Bangladesh becomes a lender for first time

[EasyNow]

What is SL position in Royingya case ?

It would be pointless for us to hold a grudge against SL over their past - once we become useful neighbours we can have a bigger say.

It's a $200 million fund to be released by BB over one year and have to be paid back by SL within 3 months at a 2% interest rate.
Hardly any help. Wonder why we are being such dicks over $200 million.
Even the US does not attach such strings. Worst case we lose $200 million out of $44 billion. Big deal!

From what I can gather in the OP, the loan is to cover short term cashflow problems that will save SL from defaulting? In which case, it is quite a crucial intervention by BD.

 

[mb444]

Last time I checked, nopes. But yeah Bangladesh is still in LDC and enjoying the status for quite some time and should have graduated a couple of years back but didn't because it's growth was and is dependent on LDC status. And still the reluctance is there, you guys are and have been looking for ways to remain and enjoy the status, but are forced to graduate.

Like what do you actually export? Textile, Garments, Footwear what else? A little bit of fish and barely nothing. You think you will stay competitive against regional players after you graduate from LDC? Good luck, if you think so...

As i said BDs growth driver is not export but its own economic engine.

Yes BD will remain competitive and no amount of ill wishing will change that.

BD economic base and its macroeconomic and fiscal policies has been cultivated for 50 years. we are a low indebted country that has changed its economy from agrarian to a service based economy.

Our focus is as much about rapidly growing own capacity as it is about growing export.

LDC graduation wont be an issue as our fundamentals are strong.

Last time I checked, nopes. But yeah Bangladesh is still in LDC and enjoying the status for quite some time and should have graduated a couple of years back but didn't because it's growth was and is dependent on LDC status. And still the reluctance is there, you guys are and have been looking for ways to remain and enjoy the status, but are forced to graduate.

Like what do you actually export? Textile, Garments, Footwear what else? A little bit of fish and barely nothing. You think you will stay competitive against regional players after you graduate from LDC? Good luck, if you think so...

Mate just because you dont have a clue about what an LDC is and how that classification came about does not mean the rest of us share your ignorence.

Given pakistans stats if you think you are not an LDC, I wish you well.

 

[Bilal9]

What is SL position in Royingya case ?

We have to ask SL posters here at PDF.

I do remember that there were attacks on unarmed Muslims by Sri-Lankan Hinayana Buddhist extremists in Sri-Lanka itself, in sympathy with their Myanmar Buddhist Monks-gone-rogue compatriots.

Hinayana Buddhists are NOT pacifist. Apologies if I'm mixing up the two Buddhist sects.

Sri Lanka: Muslims Face Threats, Attacks

Authorities in Sri Lanka should end arbitrary arrests and other abuses against Muslims and appropriately protect the community from violence, Human Rights Watch said today.

www.hrw.org

 

[colonel rajesh]

The central bank is going to lend debt-strapped Sri Lanka $200m from forex reserve through a currency swap deal

View attachment 747412


The Bangladesh Bank is going to provide a $200 million loan to debt-ridden Sri Lanka from the foreign exchange reserve, deviating from its internal treasury investment guideline as the borrowing country does not comply with the standard rating requirement for receiving such an investment.



This is the first time that the central bank is going to make such an investment in a country through a currency swap deal.

The board of the Bangladesh Bank recently approved the agreement under special consideration in response to a request for liquidity support from Sri Lanka.

The central bank made the investment decision at a time when Sri Lanka is at risk of defaulting according to global rating agencies.


The internal treasury investment guideline says the Bangladesh Bank can invest its foreign exchange reserve in high-rated bills and bonds of different countries like the US treasury bills.


Global rating agency S&P cut Sri Lanka's long-term foreign currency credit rating to CCC+ from B- for 2020, which exposed the risk of default for the island nation.


Sri Lanka's credit score is now the same as the one assigned to Argentina, Mozambique, and Belize.

Another global rating agency Moody's, which the Bangladesh Bank mostly considers in case of making investments, also downgraded the Sri Lankan government's long-term foreign currency issuer and senior unsecured ratings to Caa1 from B2 in September last year.

The rating assessment reflects that the coronavirus-induced shock will significantly weaken Sri Lanka's already fragile funding and external positions.

Heightened liquidity and external risks stem from Sri Lanka's limited secured funding sources to meet its material external debt service payments over the coming years, during which market refinancing will remain vulnerable to shifts in investor sentiment, according to Moody's assessment.

Under the swap deal, the Bangladesh Bank will provide the fund at 2% interest, which is higher than other current global rates. The deal will be for one year during which the fund will be provided. After getting the fund, Sri Lanka will have to repay it by three months.

According to the deal, the Sri Lankan government will exchange their currency with the Bangladesh Bank equivalent to the amount of dollars they will be given. There will be a government guarantee also.

The country has taken funds through such swap deals also from India and China.

