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Remittances Reach $2.30 Billion in October
Rtv News
03 Nov 2024, 16:43
Photo: Collected
Since the fall of the Awami League government in the student uprising on August 5, the flow of expatriate income or remittances has been on the rise. As a result, remittances to the country reached $2.30 billion in October.
Central Bank Spokesperson and Executive Director Husne Ara Shikha confirmed the matter to the media on Sunday (November 3).
According to the sources of the central bank, remittances of $1.97 billion came in the month of October 2023. Accordingly, remittances have increased by 16.75 percent in one year. As of October 30 BPM6 system, the foreign exchange reserves of the country are 19.87 billion dollars.
In the two months of August and September, $4.63 billion of remittances came to the country. In September alone, remittances came in at $2.40 billion.
Remittance flows increase when the country faces a shortage of foreign exchange needed to import fuel, fertilizers, and commodities needed by the private sector.
According to financial experts and bankers, remittance flows have increased due to two reasons. First, under-invoicing of import bills has reduced significantly. Earlier this process used to divert large sums of money but recently it has been regulated.
Secondly, money laundering through informal channels like hundi has reduced significantly. As a result, the demand for dollars in hundi decreased and more dollars started coming in through government channels.
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All Jewellery Shops to be Closed on 11 October: BAJUS
On the occasion of Durga Puja, all jewellery shops in the country will be closed on Friday (October 11).
Bangladesh Jewelers Association (BAJUS) informed this in a circular on Tuesday (October 8).
It is said that as usual on the occasion of Autumn Durga Puja, BAJUS has decided to close all jewellery establishments across the country including the capital Dhaka, on Ashtami Puja on October 11.
According to the announcement of BAJUS, all jewellery associations in the country will be closed on October 11.
Incidentally, the country's market is currently selling 22-carat gold at Tk1,37,449. Tk1,31,197 per 21 carat, Tk1,12,453 per 18 carat, and Tk92,286 per traditional method gold.
Apart from this, the selling price of gold has to be compulsorily added with a government-mandated 5 percent VAT and BAJUS-mandated minimum wage of 6 percent. However, the wages may vary depending on the design and quality of the jewellery.
The price of gold has been adjusted 42 times in the country's market so far this year. Where the price has been increased 25 times, and reduced 17 times. In 2023, the price was adjusted 29 times.
Trade Deficit Shrinks by 10% in July-August
Major Highlights:
Trade Deficit Decreases by 10%: The trade deficit in July-August of the 2024-25 fiscal year fell to 2.75 billion USD, down from 3.04 billion USD last year.
Export Growth and Reduced Imports: Export earnings rose by 2.5%, while import costs decreased by 1.2%, contributing to the reduced deficit.
Positive Current Account Balance: A rise in remittances helped turn the current account balance positive, with a surplus of 111 million USD, compared to a 610 million USD deficit last year.
In the first two months of the current fiscal year, the country's trade deficit has decreased by nearly 10% compared to the same period of the previous fiscal year.
According to the latest data from the central bank, the trade deficit in July-August of the ongoing 2024-25 fiscal year stood at 2.75 billion USD. In the same period of the previous fiscal year, the deficit was 3.04 billion USD. In other words, the trade deficit decreased by 290 million USD this year.
The Bangladesh Bank reported that this was made possible due to reduced import costs along with an increase in exports.
According to the Bangladesh Bank's data, compared to the same period of the previous year, import costs have decreased by 1.2% to 9.91 billion USD. Meanwhile, export earnings have increased by 2.5% to 7.16 billion USD in the first two months of the current fiscal year, compared to the same period last year.
Another significant factor balancing import costs is the increase in remittances over the past two months, which has led to a positive current account balance for the country.
Moreover, from July to August, the current account surplus reached 111 million USD. In the same period of the previous fiscal year, there was a deficit of 610 million USD.
However, the financial account remains negative. The deficit decreased to 145 million USD in July-August, compared to 1.33 billion USD during the same period last year.
Global Oil Prices Plunge Sharply
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.
Mass Business Shutdowns Spark Nationwide Alarm
The news is alarming. Over the past two months (August and September), around 150 companies from both domestic and international groups, including City Group, BSRM, and US-Bangla, have decided to shut down their operations. This will put the jobs of hundreds of thousands of people at risk, while also damaging the national economy.
According to information from the companies, they are closing permanently based on decisions by their boards of directors. Around 160 companies are already in the process of shutting down. The list of closures includes both small enterprises and large corporations. These companies, registered with the Registrar of Joint Stock Companies and Firms (RJSC), come from both product and service sectors. Additionally, some companies that registered with plans for new investments are now on the closure list.
Data from the RJSC shows that 128 companies closed down in the last five months (May to September). Of these, a record 46 companies shut their doors in August alone, followed by 26 in September. Between July and September, a total of 83 companies ceased operations.
