BB starts preliminary work on country's sovereign rating
Thursday, 9 August 2007
Siddique Islam
The Bangladesh Bank (BB) has started the preliminary work on the country's credit rating within the next six months for the first time to help mobilise funds from overseas sources and foreign investment.
The Ministry of Finance (MoF) has already approved a central bank proposal to complete the country's credit rating, officially known as sovereign rating, the sources added.
"We have sought nominations from different organisations to form a six-member evaluation committee after getting clearance from the MoF in this connection," a BB senior official told the FE Wednesday.
He also said the central bank expected to get the country's credit rating within the next six months.
Sources, however, said the committee will seek expression of interest (EoI) through its website and newspapers, both foreign and local, from reputed international firms for preparing such document.
The committee will first short list the companies, which will submit EoIs to the authorities concerned within the timeframe, the sources noted.
"We will finalise all work in line with the existing public procurement act to ensure accountability and transparency," the central bank official added.
He also said two companies will be appointed to prepare the country's credit rating to ensure accuracy of the document.
Under the proposals, the central bank will provide information to the selected rating agencies to help prepare the rating document.
Currently, Fitch, Moodys' and Standard & Poor's are well known global agencies doing sovereign rating for countries.
A total of Tk 15 million has been estimated as cost for getting the rating done. The fund will be provided initially by the central bank, the sources said.
Meanwhile, the Standard Chartered Bank (SCB), the Citibank N.A, and the Hongkong and Shanghai Banking Corporation (HSBC) Limited have already showed interest to help the authorities concerned to prepare such rating document.
Alamgir Morshed, Director, Head of Global Markets of SCB, Bangladesh, stressed on the importance of credit rating by saying that rating will reflect a unified credit story of Bangladesh to a wide range of international investors, and will allow investors to benchmark Bangladesh against peer sovereigns around the world.
"Bangladesh has made tremendous progress in the socio-economic front compared to any global standards and is recognised for its achievements by opinion leaders and analysts" the SCB official told the FE earlier while explaining the sovereign rating methodology which broadly looks at social, economic and political factors of a country to assess a government's ability and willingness to service its debts.
"With the implementation of Basel II, lenders and investors would be more dependent on external credit ratings for their investment decisions," he added.
The Bangladesh Bank (BB) has started the preliminary work on the country's credit rating within the next six months for the first time to help mobilise funds from overseas sources and foreign investment.
The Ministry of Finance (MoF) has already approved a central bank proposal to complete the country's credit rating, officially known as sovereign rating, the sources added.
"We have sought nominations from different organisations to form a six-member evaluation committee after getting clearance from the MoF in this connection," a BB senior official told the FE Wednesday.
He also said the central bank expected to get the country's credit rating within the next six months.
Sources, however, said the committee will seek expression of interest (EoI) through its website and newspapers, both foreign and local, from reputed international firms for preparing such document.
The committee will first short list the companies, which will submit EoIs to the authorities concerned within the timeframe, the sources noted.
"We will finalise all work in line with the existing public procurement act to ensure accountability and transparency," the central bank official added.
He also said two companies will be appointed to prepare the country's credit rating to ensure accuracy of the document.
Under the proposals, the central bank will provide information to the selected rating agencies to help prepare the rating document.
Currently, Fitch, Moodys' and Standard & Poor's are well known global agencies doing sovereign rating for countries.
A total of Tk 15 million has been estimated as cost for getting the rating done. The fund will be provided initially by the central bank, the sources said.
Meanwhile, the Standard Chartered Bank (SCB), the Citibank N.A, and the Hongkong and Shanghai Banking Corporation (HSBC) Limited have already showed interest to help the authorities concerned to prepare such rating document.
Alamgir Morshed, Director, Head of Global Markets of SCB, Bangladesh, stressed on the importance of credit rating by saying that rating will reflect a unified credit story of Bangladesh to a wide range of international investors, and will allow investors to benchmark Bangladesh against peer sovereigns around the world.
"Bangladesh has made tremendous progress in the socio-economic front compared to any global standards and is recognised for its achievements by opinion leaders and analysts" the SCB official told the FE earlier while explaining the sovereign rating methodology which broadly looks at social, economic and political factors of a country to assess a government's ability and willingness to service its debts.
"With the implementation of Basel II, lenders and investors would be more dependent on external credit ratings for their investment decisions," he added.