Fiscal deficit stands at over $9 billion
Mahfuz Emran: Despite various initiatives to control imports, the dollar situation is not improving. The deficit in foreign exchange financing continues to increase. In the 9 months till March of the current financial year, the deficit was $9.26 billion.
It was only $2.93 billion in the same period of last financial year. And until February of the current financial year, this deficit was $8.46 billion. This is happening due to various reasons including rapid reduction of foreign debt in the private sector, withdrawal of investment. However, the trade deficit has declined and there is a current account surplus.
Bangladesh Bank has released the balance of payments or foreign transaction balance for the current fiscal year 2023-24 for the period of July-March on Monday. It shows that the import decreased by 15.42 percent to $45.62 billion in the first 9 months. During the same period, exports increased by 3.99 percent to $40.87 billion. This has reduced the trade deficit by$4.74 billion. The deficit was $14.63 billion in the same period last fiscal year.
Those concerned say that although the import has decreased on paper, there is a question about how much it has actually decreased. At this time of dollar crisis, as a result of import control, many people are bringing products without LC or under invoicing or showing low prices.
There are also cases of opening LC of one product and bringing another product. These payments are being made outside the banking channel. As a result, the demand for hundi has increased. Due to which the remittances have not increased even though the migration of laborers has increased a lot.
According to the data of Bangladesh Bank, remittances received through legal channels were $17.07 billion till last March. Compared to the same period of the previous year, which is only 6.48 percent higher. But last year alone, a record of more than 13 lakh Bangladeshi workers went abroad. As a result of extensive import controls and increased exports and remittances, the current account deficit has now turned into a surplus of $5.80 billion.
At the end of last financial year in March where the deficit was $3.30 billion. All in all, the deficit in the overall trade balance stood at $4.75 billion. At the end of the previous month, the deficit was $4.43 billion. However, the deficit in the same period of last financial year was $8.48 billion.
The government is trying to increase foreign loans along with various initiatives to meet the dollar crisis. Taking loans from various organizations including International Monetary Fund (IMF), World Bank, Asian Development Bank (ADB). Various steps are underway to bring the retained dollars back to the bank. Currently, Bangladesh has to accept various conditions under the IMF’s $4.7 billion loan program. One of these conditions was to keep a reserve of $20.11 billion by next June. However, this condition has been relaxed and now it has been asked to keep $14.77 billion. The IMF viewed the issue of reserves with leeway but insisted on other conditions. Last Wednesday, under pressure from the organization, the central bank increased the exchange rate by Tk 7 to Tk 117. Same day interest rates are left up to the market and the policy rate is increased.
Bangladesh Bank announced the monetary policy for the second half of the current financial year on January 17. It has projected an improvement in the foreign exchange balance by next June. The central bank thinks that the trade deficit will further decrease to $10.20 billion by the end of next June. Current account deficit will be only $33 million. There will be a fiscal surplus of $200 million by June. Apart from this, the reserve will increase by $4 billion compared to that time. According to BPM-6, the reserve at the end of last January was $19.96 billion. Yesterday which fell to $18.26 billion. Reserves crossed the $48 billion mark in the country’s history in August 2021. From there it has continuously decreased to this level.
Hasina was mastermind of Pilkhana massacre
India implemented plan Staff Correspondent: There was a domestic and foreign conspiracy be…