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Global Oil Prices Plunge Sharply
International Desk
16 Oct 2024, 09:53
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Global oil prices have fallen by more than 4%.
On Tuesday (October 15), the price of West Texas Intermediate (WTI) dropped by $3.33, or 4.5%, settling at $70.50 per barrel. Meanwhile, Brent crude fell by $3.28, or 4.2%, to $74.18 per barrel.
Both benchmarks hit their lowest levels earlier in the day, with prices dropping by at least $4.
The decline in oil prices is attributed to Israel’s announcement not to strike Iran’s oil facilities, along with forecasts of weak demand.
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WB to Provide $2B to Bangladesh
The World Bank will provide $2 billion to Bangladesh in the current fiscal year 2024-25 revealed by Martin Riser, Vice President of the South Asia region of the World Bank.
He informed this while talking to reporters after the meeting with Finance Advisor Dr. Salehuddin Ahmed on Thursday (September 19).
Martin Riser said, "This is an important time for Bangladesh to do something. Especially a great time to reform. We can assist. However, board approval is required before announcing the amount of financial assistance."
He also said that he can pay $2 billion in several stages by next June. Some are for budget support and some will be given to support the energy sector.
Financial advisor Dr. Salehuddin Ahmed told media persons that budget support, food security, and post-flood issues were discussed in the meeting. They will help in this regard.
He also said that the World Bank will provide funds and technical assistance.
Earlier, after the meeting with the donor organization on September 17, the financial advisor said that in addition to the loan assistance of $1 billion for the reform of the financial sector, a part of the loan assistance will be provided to meet the budget deficit this year.
51 Factories Shuttered Today Amid Unrest in Ashulia
Despite the strict surveillance of the government, owners, and law enforcement agencies in the country's industrial areas, labor unrest continues.
Although the situation is somewhat normal, the garment workers are still holding road blockades, protests, and strikes for various demands. 51 garment factories are closed in Ashulia.
Sarwar Alam, Superintendent of Police of Industrial Police-1, confirmed the closure on Monday (September 23) afternoon.
According to him, workers of a garment factory blocked the road this morning. Later they were explained and the situation was normalized by removing them from the road.
However, 43 factories have been closed indefinitely by the factory authorities. Apart from this, a general holiday was declared for workers in eight factories.
Sarwar Alam also said that no untoward incident happened anywhere. Additional police have been deployed to bring the situation under control and the Army has continued patrolling.
Industry owners say that there is a domestic and foreign conspiracy to destabilize the country's garment industry. After the fall of the Sheikh Hasina government, miscreants started agitation and vandalizing various factories on various pretexts. If this situation continues, the garment sector will face a dire situation.
Director of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA). Mohiuddin Rubel said the instability in the garment industry may be due to the combination of domestic and foreign power with external forces.
According to experts, about 4 million workers are directly employed in the garment industry. And at least two crore people are indirect beneficiaries. If this industry is in danger, a large population will be in danger, and the country's economy will be damaged.
New Guidelines from the Central Bank on Savings Certificates
After the maturity of savings certificates, customers often have to go from bank to bank to withdraw their principal amount, facing various forms of harassment. To free customers from this inconvenience and harassment, the central bank has issued new guidelines. According to these guidelines, from now on, the full principal along with the accrued profit must be deposited into the customer's bank account on the day of the savings certificate's maturity.
On Tuesday, September 24, Bangladesh Bank’s Debt Management Department issued this directive.
The guidelines state that profits or interest from savings certificates sold through the National Savings Scheme Online Management System must be ensured to reach customers on time via checks. Additionally, on the maturity date of the savings certificates, the full amount, including the profit, must be deposited into the customer's designated account through the central bank’s EFT (Electronic Funds Transfer) system, based on the intimation.
Furthermore, it is instructed that the sales and post-sale services of instruments (savings certificates and savings bonds) under the National Savings Scheme, as per the circular issued on June 20, 2022, must be strictly followed.
Garment Industry Rebounds: / Factories Resume as Workers’ Demands Are Met
Most factories have resumed production, bringing an end to the ongoing unrest in the garment industry. The unrest subsided in the industrial area of Ashulia after the workers' 18-point demands were accepted, leading the majority of workers to return to work. However, due to unresolved issues related to wages and other problems, 19 factories remain closed.
On Wednesday, September 25, workers were seen returning to factories in areas such as Palli Bidyut, Baipail, Jamgara, Narsinghpur, Nishchintpur, Zirabo, and Ghoshbagh in Ashulia.
Confirming the workers’ return to work, Mohammad Sarwar Alam, Superintendent of Industrial Police-1 in Ashulia, spoke to the media.
He said that most garment workers have returned to work, though 14 factories in Savar and Ashulia remain closed under Section 13(1) of the Labor Law 2006. Additionally, five factories are observing a general holiday.
Key Highlights:
Production Resumes: Most garment factories in Ashulia have resumed operations after resolving worker unrest
18-Point Demand Accepted: The BGMEA accepted an 18-point demand from workers, leading to the return of a majority of the workforce
Remaining Closures: 19 factories, including 14 under labor law restrictions and 5 observing holidays, remain closed due to wage disputes and financial issues
Worker Return Confirmed: Industrial Police confirmed that workers have rejoined most factories, with production restarting in key units like Ha-Meem, Sharmin, and Nasa
Unresolved Factories: Some factories are still closed due to lack of notice and failure to engage in discussions with workers
Uplifting Sentiment: The resolution brings relief to the industry, with hopes of full recovery as ongoing concerns are addressed
Factory authorities have kept these factories, mostly garment manufacturing units, closed due to financial constraints and unresolved wage-related issues. Among the closed factories are also three to four non-garment units producing leather goods and food products.
