BB in a quagmire as excess liquidity balloons
Funds soar 95pc year-on-year to Tk 204,700cr in Dec last year
Bangladesh Bank has fallen in a quagmire tackling an escalation of excess liquidity trending in banks, emerging from slow credit growth and implementation of stimulus packages and an upward trend in receiving remittance.
Excess liquidity in the banking sector escalated 95 per cent year-on-year to Tk 204,700 crore in December last year, which have largely been invested in treasury bills and bonds, showed data from the central bank.
There is no scope to mop up liquidity from banks at this moment as the excess fund has not had any impact on inflation because of suppressed demand among consumers and investors due to the economic hardship brought on by the coronavirus pandemic.
DUTY-FREE ACCESS FOR 97PC GOODS
Export potential in China market remains untapped for pandemic
Despite the duty-free market access for 97 per cent goods, Bangladesh could not seize the opportunity for most of last year because of a lack of diversified goods and the fallouts of the coronavirus pandemic.
Beijing extended the duty-free access to 97 per cent of Bangladeshi goods in July last year, bringing 8,256 products under the tariff-free regime. Shipment to China stood at $566.15 million in 2020, according to data from the Export Promotion Bureau (EPB). It was $238.77 million in the January-June period and rose to $327.38 million in the second half.
Country sees boost in imports
A good sign for economy: Experts
Anisul Islam Noor
17th January, 2021 09:43:30
The country’s import volume has soared 9.7 per cent year-on-year to $4.82 billion in November last year, showing a sign of recovery in financial activities amid the coronavirus pandemic.
Economist and executive director of Policy Research Institute of Bangladesh (PRI) Ahsan H. Mansur sees the rise in imports as a good sign for the country’s economy, explaining that a rise in imports means increasing investment and impetus to the economy as a whole.
“Bangladesh’s economy will soon start to see growth again if this trend continues over the next few months,” he said.
The number of registered vehicles across the country including the capital witnessed a sharp decline last year, mainly due to economic slowdown induced by Covid-19 . While vehicles registered all over the country declined last year for the first time since 2013, Dhaka saw the trend for second consecutive year, shows data of Bangladesh Road Transport Authority (BRTA).
Businesses are experiencing an uneven recovery from the pandemic-induced slowdown as larger firms are bouncing back strongly thanks to the easy access to the stimulus packages while the smaller ones are still mired in the crisis.
The large industrial and service sectors have made as much as 80-90 per cent recovery compared to the pre-pandemic level. It is only 30-40 per cent for small and medium enterprises.
Since March, the government has unveiled 21 stimulus packages involving more than Tk 120,000 crore, which is about 4.5 per cent of the GDP of Bangladesh and one of the largest in the world.
Businesses belonging to the large industrial and service sectors have managed loans smoothly, whereas small enterprises have been largely deprived.