The currency swap initiative was taken after Sri Lankan Prime Minister Mahinda Rajapaksa's visit to Bangladesh in March to join the twin celebrations of the golden jubilee of independence and the birth centenary of Bangabandhu Sheikh Mujibur Rahman.

High foreign exchange reserve prompted the central bank to make such a high-risk investment, said a senior executive of the central bank.

The country's foreign exchange reserve stood at nearly $44 billion in the first week of May, according to the Bangladesh Bank data, which is enough for meeting import expenditures for nearly eight months.

The International Monetary Fund considers foreign exchange reserve adequate when the balance is enough for meeting import expenditures for three to eight months.

When asked about the deviation from the investment guideline made for the swap deal, Deputy Governor Kazi Sayedur Rahman, who has been in charge of managing foreign exchange reserve for a long time, declined to comment.

"There is no risk in this investment because we have a good position in foreign exchange reserve," said Md Serajul Islam, executive director and spokesperson for the Bangladesh Bank.

Moreover, the return from the investment is higher than that from others, he said.

When contacted, Dr Zahid Hussain, former lead economist at the World Bank's Dhaka office, said the risk of this investment is higher than the return.

"I do not see any reason for improving diplomatic relations with Sri Lanka by making such a financial commitment," he said.

He said Bangladesh's foreign exchange reserve is adequate but not high.

Import is already on the rise and commodity prices will be high in the coming days, which will increase import expenditures, Zahid Hussain said.

"The current foreign exchange reserve is adequate for meeting import costs for eight months. In normal times, monthly imports would amount to $5-6 billion. When global commodity prices, including fuel costs, will rise, it will put pressure on the reserve," the economist explained.

Bangladesh's imports were rising as economic activities continued to be normal over a few months before the onset of the second wave of coronavirus.

Consequently, the surplus in the current account balance started to decrease and in March, the surplus dropped sharply on the back of imports of rice and industrial raw materials.

In the July-March period of the current fiscal year, the current account surplus dropped to just $125 million from $1.36 billion in the July-February period.

In February, the surplus dropped by $652 million.

According to an updated report released by the Bangladesh Bank on Thursday, during the July-March period, imports increased by 6% to $42.76 billion compared to the same period in the last fiscal year.

The government's spending on increasing rice imports to enhance food stocks has played a role in growing imports. In addition, imports of intermediate raw materials used in industrial production, including crude oil, have also increased significantly.

In the first nine months of the current fiscal year, the government spent about $2 billion on rice imports, up 41% from the same period in the last fiscal year.

At the same time, consumer goods imports rose by 4.39% to $2.86 billion.



Source

great nation .

 

[Bilal9]

As I said BDs growth driver is not export but its own economic engine.

Yes BD will remain competitive and no amount of ill wishing will change that.

Our focus is as much about rapidly growing own capacity as it is about growing export.

LDC graduation wont be an issue as our fundamentals are strong.

Well said. Somehow some false flaggers and some underage trolls (not talking about anyone specifically) remain clueless about economic fundamentals but decide to comment in pointless fashion...

Add to the dilemma that these people have never been to Bangladesh, then you have complete inability to fathom the current events/happenings locally.

What amazes me is that while some of these folks don't have the courtesy to ask and discuss like decent folks, they still automatically assume that we are being untruthful.

In any case - I guess I should care less....

 

[mb444]

https://oec.world/en/profile/country/bgd

Bangladesh’s Top Exports 2022

Bangladesh’s major exports in 2022 plus main product surpluses & deficits

www.worldstopexports.com

1. Knit or crochet clothing, accessories: US$20.3 billion (44.5% of total exports)
2. Clothing, accessories (not knit or crochet): $19.4 billion (42.4%)
3. Footwear: $1.1 billion (2.4%)
4. Miscellaneous textiles, worn clothing: $1 billion (2.2%)
5. Paper yarn, woven fabric: $603.3 million (1.3%)
6. Fish: $532.9 million (1.2%)
7. Leather/animal gut articles: $368.3 million (0.8%)
8. Headgear: $332.6 million (0.7%)
9. Raw hides, skins not furskins, leather: $139.8 million (0.3%)
10. Plastics, plastic articles: $113.2 million (0.2%)

Should I quote more sources? Or are we making claims out of thin air? Sure, Bangladesh is the number 1 exporter of LCD, computer chips, heavy machinery, electric cars, Lithium Batteries, Solar Panels and much more /s



My bad for even commenting on the thread. I know this is a feel good thread and most of the contribution on this thread are from Bangladeshi's. Anyways carry on and pardon my intrusion.

What you have quoted is correct as is the case that BD also exports pharmaceutical products, IT services, engineered goods, software etc. It is simply that volumes are not comparable to RMG sector.

As i have said BD needs to service an internal market of 165m and a self sufficient internally focused pharma sector or white goods sector may not translate to export numbers but adds to the GDP.

