BB assessing impact of Sidr on BoP
Sunday, 30 December 2007
FE Report
The Bangladesh Bank (BB) has started assessing the impact of cyclone Sidr on the country's overall balance of payments (BoP) situation, official sources said.
The cyclone will lead to imports of a large quantity of food grains, construction materials and capital machinery to meet the growing demand in the local market.
"We have started estimation of the effects of cyclone Sidr on the overall balance of payments that will help to know the overall position of the economy by the end of this fiscal," a BB senior official told the FE Saturday.
Two high officials are working to make a projection of the overall balance of payments situation after two successive foods, followed by cyclone, the official added.
Meanwhile, the country's overall balance of payments continued to maintain a surplus position despite a deficit in the current account balance during the first quarter (Q1) of the current fiscal.
The overall balance showed a surplus of US$203 million during July-September period of the fiscal 2007-08 (FY08) against the surplus of $133 million of the corresponding period of the last fiscal, according to the central bank statistics.
The current account balance moved, on the other hand, to a small deficit amounting to $23 million in Q1 of FY 08 as against strong surpluses of $445 million in the corresponding period of the previous fiscal.
"This has happened despite a healthy surplus in current transfers of $1.808 billion that includes an inflow of workers' remittances of $1.629 billion representing a growth of 22.5 per cent over the first quarters of previous fiscal," the central bank said in its Bangladesh Bank Quarterly for July-September 2007.
However, the surplus was offset by a widened trade deficit rose to $1.167 billion and negative services and income accounts amounting to $389 million and 275 million respectively.
On the other hand, the capital and financial accounts maintained a reasonable surplus of $271 million in the Q1 against a deficit of $96 million in the same period of the previous fiscal, the data showed.
"The current account deficit may come down in the near future due to higher inflow of remittances and an upward trend in the overall export performance," another BB official said.
He also said the overall balance of payments is likely to improve further as the country is set to receive foreign aid and foreign loans because of the recent cyclone.
"Despite a healthy growth in workers' remittances, the trade deficit widened in Q1 FY08 as a result of robust import growth and a negative export growth relative to the corresponding quarters of FY07." the Quarterly said.
"With the casual factors underlying the decline in readymade garment (RMG) exports taken care of, it is likely that export growth would bounce back to its trend level and Bangladesh would be able to maintain reasonable external sector stability through materialising its good prospects of exports, ensuring the present healthy growth in inflow of remittances, and maintaining a strong foreign exchange reserve position," it noted.
The Bangladesh Bank (BB) has started assessing the impact of cyclone Sidr on the country's overall balance of payments (BoP) situation, official sources said.
The cyclone will lead to imports of a large quantity of food grains, construction materials and capital machinery to meet the growing demand in the local market.
"We have started estimation of the effects of cyclone Sidr on the overall balance of payments that will help to know the overall position of the economy by the end of this fiscal," a BB senior official told the FE Saturday.
Two high officials are working to make a projection of the overall balance of payments situation after two successive foods, followed by cyclone, the official added.
Meanwhile, the country's overall balance of payments continued to maintain a surplus position despite a deficit in the current account balance during the first quarter (Q1) of the current fiscal.
The overall balance showed a surplus of US$203 million during July-September period of the fiscal 2007-08 (FY08) against the surplus of $133 million of the corresponding period of the last fiscal, according to the central bank statistics.
The current account balance moved, on the other hand, to a small deficit amounting to $23 million in Q1 of FY 08 as against strong surpluses of $445 million in the corresponding period of the previous fiscal.
"This has happened despite a healthy surplus in current transfers of $1.808 billion that includes an inflow of workers' remittances of $1.629 billion representing a growth of 22.5 per cent over the first quarters of previous fiscal," the central bank said in its Bangladesh Bank Quarterly for July-September 2007.
However, the surplus was offset by a widened trade deficit rose to $1.167 billion and negative services and income accounts amounting to $389 million and 275 million respectively.
On the other hand, the capital and financial accounts maintained a reasonable surplus of $271 million in the Q1 against a deficit of $96 million in the same period of the previous fiscal, the data showed.
"The current account deficit may come down in the near future due to higher inflow of remittances and an upward trend in the overall export performance," another BB official said.
He also said the overall balance of payments is likely to improve further as the country is set to receive foreign aid and foreign loans because of the recent cyclone.
"Despite a healthy growth in workers' remittances, the trade deficit widened in Q1 FY08 as a result of robust import growth and a negative export growth relative to the corresponding quarters of FY07." the Quarterly said.
"With the casual factors underlying the decline in readymade garment (RMG) exports taken care of, it is likely that export growth would bounce back to its trend level and Bangladesh would be able to maintain reasonable external sector stability through materialising its good prospects of exports, ensuring the present healthy growth in inflow of remittances, and maintaining a strong foreign exchange reserve position," it noted.