It has been reported that the number of closures began to rise in July, the first month of the current fiscal year. Government data indicates that 16 private companies closed in June, followed by 21 in July.
Recently, political instability and the impact of floods have caused severe damage across various sectors, particularly in industry, tourism, agriculture, and services. In addition, labor unrest in the ready-made garment (RMG) sector—one of the country's top exports—is causing further instability. If the situation does not improve, business owners may face even more difficulties.
Companies Closing Permanently
According to the information provided by the companies, based on board decisions, many businesses are shutting down permanently. Around 160 companies are already in the process of closure. These include both small businesses and large corporate entities, spanning both product and service sectors. Some companies that had recently registered for new investments are also shutting down.
The Registrar of Joint Stock Companies and Firms (RJSC) reports that 128 companies closed in the last five months (May to September), with August alone witnessing a record 46 closures, followed by 26 in September. During July-September, 83 companies ceased operations.
The trend began in July when 21 companies closed, compared to 16 in June.
Causes of Business Shutdowns
Political instability and floods have severely affected various sectors, particularly industry, tourism, agriculture, and services. Additionally, labor unrest in the ready-made garment (RMG) sector—one of the country’s top exports—has created further uncertainty. If the situation does not improve, businesses will face even greater challenges.
Domestic Companies Shutting Down
City Group: Shutting down 30 companies, including City Hair Oil, City Seed Crushing Industries, City Condensed Milk, Shampa Sugar Industries, City Biscuit, and several oil mills. The group has appointed a liquidator, G.K. Rajbongshi, who called for an Extraordinary General Meeting (EGM) in September for closure proceedings.
US-Bangla Group: Closing five companies, including US-BD Security Services, US-Bangla Furniture, and US-Bangla Pharmaceuticals. Liquidators have been appointed following their EGM in September.
BSRM Group: Appointed a liquidator for its Recycling Industries division.
Other Companies: Hospitals like Asmat Ali Khan Central Hospital, healthcare companies such as Lab Quest, and paper manufacturers like Hosendi Paper Mills are also shutting down. Additionally, firms from diverse sectors—including Esquire Holdings, Intek Greenpack, and Urban Fit Properties—are winding up operations.
Foreign Companies Closing Operations
Taiwan-based Maryland Engineering and Singapore-based Weeding Private Company are among those shutting down operations.
South Korea’s Bride Medical & Education Services and India’s Shipcard Marine Bangladesh Ltd. have decided to close voluntarily.
Kite Tech International has also approved its closure during a recent EGM.
Economic and Business Outlook
Mir Nasir Hossain, former FBCCI president, noted that many companies are struggling to recover from pre-existing economic crises. While some businesses have managed to survive, others couldn’t overcome the current challenges. He expressed hope that the business environment will improve soon.
Abul Kasem Khan, vice-chairman of A.K. Khan Group, explained that registering new companies or closing existing ones is a regular part of business. Some companies are shut down to avoid taxes or losses, while others close to reinvest elsewhere. He emphasized that the current economic challenges began three years ago but expressed optimism about future domestic and foreign investments.
Analysts' Perspective
Analysts attribute the closures to inflation, rising production costs, reduced sales, high-interest rates, labor unrest, technical and logistical issues, raw material shortages due to dollar crises, and global conflicts. Political shifts have also limited business opportunities for some companies. However, they believe that the situation will not persist for long and expect improvements in the near future.
This report reflects the growing trend of business closures, driven by both internal and external challenges. October is expected to continue this pattern, with more companies planning EGMs to formalize their shutdowns.
Gold Prices Soar in Bangladesh As Well As World Market
A new history has been created in the price of gold, breaking all previous records in the world market. For the first time in the world market, the price of one ounce of gold exceeded 2,711.19 dollars. As such, the price of this precious metal can rise and create new records in the country's market at any time.
On Friday (October 18) at 12:00 pm, the price of gold in the spot market was at $2,711.19. The price rose $18.10, or 0.67 percent per ounce in one day.
The US election, the Federal Reserve's interest rate cut, and tensions in the Middle East are now driving gold prices higher in the global market, Reuters reported.
Bangladesh Jewelers Association (BAJUS) determines the price of gold in the country's market. According to the latest prices offered by the organization, the best quality or 22-carat gold per bhori is priced at Tk1,37,453. This is the highest price of gold in the market of the country so far. The price of 21-carat solid gold is Tk1,31,197, 18-carat is Tk1,12,453, and the traditional method is fixed at Tk92,286.
BAJUS Standing Committee on Pricing and Price Monitoring Committee decides to increase or decrease the price of gold on behalf of the organization. A member of this committee said, "The rate at which gold prices are increasing in the world market, the price of gold will have to be increased in the country's market as well. There is no alternative."
