BoP situation continues to maintain surplus in Q1
Sunday, 14 December 2008
Siddique Islam
The country's overall balance of payments (BoP) continued to maintain a surplus position during the first quarter (Q1) of the current fiscal mainly due to higher surplus in current account balance.
The current account balance recorded a larger surplus during the July-September period of the fiscal 2008-09 (FY09) because of lower trade deficit and robust growth of inward remittances, officials said.
Pressure on the balance of payments is expected to remain manageable despite the downside risks to export performances, the International Monetary Fund (IMF) said, adding that lower commodity prices are providing significant savings on imports of food and fuel.
"...The balance of payments is expected to remain in small surplus in FY09, but downside risks on the export side suggest that a need for flexibility in exchange rate policy may get stronger," the Washington-based multilateral funding agency said in its a aide memoire that has been submitted to the authorities concerned of the government.
"The macroeconomic data indicates that the country's overall economic performances are still in right track despite the global financial crisis," a senior official of the Bangladesh Bank (BB) told the FE Saturday.
The official also said: "We expect that the existing scenario in overall balance of payment would continue in the near future following falling trend in prices of commodities in the international market."
The overall trade deficit rose to $1.356 billion during the period from $1.182 billion during the corresponding period of the previous fiscal.
During the period, export earnings stood at $4.355 billion against the import payments of $5.711 billion, according to the central bank statistics.
Meanwhile, the overall inflow of remittances crossed $2.0 billion in the first quarters of the current fiscal, registering a 43.99 per cent growth over the corresponding period of the previous fiscal.
The country received $2.34 billion during the period under review against $1.62 billion in the same period of the previous fiscal, the BB's data showed.
"Despite deficit in the trade balance current account balance recorded a larger surplus of $366 million during July-September, 2008 compared to the surplus of $99 million in the same period of 2007 due mainly to larger current transfers of $2.517 billion," the Bangladesh Bank (BB) said in its Major Economic Indicators: Monthly Update-November, 2008.
The overall balance also showed a surplus of $64 million during the period compared to the surplus of $203 million of the corresponding period of the previous fiscal, according to the Monthly Update.
The surplus in the balance of payments dropped as the amount on account of fixing error and omissions was larger and a deficit in financial account was higher during the period. An amount of $311 million was adjusted as error and omissions, and that there was a deficit of %55 million in the financial account, central bank officials explained.
However, the flow of net foreign direct investment (FDI) rose to $395 million during the period from $143 million of the corresponding period of the previous fiscal, the officials added.
On the other hand, the portfolio investment came down to $5.0 million in the period from $47 million of the same period of the last fiscal.
The net receipts of foreign aid recorded higher at $302.49 million during the period against $215.62 million of the corresponding period of previous fiscal, they added.
The country's overall balance of payments (BoP) continued to maintain a surplus position during the first quarter (Q1) of the current fiscal mainly due to higher surplus in current account balance.
The current account balance recorded a larger surplus during the July-September period of the fiscal 2008-09 (FY09) because of lower trade deficit and robust growth of inward remittances, officials said.
Pressure on the balance of payments is expected to remain manageable despite the downside risks to export performances, the International Monetary Fund (IMF) said, adding that lower commodity prices are providing significant savings on imports of food and fuel.
"...The balance of payments is expected to remain in small surplus in FY09, but downside risks on the export side suggest that a need for flexibility in exchange rate policy may get stronger," the Washington-based multilateral funding agency said in its a aide memoire that has been submitted to the authorities concerned of the government.
"The macroeconomic data indicates that the country's overall economic performances are still in right track despite the global financial crisis," a senior official of the Bangladesh Bank (BB) told the FE Saturday.
The official also said: "We expect that the existing scenario in overall balance of payment would continue in the near future following falling trend in prices of commodities in the international market."
The overall trade deficit rose to $1.356 billion during the period from $1.182 billion during the corresponding period of the previous fiscal.
During the period, export earnings stood at $4.355 billion against the import payments of $5.711 billion, according to the central bank statistics.
Meanwhile, the overall inflow of remittances crossed $2.0 billion in the first quarters of the current fiscal, registering a 43.99 per cent growth over the corresponding period of the previous fiscal.
The country received $2.34 billion during the period under review against $1.62 billion in the same period of the previous fiscal, the BB's data showed.
"Despite deficit in the trade balance current account balance recorded a larger surplus of $366 million during July-September, 2008 compared to the surplus of $99 million in the same period of 2007 due mainly to larger current transfers of $2.517 billion," the Bangladesh Bank (BB) said in its Major Economic Indicators: Monthly Update-November, 2008.
The overall balance also showed a surplus of $64 million during the period compared to the surplus of $203 million of the corresponding period of the previous fiscal, according to the Monthly Update.
The surplus in the balance of payments dropped as the amount on account of fixing error and omissions was larger and a deficit in financial account was higher during the period. An amount of $311 million was adjusted as error and omissions, and that there was a deficit of %55 million in the financial account, central bank officials explained.
However, the flow of net foreign direct investment (FDI) rose to $395 million during the period from $143 million of the corresponding period of the previous fiscal, the officials added.
On the other hand, the portfolio investment came down to $5.0 million in the period from $47 million of the same period of the last fiscal.
The net receipts of foreign aid recorded higher at $302.49 million during the period against $215.62 million of the corresponding period of previous fiscal, they added.