An intelligence report has identified large-scale money siphoning, lack of Ad Confirmation in repatriating export earnings, trade deficit and lower amount of foreign aid as some of the major reasons for devaluation of Bangladesh currency against US dollar.
The agency has recommended 10-point recommendations to arrest the situation.
Bangladesh currency has been devalued about Tk five over a period of the last one year, according to Bangladesh Bank (BB) data.
Bangladesh Bank Governor Atiur Rahman has admitted the deterrents and assured of stabilising the value of Taka against dollar very soon.
"You know that the country's import has been on the rise compared to export earnings resulting in trade deficit. Besides, a negative trend is evident in remittances and foreign aid, which have also played significant roles in the devaluation," the BB governor told the FE on Tuesday.
He said Bangladesh Bank has persistently been putting pressure on the exporters to repatriate their export earnings within a month. Every week, monitoring is taking place on each exporter so that they cannot make delay in bringing back their export earnings.
"Things will be improved if foreign-aided development projects are implemented soon and foreign direct investment takes place in the country.
"It is a matter of time to bring back normalcy to the local currency and see it stronger against the US dollar," the Governor told the FE.
On siphoning, Mr Atiur said it is nothing new in the country. "As soon as we get information, action is taken against the launderers," he said.
According to the intelligence report, a group of unscrupulous traders and launderers siphon off US dollars from the country to Malaysia, UAE, Hong Kong, Singapore and Australia. They do so to become immigrants to those countries or to purchase flats or other immovable properties in foreign countries.
Another group of dishonest people invest in foreign countries through siphoning off dollars, which are bought from the kerb market in Bangladesh that has resulted in appreciation of dollar price against Taka, the report elaborated.
The report said as majority exporters fail to get Ad Confirmation from their foreign buyers, repatriation takes more time. Generally, a third bank (other than the L/C opening bank)issues confirmation to exporters in favour of importers which guarantees export earnings' repatriation to importers timely from the third bank, in case importers fail to pay.
Asked, Executive Director of BB, Mahfuzur Rahman, said they have been persuading the exporters to have Ad Confirmation to ensure quick repatriation of export earnings to the country.
Executive Vice-President, NCC Bank Ltd, Ghulam Sarwar, said Ad Confirmation gives guarantee for money repatriation quickly.
The intelligence report said currently about $2.0 billion are now lying un-repatriated in foreign countries against export orders due mainly to lack of Ad Confirmation.
The report said the country received $781.68 million in foreign aid during the period of July to March of the current fiscal year against $1.27 billion received over the same period in the previous fiscal year.
It said remittance income during the first eight months of the outgoing fiscal year was $ 9.19 billion, which was $9.58 billion over the same period in the previous fiscal year.
About trade deficit, the report said trade deficit during July-March of 2010-2011 was $710.10 million, which was $ 2.13 billion in surplus over the corresponding period in the previous fiscal year.
Recommending, the intelligence agency suggested discouraging import of luxury items, settling the export orders quickly, undertaking efforts to increase the foreign aid, initiatives to export enhanced manpower, diplomatic approach to increase the salaries of Bangladeshi workers living in foreign countries, strengthening monitoring system to address the siphoning off of money and formulating regulations for becoming immigrants in foreign countries and purchasing immovable properties abroad.
The agency has recommended 10-point recommendations to arrest the situation.
Bangladesh currency has been devalued about Tk five over a period of the last one year, according to Bangladesh Bank (BB) data.
Bangladesh Bank Governor Atiur Rahman has admitted the deterrents and assured of stabilising the value of Taka against dollar very soon.
"You know that the country's import has been on the rise compared to export earnings resulting in trade deficit. Besides, a negative trend is evident in remittances and foreign aid, which have also played significant roles in the devaluation," the BB governor told the FE on Tuesday.
He said Bangladesh Bank has persistently been putting pressure on the exporters to repatriate their export earnings within a month. Every week, monitoring is taking place on each exporter so that they cannot make delay in bringing back their export earnings.
"Things will be improved if foreign-aided development projects are implemented soon and foreign direct investment takes place in the country.
"It is a matter of time to bring back normalcy to the local currency and see it stronger against the US dollar," the Governor told the FE.
On siphoning, Mr Atiur said it is nothing new in the country. "As soon as we get information, action is taken against the launderers," he said.
According to the intelligence report, a group of unscrupulous traders and launderers siphon off US dollars from the country to Malaysia, UAE, Hong Kong, Singapore and Australia. They do so to become immigrants to those countries or to purchase flats or other immovable properties in foreign countries.
Another group of dishonest people invest in foreign countries through siphoning off dollars, which are bought from the kerb market in Bangladesh that has resulted in appreciation of dollar price against Taka, the report elaborated.
The report said as majority exporters fail to get Ad Confirmation from their foreign buyers, repatriation takes more time. Generally, a third bank (other than the L/C opening bank)issues confirmation to exporters in favour of importers which guarantees export earnings' repatriation to importers timely from the third bank, in case importers fail to pay.
Asked, Executive Director of BB, Mahfuzur Rahman, said they have been persuading the exporters to have Ad Confirmation to ensure quick repatriation of export earnings to the country.
Executive Vice-President, NCC Bank Ltd, Ghulam Sarwar, said Ad Confirmation gives guarantee for money repatriation quickly.
The intelligence report said currently about $2.0 billion are now lying un-repatriated in foreign countries against export orders due mainly to lack of Ad Confirmation.
The report said the country received $781.68 million in foreign aid during the period of July to March of the current fiscal year against $1.27 billion received over the same period in the previous fiscal year.
It said remittance income during the first eight months of the outgoing fiscal year was $ 9.19 billion, which was $9.58 billion over the same period in the previous fiscal year.
About trade deficit, the report said trade deficit during July-March of 2010-2011 was $710.10 million, which was $ 2.13 billion in surplus over the corresponding period in the previous fiscal year.
Recommending, the intelligence agency suggested discouraging import of luxury items, settling the export orders quickly, undertaking efforts to increase the foreign aid, initiatives to export enhanced manpower, diplomatic approach to increase the salaries of Bangladeshi workers living in foreign countries, strengthening monitoring system to address the siphoning off of money and formulating regulations for becoming immigrants in foreign countries and purchasing immovable properties abroad.
Comments
Post a Comment