 

[DalalErMaNodi]

What you have quoted is correct as is the case that BD also exports pharmaceutical products, IT services, engineered goods, software etc. It is simply that volumes are not comparable to RMG sector.

As i have said BD needs to service an internal market of 165m and a self sufficient internally focused pharma sector or white goods sector may not translate to export numbers but adds to the GDP.

BD is not begging bowl or a serial loan defaulter... Save your breath, end of story.

 

[mb444]

Well, the international financial institutions for this year said Pakistan would have a growth rate of 1.5% and we have 4%. So I don't really have much faith in their estimations. They base their estimates on constant, still data, but real world there is always change, there are always anomalies. So one can always underperform or overperform in reality. Their figures should be considered more like predications than estimates, because a
lot of the time they are way off.

Who knows what would really happen tomorrow, what if we face a new variant of Corona, and who knows how every country handles that situation.

Not all countries are the same. Pakistan do not have consistent economic policies, you fiscal stance is irratic.

That is not the case with BD. Constance enables the prediction that has come to be for 30+ years without fail.

 

[Bilal9]

What you have quoted is correct as is the case that BD also exports pharmaceutical products, IT services, engineered goods, software etc. It is simply that volumes are not comparable to RMG sector.

As i have said BD needs to service an internal market of 165m and a self sufficient internally focused pharma sector or white goods sector may not translate to export numbers but adds to the GDP.

Last fiscal Walton supplied Tk. 4100 crore worth of products to the local market.

Not even talking about RFL/Pran, about the fifteen other large corporates listed in DSE.

 

[Indos]

We have to ask SL posters here at PDF.

I do remember that there were attacks on unarmed Muslims by Sri-Lankan Hinayana Buddhist extremists in Sri-Lanka itself, in sympathy with their Myanmar Buddhist Monks-gone-rogue compatriots.

Hinayana Buddhists are NOT pacifist. Apologies if I'm mixing up the two Buddhist sects.

We can find from their position on latest UN resolution on Rohingya as Western and Muslim countries support and other country like China oppose and some countries are abstain

 

[Bilal9]

We can find from their position on latest UN resolution on Rohingya as Western and Muslim countries support and other country like China oppose and some countries are abstain

Well Sri Lanka and India abstained.

I do not know why we lent $200 Million to Sri Lanka. Do they deserve it? I'd say no - going by their actions.

"COLOMBO: India on Thursday abstained from voting on a UN Committee’s resolution on the human rights situation in Myanmar in regard to the Rohingya Muslim minority. Among the 26 countries which abstained along with India, were Sri Lanka..."

India Abstains From Voting on UN Rohingya Resolution

Actor, UN Special Envoy Angelina Jolie denounces sexual violence against Rohingya women

www.thecitizen.in

 

[DalalErMaNodi]

Well Sri Lanka and India abstained.

I do not know why we lent $200 Million to Sri Lanka. Do they deserve it? I'd say no - going by their actions.

"
COLOMBO: India on Thursday abstained from voting on a UN Committee’s resolution on the human rights situation in Myanmar in regard to the Rohingya Muslim minority. Among the 26 countries which abstained along with India, were Sri Lanka, Nepal, Bhutan and Japan.

China and the Russian Federation were among ten countries which voted against the resolution. China and the Russian Federation are against any form of UN international intervention directed by the West in the internal affairs of Myanmar and other developing countries. China and Russia are “crusaders” for the cause of “national sovereignty” with the West using human rights as an instrument to intervene in other countries which do not fall in line with its policies. China and Russia want Myanmar and Bangladesh to settle the refugee issue bilaterally rather than bring in third parties to settle the dispute. "

India Abstains From Voting on UN Rohingya Resolution

Actor, UN Special Envoy Angelina Jolie denounces sexual violence against Rohingya women

www.thecitizen.in

To raise our credit rating.

 

[SpaceMan18]

But I wonder how jobs can be created without setting up millions of industries?

I can assume the GoB wants its people to work abroad, and remit money to facilitate the govt to import many consumer goods for the rich.

Yeah we desperately need to industrialize if we want to make any sort of progress to our economy or country to be honest.

Also making our own infrastructure on time and quality , if we don't do that we will never grow

 

[bluesky]

Yeah we desperately need to industrialize if we want to make any sort of progress to our economy or country to be honest.

Also making our own infrastructure on time and quality , if we don't do that we will never grow

A $35 billion export and $18 billion remittances is a very very large sum of money that is not used to industrialize but to import foreign consumer goods.

And then borrow money from foreign sources to build prestigious infrastructures. গরীবের ঘোড়ারোগ।

BD needs to reverse the policy. It should spend much of its money to extend loans to the private sector to industrialize the country and thus provide jobs for the youth.

 

[bluesky]

This is essentially investing in a treasury bond, that’s why.

As far as I know, an Investment has risks. It may lose the money completely but a loan is different. The borrower has to pay it back.

So, which is the truth in this case?