He further mentioned that on Tuesday, the BGMEA (Bangladesh Garment Manufacturers and Exporters Association) accepted the workers' 18-point demands, leading to the return of workers from Wednesday morning. Production has resumed in several factories, including Ha-Meem, Sharmin, and Nasa in Narsinghpur, Ashulia. However, some factories remain closed for monitoring the working conditions. Workers at a knitwear factory named Knit Wear resumed work but later held a strike over their demands.
Khairul Mamun Mintu, Legal Secretary of the Bangladesh Garments and Sweaters Workers' Trade Union Center, said that the workers' 18-point demands were accepted during a meeting with authorities yesterday. However, the factory authorities were supposed to post notices at the gates to inform workers of the acceptance of demands and their return to work. The factory owners were also asked to meet with workers to discuss the situation. Workers in factories where the owners were cooperative have already returned to work.
Mintu added that production has not yet resumed in several factories because no notice was given, and the owners have not engaged in discussions with the workers.
10 Banks Agree to Lend to Weak Banks
Ten banks have agreed to provide loans to banks weakened by financial irregularities. Bangladesh Bank will guarantee or provide security for these loans.
This decision was made in a meeting on Wednesday (September 25) with the Governor of the central bank, Dr. Ahsan H. Mansur.
Among the 10 banks agreeing to provide loans are the state-owned Sonali Bank and private banks such as BRAC, Eastern, The City, Shahjalal Islami, Mutual Trust, Pubali, Dhaka, Dutch-Bangla, and Bank Asia.
Regarding the matter, Bangladesh Bank’s spokesperson and Executive Director Husne Ara Shikha informed reporters that if the lending banks request their loaned money back, Bangladesh Bank will repay them within three days. No bank will be allowed to take any extra funds for providing these loans.
She added that Bangladesh Bank will determine how much liquidity support each weak bank will receive, while the interest rates will be agreed upon between the two banks.
The managing directors (MDs) or representatives of these banks attended the meeting with the Governor.
Additionally, five banks have already signed agreements with Bangladesh Bank to receive liquidity support. These are National, Social Islami, First Security Islami, Union, and Global Islami banks from the private sector.
India Lifts Rice Export Ban After 14 Months
India has lifted the ban on rice exports after 14 months. In a statement issued by the country's central government on Friday, it was announced that exporters are now allowed to export all types of rice, except Basmati.
The export duty on rice has also been reduced. Previously set at 20%, the rate has now been lowered to 10%.
India's rice exporters are naturally elated by this decision. Suraj Agarwal, the CEO of one of India’s leading rice export companies, Rice Villa, told Indian media outlet NDTV, "This decision by the government will be a game-changer for India's domestic agriculture sector as well as the international rice market. On one hand, rice prices in the global market will decrease, while on the other, farmers will also benefit."
Key Stats:
Duration of Rice Export Ban: 14 months.
Export Duty Reduction: Previously 20%, now reduced to 10%.
Global Impact of India’s Rice Export Ban:
Rice prices in the international market increased by 11.7%.
This was the highest price surge in 11 years.
India’s Share in Global Rice Trade:
40% of the rice traded globally comes from India.
Top Rice-Producing Countries:
Bangladesh, China, India, Indonesia, Thailand, and Vietnam.
Rice is primarily produced in India’s eastern, northeastern, and southern states. Last year, production in these regions was affected due to insufficient rainfall. In response, on July 20, 2023, the central government of India imposed a ban on rice exports to stabilize the domestic market.
Rice is the staple food for more than 3 billion people worldwide. According to the U.S. Department of Agriculture, six countries—Bangladesh, China, India, Indonesia, Thailand, and Vietnam—are currently the top rice producers in the world.
However, India remains the leading exporter of rice. About 40% of the rice traded in the global market comes from India.
Following India's ban on rice exports, the international market saw a rise in rice prices. According to Reuters, the price of all types of rice increased by 11.7%, marking the highest price surge in 11 years.
$2.40 Billion Remittance Received in September
In September, expatriates sent $2.40 billion in remittances to Bangladesh. Converted to local currency (at a rate of 120 BDT per USD), this amounts to approximately 28,856.40 crore BDT. On average, the country received $80.2 million per day during the month.
This information was revealed in an updated report from the Bangladesh Bank on Tuesday (October 1).
The report states that $2.40 billion in remittances were received in September, compared to $2.22 billion in August, indicating an increase in remittance inflow.
Key Highlights:
Total Remittance: $2.40 billion (approx. 28,856.40 crore BDT)
Daily Average: $80.2 million
Increase from August: Up from $2.22 billion in August
Previous Highs:
June: $2.53 billion
July: $1.91 billion (lowest in 10 months)
August: $2.22 billion
In September, $638.25 million was received through state-owned banks, $109.98 million through specialized banks, $1.65 billion through private banks, and $6.21 million through foreign commercial banks.
Additionally, between September 29 and 30, expatriates sent $291.68 million in remittances. Between September 22 and 28, the country received $478.89 million, while from September 15 to 21, $467.03 million in remittances were received. During the second week of September (September 8 to 14), the remittance inflow was $582.66 million, and in the first week, expatriates sent $584.54 million.
Earlier, in June, remittance inflows stood at $2.53 billion, while in the first month of the current fiscal year (July), remittances dropped to around $1.91 billion—the lowest in the past 10 months.
In August, remittances increased again, with expatriates sending $2.22 billion.
Bankers note that since the beginning of the new government, expatriates have reduced their use of informal remittance channels (like hundi) and are now sending remittances through official banking channels, even if they have to wait in line. This shift has led to a significant increase in the country's remittance earnings.
