Balance of payments continues to maintain surplus position
Sunday, 12 April 2009
Siddique Islam
The country's overall balance of payments continued to maintain a surplus position during the first seven months of the current fiscal mainly due to improvement in both current and financial accounts.
The current account balance recorded a surplus during the July-January period of fiscal 2008-09, thanks to robust growth of inward remittance, officials said.
"We expect that the existing trend of current account balance along with the overall balance of payments will continue," Director General of the Bangladesh Institute of Development Studies (BIDS) Mustafa K Mujeri told the FE Saturday.
Mr. Mujeri, also former chief economist of the central bank, said the pressure of import payments has eased slightly during the period because of the falling trend in prices of essential commodities including fuel oils in the global market that helps reduce trade deficit of the country.
The country's overall trade deficit rose to $3.451 billion during the period from $2.838 billion of the corresponding period of the previous fiscal.
During the period, export earnings stood at $9.073 billion against the import payments of $12.524 billion, according to the central bank statistics.
"Due to larger current account transfers of $5.784 billion the current account balance recorded a surplus of $464 million during July-January, 2008-09 against the surplus of $168 million during July-January, 2007-08," the central bank said in its Major Economic Indicators: Monthly Update-March, 2009, released recently.
The overall balance also showed a larger surplus of $618 million during the period under review against the deficit of $45 million during July-January period of the previous fiscal, according to the Monthly Update.
"The country's external balance is still in good position despite the ongoing global economic recession," a senior official of the Bangladesh Bank (BB) told the FE, adding that the existing trend in external sectors may continue if the government measures are effectively implemented.
"Both the government and the central bank are now working to help mitigate the impact on the ongoing economic meltdown in our economy," the central bank official said.
He also added that the BB has taken some measures including slashing interest rate on lending in five specific areas and relaxation of loan rescheduling rules to four affected export-oriented sectors.
Meanwhile, remittances from Bangladeshi expatriates stood at $7.029 billion in nine months of this fiscal, growing by 24.43 per cent from that of the corresponding period of last fiscal.
The country received $7.029 billion during the July-March period of fiscal 2008-09 against $5.649 billion of the corresponding period of the previous fiscal, the BB's data showed.
However, the flow of net foreign direct investment (FDI) rose to $764 million during the period from $430 million of the corresponding period of the previous fiscal, the Update said.
"The inflow of FDI increased in December last after a Japanese company transferred a fund worth $350 million following the purchase of 30 per cent stake of AK Khan in the mobile phone company TM International Bhd (TMIB), known as AKTEL," the BB officials added.
On the other hand, the flow of portfolio investment has recorded a deficit of $67million during the period under review due to the ongoing global financial meltdown, they added.
The net receipts of foreign aid stood also lower at $580.62 million during the period against $669.15 million of the corresponding period of previous fiscal, the BB officials confirmed.
The country's overall balance of payments continued to maintain a surplus position during the first seven months of the current fiscal mainly due to improvement in both current and financial accounts.
The current account balance recorded a surplus during the July-January period of fiscal 2008-09, thanks to robust growth of inward remittance, officials said.
"We expect that the existing trend of current account balance along with the overall balance of payments will continue," Director General of the Bangladesh Institute of Development Studies (BIDS) Mustafa K Mujeri told the FE Saturday.
Mr. Mujeri, also former chief economist of the central bank, said the pressure of import payments has eased slightly during the period because of the falling trend in prices of essential commodities including fuel oils in the global market that helps reduce trade deficit of the country.
The country's overall trade deficit rose to $3.451 billion during the period from $2.838 billion of the corresponding period of the previous fiscal.
During the period, export earnings stood at $9.073 billion against the import payments of $12.524 billion, according to the central bank statistics.
"Due to larger current account transfers of $5.784 billion the current account balance recorded a surplus of $464 million during July-January, 2008-09 against the surplus of $168 million during July-January, 2007-08," the central bank said in its Major Economic Indicators: Monthly Update-March, 2009, released recently.
The overall balance also showed a larger surplus of $618 million during the period under review against the deficit of $45 million during July-January period of the previous fiscal, according to the Monthly Update.
"The country's external balance is still in good position despite the ongoing global economic recession," a senior official of the Bangladesh Bank (BB) told the FE, adding that the existing trend in external sectors may continue if the government measures are effectively implemented.
"Both the government and the central bank are now working to help mitigate the impact on the ongoing economic meltdown in our economy," the central bank official said.
He also added that the BB has taken some measures including slashing interest rate on lending in five specific areas and relaxation of loan rescheduling rules to four affected export-oriented sectors.
Meanwhile, remittances from Bangladeshi expatriates stood at $7.029 billion in nine months of this fiscal, growing by 24.43 per cent from that of the corresponding period of last fiscal.
The country received $7.029 billion during the July-March period of fiscal 2008-09 against $5.649 billion of the corresponding period of the previous fiscal, the BB's data showed.
However, the flow of net foreign direct investment (FDI) rose to $764 million during the period from $430 million of the corresponding period of the previous fiscal, the Update said.
"The inflow of FDI increased in December last after a Japanese company transferred a fund worth $350 million following the purchase of 30 per cent stake of AK Khan in the mobile phone company TM International Bhd (TMIB), known as AKTEL," the BB officials added.
On the other hand, the flow of portfolio investment has recorded a deficit of $67million during the period under review due to the ongoing global financial meltdown, they added.
The net receipts of foreign aid stood also lower at $580.62 million during the period against $669.15 million of the corresponding period of previous fiscal, the BB officials confirmed.