He said, "I decided to increase or decrease the price of gold based on the international market as well as the local market."
Gold Prices Make New History in World Market
A new history has been created in the gold prices, breaking all previous records in the world market. For the first time in the world market, the price of one ounce of gold exceeded 2,724 dollars.
The price of gold in the spot market was at 2,724.7 dollars till 5 pm on Friday (October 18). The price of gold has increased by about 13 dollars per ounce in a span of one day.
The US election, the Federal Reserve's interest rate cut, and tensions in the Middle East are now driving gold prices higher in the global market, Reuters reported.
Bangladesh Jewelers Association (BAJUS) determines the price of gold in the country's market.
According to the latest price offered by the organization, the best quality or 22-carat gold per bhori is priced at Tk1,37,453. This is the highest price of gold in the market of the country so far. The price of 21-carat gold is fixed at Tk1,31,197, 18-carat is Tk1,12,453 and the traditional method is Tk92,286 per bhori.
Apparel Industry Currently Stable: BGMEA
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) today said that the country's apparel industry is currently stable after going through a challenging period.
"Buyers have their confidence in the apparel industry of Bangladesh," said BGMEA President Khandaker Rafiqul Islam while speaking at a press conference at its office here.
The BGMEA President said, "By the efforts of the BGMEA board and with the cooperation from the government, a task force has been formed by the army to protect the factories and the task force is conducting regular patrols to ensure the security of the garment hubs. BGMEA has also introduced community policing in collaboration with the Army."
He said the BGMEA Board has been able to deal with a tough situation with the cooperation of the government, owners, workers, Bangladesh Army, and law and order forces. In this connection, he on behalf of the BGMEA board expresses gratitude to all, including the Government and the Army.
BGMEA Senior Vice President Abdullah Hill Rakib and other board members were present at the press conference.
Speaking on the occasion, other BGMEA leaders said that some 39 factories, which were affected by the recent labor unrest, were unable to pay the salaries and allowances of their workers for the month of September.
They said the BGMEA has also requested the Ministry of Finance to provide interest-free bank loans at easy terms and conditions to 39 RMG factories, which were affected by the recent unrest so that they can pay September wages.
Besides, the BGMEA said some four million workers in the garment industry have been brought under the TCB fair price product sale scheme.
Asif Mahmud Sajeeb Bhuiyan, Adviser to the Interim Government of the Ministry of Labor and Employment, inaugurated the government’s TCB product sale program for garment workers on October 16, 2024.
The BGMEA has sought the government's support in the following areas to maintain the competitiveness of the industry and thus move the industry forward:
These are- maintaining law and order in the industry; simplifying and expediting customs and port procedures; stopping unnecessary delays in loading and unloading from ships at Chattogram Port; Non-disconnection of factory utilities for the next three months during this critical time of the industry; ensuring that banking sector reforms do not create any negative impact on production and commercial activities; ensuring that if action is taken against any person, his or her businesses are not harmed; forming a task force comprising NBR and Bangladesh Bank to formulate business-friendly appropriate policy support for the industry; ensuring adequate power supply to industry and formulating a sustainable power and energy policy, including rational pricing of power.
Besides, the BGMEA said many factories' ongoing export orders are at risk due to the labor unrest. In such a case, the association demanded non-classification of loans against all types of loans and provision of rescheduling facility as per recently issued BRPD Circular Letter No-44 dated October 14, 2024, by Bangladesh Bank.
The other demands include providing instructions to the concerned authorities for allowing gas supply through cylinders from CNG stations on an urgent basis to continue the normal production activities of ready-made garment factories; taking appropriate measures to ensure that the disposal of "jhut" and other recyclable wastes is free from external influences.
The rate of cash incentives to the RMG industry has been reduced because of the country’s transition from LDCs. This has increased unintended risks and disruptions in the industry.
The BGMEA said there are many examples of middle-income countries offering incentives in different forms to their industries after the LDC transition.
Therefore, considering the importance of the garment sector in the overall economy of Bangladesh, it is important to consider the issue of reinstating the incentives.
The association also called for arranging a safe exit policy for the RMG entrepreneurs, who are unable to sustain their businesses due to various adversities.
Citing that the garment industry has taken a heavy toll over the last two months due to prolonged labor unrest, the BGMEA leaders also demanded to bring those, who would play tricks on industry and economy, to book.
The BGMEA proposed to exempt steel-constructed buildings, built between November 2013 to February 2021, from providing Fire Resistance Rating of Structural Element in light of NTPA, 2013 or BNBC-2020 instead of BNBC-2006.
Because of the proposal, it has been decided that there is no requirement to provide a Fire Resistance Rating of Structural Element for not more than one story and up to 8.0 meters height and unconditionally for not more than three stories or up to 11.0 meters height subject to the compliance of the supplementary regulations of the cod.
Source: BSS
