Nation this week
The European Union will not be sending a full-fledged observation team to observe the forthcoming Jatiya Sangsad election. The EU took this decision based on the recommendations of the pre-election observation team that recently visited Dhaka.
A letter was sent to the Election Commission (EC) and the Foreign Ministry, informing them of the decision by Josep Borrell, the High Representative for Foreign Affairs and Security Policy. In the letter the EU cited its budget crisis for not sending a full-fledged election observation mission, EC Secretary Jahangir Alam said.
The EU letter also stated that it is not adequately clear enough at the moment as to whether all the required criteria will be met during the national election in Bangladesh. Despite this decision, the letter added, the EU is looking into other alternatives to remain with the election process. The EU would still encourage all sorts of efforts to ensure that the election in Bangladesh is free, fair, peaceful and inclusive.
Inflation in Bangladesh is going to cool in the later part of 2023-24 thanks to one external and two domestic factors, the Asian Development Bank (ADB) forecast. Inflation is projected to ease from 9 percent in 2022-23 to 6.6 percent in FY2024, said the Manila-based lender in its Asian Development Outlook (ADO) September 2023. "Though high inflation may persist in the first months of the fiscal year, it is expected that it will come down with some fall in global non-fuel commodity prices, expected higher agricultural production, and the initial tightening of monetary policy under the new framework."
The ADB said the monetary policy is expected to be tightened in FY2024 and will feature a transition from a monetary aggregate targeting framework to an interest rate targeting framework. The Bangladesh Bank has increased the policy interest rate from 6 percent to 6.5 percent, accompanied by a symmetric corridor of 200 basis points for the standing loan and deposit facilities.
The banking sector's lending growth squeezed in the April to June quarter owing to a shortage of liquidity at most banks and their unwillingness to extend credits to borrowers already struggling to pay back, official figures showed. The lending of scheduled banks grew 2.92 percent to Tk 14,46,072 crore in the second quarter compared to the first quarter, according to the data of the central bank.
In April-June of 2022, the lending rose 5 percent to Tk 12,98,659 crore. "The business in the banking sector squeezed due mainly to a higher inflation rate and a pressure on the macro-economic indicators stemming from the Russia-Ukraine war," said Syed Mahbubur Rahman, a former chairman of the Association of Bankers, Bangladesh. The lending growth, however, almost doubled compared to the January to March quarter, when it stood at 1.25 percent. The bulk of the loans and advances went to the trading segment, accounting for 33.84 percent of total loans.
The number of bank accounts in Bangladesh with more than Tk 1 crore in deposit increased further at the end of June 2023 despite persistent economic woes and inflationary pressures. According to Bangladesh Bank data, the number of such bank accounts grew by 3362 to reach 113,554 at the end of June 2023 from 110,192 in March 2023 and 109,946 at the end of December 2022. Out of a total of 14.59 crore bank accounts nationwide, over 10 crore accounts hold less than Tk 5000 each, as per central bank data.
According to the BB, the accounts holding more than Tk 1 crore represent less than 1 percent of the total bank accounts but 43.35 percent of the aggregate deposits. The total deposits in the banking sector stood at Tk 16.87 lakh crore at the end of June while those in the accounts holding more than Tk 1 crore soared to Tk 7.31 lakh crore.
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