Regarding climate change
Bangladesh has voiced strong opposition to plans by the UK Department for International Development (DFID) to provide close to US$100 million in climate change aid – because of its delivery through the World Bank.

“We are strongly against the World Bank’s involvement in handling the climate fund. DFID should give the money straight to the Bangladesh government rather than giving it to the World Bank to disburse it,” Food and Disaster Management Minister Abdur Razzaque told IRIN on 16 February.

“It should be a country-led programme rather than a World Bank-led one,” he said, adding that there were expectations the Bank would attach “unacceptable strings and conditions to its programme”.

His comments come one day after 21 civil society organizations, including campaigners from the European Action Group on Climate Change Bangladesh, the World Development Movement (WDM) and the Jubilee Debt Campaign, protested against the UK decision outside the DFID office in Dhaka.

They insisted that DFID withdraw all conditions on the $94 million grant being offered to Bangladesh to cope with the impact of climate change. 

DFID should give the money straight to the Bangladesh government rather than giving it to the World Bank to disburse it.

But

the British High Commission in Dhaka said how the funds were given out was not an issue.

“The issue of involvement of the World Bank in disbursing the money is a minor issue as the government of Bangladesh shall have full control of the fund,” Nazneen Ferdousi, senior press officer for the British High Commission in Dhaka, told IRIN.

The World Bank, as a development partner, would only provide administrative support in handling the funds, she said. 

“We don’t see any problem in it,” she said.

When contacted, World Bank officials referred IRIN to DFID.

Within the next 50 years, over 20 million people could be displaced and become “climate change refugees”, if sea and salinity levels rise in Bangladesh, according to the government’s 2009 Bangladesh Climate Change Strategy and Action Plan.

Speaking at the opening of a two-day Bangladesh development meeting on 15 February, Bangladesh Prime Minister Sheikh Hasina called on donor countries to speed up delivery of promised funds to help mitigate the effects of climate change.

World leaders pledged $30 billion from 2010 to 2012 at the December climate change summit in Copenhagen to help least developed countries (LDCs) most vulnerable to climate change, particularly low-lying coastal countries like Bangladesh. There is a complex range of climate change adaptation funding mechanisms, reviewed by IRIN here: http://www.irinnews.org/Report.aspx?ReportId=88070.

Bangladesh says it is entitled to ask for at least 15 percent of the climate adaptation fund pledged in Copenhagen.

Donors in attendance in Dhaka included the USA, European Union, the World Bank and the Asian Development Bank. The meeting is to review Bangladesh’s development programmes, including plans to reduce poverty, and help donors select areas of cooperation.

The interest rate on 15-Year Bangladesh Government Treasury Bonds (BGTB) remained unchanged Tuesday as the rate failed to attract interest from commercial banks.

The yield, also known as coupon interest rate, on the 15-Year BGTB was 8.74 percent, unchanged from the previous auction on Jan.13, according to auction results issued Tuesday.

“The interest rate on the bond has been fixed in line with the market demand,” a senior official of the Bangladesh Bank (BB), the country’s central bank, told official without elaborating.

Eighteen bidders offered bids amounting to US$17.46 million (BDT 1.21 billion) for the risk-free government bond. Only four bids amounting to $4.62 million (BDT 320 million) were accepted.

About $9.81 million (BDT 680 million) was devolved on primary dealers, the central bank of Bangladesh said.

“Most of the banks expect that the demand for fresh investment would go up in the near future and then the interest rate on the long-term security would increase further,” said a senior treasury official of a private commercial bank..

The central bank earlier selected 15 PDs – 12 commercial banks and three non-banking financial institutions (NBFIs) – to handle government-approved securities in the secondary market.

Currently, four government bonds are traded in the markets: 5-year, 10-year, 15-year and 20-year

Taka falls against Dollar.
Bangladesh taka (BDT) fell further against the US dollar on Monday following a rise in demand for the greenback in the inter-bank foreign exchange market.

The US dollar was traded between Tk 69.27 and Tk 69.31 in the foreign exchange market on the day against Tk 69.27 of the previous day, treasury officials said.

The BDT has been depreciating since January 24 this year following an increase in demand for the greenback in the inter-bank market to settle payments for import of petroleum products, scrap vessels, edible oil and food grains.

“The exchange rate between BDT and the US dollar has been re-fixed in line with the market demand,” a senior official of the Bangladesh Bank (BB) told the FE, adding that the central bank is monitoring the country’s foreign exchange market closely to keep it stable.

“The upward trend of US dollar is likely to continue for a few more days if the central bank refrains from intervening in the market,” a senior treasury official of a leading private commercial bank told FE.

He also said the demand for the greenback might decline shortly after easing pressures on payments for petroleum products, scrap vessels, edible oil and food grains particularly wheat.

