২ লাখ ডলার রেমিট্যান্স এসেছে। এছাড়া বেসরকারি ব্যাংকগুলোর মাধ্যমে ১৩৭ কোটি ৩১ লাখ ডলার এবং বিদেশি ব্যাংকগুলোর মাধ্যমে ৭৪ লাখ ডলার রেমিট্যান্স এসেছে।

বেসরকারি ব্যাংকগুলোর মধ্যে আগ‌স্টে ইসলামী ব্যাংকের মাধ্যমে রেমিট্যান্স আহরিত হয়েছে ৫০ কোটি ৮৯ লাখ মার্কিন ডলার। এছাড়া ডাচ-বাংলা ব্যাংকে এসেছে ১৮ কোটি ৮০ লাখ ডলার রেমিট্যান্স। অগ্রণী ব্যাংকের মাধ্যমে ১৬ কোটি ২৫ লাখ ডলার, সোনালী ব্যাংকের মাধ্যমে ১১ কোটি ডলার এবং জনতার মাধ্যমে সা‌ড়ে ৬ কোটি ডলার রেমিট্যান্স আহরিত হয়েছে।

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https://tbsnews.net/economy/banking/sri-lanka-so-far-got-150m-bangladesh-301156#.YTzXL_2y2Wg.facebook

TBS Report

11 September, 2021, 10:15 pm

Last modified: 11 September, 2021, 10:19 pm

Sri Lanka so far got $150m from Bangladesh 

The rest of the amount promised under the $250 million currency swap agreement will be released on demand of Sri Lanka, said a senior executive of the Bangladesh Bank

 

When Sri Lanka is going through an economic emergency amid a serious scarcity of foreign reserves, the Bangladesh Bank has continued to provide the island nation with liquidity support under a currency swap deal.

The Bangladesh Bank has so far lent $150 million to debt-strapped Sri Lanka in two instalments. In the second instalment, $100 million was released on 30 August this year while another $50 million was transferred earlier the same month.

The rest of the amount promised under the $250 million currency swap agreement will be released on demand of Sri Lanka, said a senior executive of the Bangladesh Bank. 

Currently, China along with Bangladesh are providing liquidity support through currency swap deals. 

However, the foreign reserve of Sri Lanka continued to deteriorate, compelling the country to announce an economic emergency recently. 

After meeting a $1 billion debt repayment in July from reserves, the Sri Lankan government had only enough dollars to cover less than two months of imports.

The spiraling crisis in Sri Lanka raised the risk for Bangladesh about getting back its loan.

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