Due to Global recession and the strong surveving capacity of Bangladesh and due to the reformed atitude of political govt develop the interest of investing in Bangladesh.Bangladeshi workers abroad sent home a record $6.48 billion as remittances in the first seven months of the current fiscal year, registering a 20.89 percent growth over the same period in the last fiscal year.

The remittances from Bangladeshi nationals working abroad were estimated at $950.92 million in January, up by $77.06 million from the previous month. In December 2009, the remittance was $873.86 million, according to the central bank statistics, released on Wednesday.

“The inflow of remittances is still at a satisfactory level,” a senior official of the Bangladesh Bank (BB), the country’s central bank, told KAHN Media in Dhaka, adding that most of the Bangladeshi expatriates sent higher amount of remittances to their relatives during the period under review to facilitate the current Boro cropping.

Bangladesh received $6.484 billion during the July-January period of the fiscal 2009-10 against $5.363 billion in the same period of the previous fiscal, the BB’s data showed.

The latest figure shows that despite the slowdown of overseas jobs, inflow of remittances has maintained an upward trend — a continuation of last fiscal year when remittances grew 22.41 percent, the central bank officials said.

The BB earlier took a series of measures to encourage expatriate Bangladeshis to send their hard-earned wages through formal banking channels instead of the illegal “hundi” system in order to boost the country’s foreign exchange reserves.

Four state-run commercial banks and dozens of private commercial banks have also stepped up efforts to increase remittance flow from the Middle East, the United Kingdom, Malaysia, Singapore, Italy and the United States.

“We are establishing new contacts with foreign exchange houses so that our overseas workers can find it easy to send money home. We’re also trying to set up our own exchange houses in different parts of the world,” Managing Director and Chief Executive Officer of the Agrani Bank Limited Syed Abu Naser Bukhtear Ahmed told KAHN in the capital, Dhaka.

The country’s foreign exchange reserves stood at $10.13 billion on Wednesday due to the robust growth of remittances, the BB officials confirmed.

It a controvercial issue about the world bank policy or funding policy is favouring or dis favouring our contry development. now its more clear .Bangladesh Bank governor Atiur Rahman said the country would carry on with its own policies, rejecting the World Bank’s recent projection about Bangladesh’s downward economic growth. Dr. Atiar Rahman announced that Bangladesh Bank will not follow any direction or prescription from others in any sector hampering national economic interest.

“We must determine what to do, where and when to do it,” he told a discussion on inclusive banking and widening formal financial services on Saturday.

“We need to take up the challenge since investment is increasing impressively,” the governor added.

Global Economic Prospects (GEP) 2010, launched worldwide on Thursday, estimated Bangladesh’s economic growth at 5.9% in FY 2009 and projected a continued downturn with just 5.5% growth in FY 2010.

A modest recovery in FY 2011, projected at 5.8%, would still fall short of the desired growth of six per cent and above.

Finance minister Abul Maal Abdul Muhith rejected the projections when asked to comment on the World Bank’s forecast as it came out last Thursday.

The governor said on Saturday, “The poor countries have many problems, while advice and prescriptions pour in from many directions. Sometimes we cannot even gauge what benefits we might derive out of them.”

He said, unable to decide on their own, poor countries like Bangladesh, sometimes end up accepting that advice and find themselves in a worse situation.

“Due to such decisions, the future of our state-owned banks has become uncertain.”

Atiur Rahman said a multilateral lending agency had also suggested dissolution of Bangladesh Bank’s agriculture department, which he has taken steps to revitalise since he took up the reins of the central bank last year.

Bangladesh could not overcome the effects of the recent global economic meltdown if the agricultural sector did not contribute significantly, he added.

“Observing grassroots level activities and investment potential, I do not see any symptom of downward growth,” Atiur added.

The governor also said inclusive banking across the country could sustain economic growth and a robust economy.
The governor also emphasized on changing mindsets of the bankers and investors to develop social connectivity based banking for getting better ranking and spreading regional potentiality based investment for balanced regional economic development in the country.

He said change of mindset is more essential than supply of capital and real development only could be possible if initiatives would be taken properly from the entrepreneurs.

BB will try its best to influence the government policy makers for creating new entrepreneurs and opening of bank branches in rural areas would be permitted as much as wanted by the bankers, the BB governor said.

Bangladesh Bank unveiled its half-yearly monetary policy on Tuesday, which aims to contain average inflation under 6.5 per cent eying the government’s growth target, and bring more people under banking services.

“Financial inclusion is a key feature of the monetary policy,” Bangladesh Bank (BB), the country’s central bank, Governor Atiur Rahman told reporters at the central bank in Dhaka while releasing the monetary policy for January-June period of the fiscal 2009-10 (FY10) year.

Around 25 percent of the total population is still outside the financial services and do not go to banks to take any service, the central bank chief added.

“We’re trying to bring those people under the country’s banking system through providing new policy supports,” he said mentioning his latest initiatives including farmers are now able to open account with the state-owned banks with a nominal deposit of 14 cents (BDT 10).

“We’ve formulated the second half-yearly monetary policy of this fiscal aiming at attaining a sustainable high broad-based economic growth in the unfolding internal and global context, while containing inflation within tolerable moderate levels,” the central bank chief noted.

The central bank of Bangladesh will continue the existing accommodative monetary policy for the second half (H2) of the fiscal 2009-2010 (FY10) year in line with the stakeholder’s recommendations.

Bangladesh’s top two trade bodies – the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI) – earlier recommended that the central bank continue the existing accommodative monetary policy for the next six months of FY10 to achieve maximum economic growth.

“?.the prevailing supportive monetary conditions will be continued in H2 FY10 to facilitate the recovery in exports and new investments taking firmer roots,” the BB governor said.

The BB’s monetary and credit policies will continue targeted programs pursuing fuller financial inclusion of the economic activity segments, including agriculture and small and medium enterprise (SMEs) and population segments under-served by the markets, in an effort to move toward fostering inclusiveness of economic growth, he added.

The central bank sees that the country’s consumers’ price index (CPI) inflation on point-to-point basis may rise further in the coming months of this fiscal while the 12-month average CPI will be able to at the budgetary target by the end of FY10.

Food and non-food commodity prices in the global market have firmed up with an uptrend in many of these and domestic prices of food grains are for this reason holding firm even in the harvest seasons.

“?.the fluctuation of point-to-point CPI inflation looks set to be somewhat on upward bias in the coming months,” the central bank said in its monetary policy.

The country’s CPI inflation increased slightly to 6.71 percent on a point-to-point basis in October last year from 4.60 per cent in September 2009 because of the rise in prices of both food and non-food items.

Accordingly, the 12-month average CPI inflation is likely to cease decline; creeping upward in the second half of this fiscal but remaining within the 6.5 per cent by the end of FY10, as projected by the BB earlier.

“The inflation expectation will be cold down if the government keeps supply side stable,” the central bank chief said, adding that the government has already taken decision to restart open market sale (OMS) of rice along with importing essentials.

“We’ll stand ready to respond promptly with modification in monetary stance required by any exigency in unfolding development in the domestic and external scene,” the central bank chief noted.

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The export sector within Bangladesh has grown to become an increasingly significant component of national trade, and has involved significant private sector investment over the last decade. The connection of production networks commonly involving small-scale producers, and traditional market and distribution systems, to supply raw materials for products meeting international standards, offers particular management and logistic challenges.To emphasis export Bangladesh Bank has doubled the export development fund (EDF) to $300 million (Tk 30 crore) on Tuesday to offset export losses from global recession. which was previously $150 Million.

We’ve relaxed the rules and regulations relating to EDF loans to add an impetus to the country’s export performances,” a senior official of the Bangladesh Bank (BB)

“The EDF has been doubled to cover the losses of the exporters due to global recession,” governor Atiur Rahman told .

Exporters will benefit from the fund, he said.

The central bank, which manages the EDF, provides loans from the fund to exporters in foreign currencies. The EDF size was $ 150 million or Tk 15 crore before.

The textile owners under the BTMA, who did not get any loan from the fund, will
now get loans to import yarn on condition that clothes made from it must have to be exported, said Rahman.

A circular, issued on Tuesday, was sent to the chief executives of all banks.

From Jan 1 next year, the banks will take loan from EDF at London Interbank Offered Rate (LIBOR) plus 1 percent interest and will extend credit to the exporters at LIBOR rate plus 2.50 percent interest.

Until now, they used to borrow from EDF at the LIBOR rate and gave loan at LIBOR rate plus 2.50 percent interest to the exporters.

The previous process will become void on December 31 of the current year, said the circular.

To direct the banking policy according to the vision of Banking security and toemphasis invest the The central bank of Bangladesh on Tuesday rationalized bank charges, fees and commissions to protect interests of depositors, investors and clients.

The Bangladesh Bank (BB), the country’s central bank, issued a master circular on schedule of changes on the day for both lending and deposits that would come into effect from January 1, 2010.

“We’ve taken the decision in consultation with the Association of Banks, Bangladesh (ABB),” a BB senior official told , adding that the central bank has taken the latest move after detecting inconsistencies in the charges, fees and commissions for maintaining saving accounts with the commercial banks.

“The central bank will rationalize the charges in consolation with stockholders time to time to facilitate the country’s business activities,” the BB official added.

The central bank asked the banks not to realize four types of charges — incidental charge, minimum balance fee, ledger fee and service charge.

“The banks will have to send its list of the charges and fees on a half yearly basis — in July and January to the central bank,” the BB said in its circular, adding that in case of any change in charges and fees, banks have to inform the related department of the central bank about it and post information on banks’ websites.

Different trade bodies, including the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI), Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufactures and Exporters Association (BKMEA) earlier requested the central bank governor for taking necessary measures to bring down the banks’ commissions and service charges to a reasonable level