Bangladesh’s forex reserves cross $44bn

[bluesky]

@bluesky is talking about import bills there. I think he is projecting the total import bill for FY 2021-2022 to be $80 billion. It might be even higher.
"Bangladesh Bank data showed that the country in February this year was capable of paying import bills for 6.44 months when its foreign exchange reserve was $45.95 billion."

Bangladesh forex reserve dwindling amid high import bills

Bangladesh’s capacity to pay import bills has deteriorated at an alarming rate amid the fall of the country’s foreign exchange reserve in recent months against an unusual surge in imports. The country’s foreign exchange reserve...

www.newagebd.net

If we extrapolate that over 12 months, the total import bills for 2021-22 might exceed 85 billion.

Bangladesh's import bills rise by 54% in 1st 5 months of this fiscal

Get updates on Bangladesh's import bills rise by 54% in 1st 5 months of this fiscal and more news related to textile industry at Fibre2Fashion

www.fibre2fashion.com

An excerpt of the link above:

"Bangladesh’s import payments have surged by 53.74 per cent year on year to $30.3 billion between July and November—the first five months of fiscal 2021-22, according to statistics from Bangladesh Bank".

Thanks for tagging me. Please open the link to see the entire news of import data for the first five months of this fiscal. By interpolation, I get about $73 billion for the entire current fiscal.

However, an import surge does not subside immediately. Rather, it keeps on rising.

So, I believe the import bill will reach $80 billion this fiscal. I may be wrong, though!! This surge in import has caused the weakening of Taka which I believe is natural and also healthy.

The news also says there is a surge in the import of capital goods (machinery), as well. It is positive because the machines will keep on producing wealth of the country for decades.

So, it is good for the future.

 

[Bilal9]

Bangladesh's import bills rise by 54% in 1st 5 months of this fiscal

Get updates on Bangladesh's import bills rise by 54% in 1st 5 months of this fiscal and more news related to textile industry at Fibre2Fashion

www.fibre2fashion.com

An excerpt of the link above:

"Bangladesh’s import payments have surged by 53.74 per cent year on year to $30.3 billion between July and November—the first five months of fiscal 2021-22, according to statistics from Bangladesh Bank".

Thanks for tagging me. Please open the link to see the entire news of import data for the first five months of this fiscal. By interpolation, I get about $73 billion for the entire current fiscal.

However, an import surge does not subside immediately. Rather, it keeps on rising.

So, I believe the import bill will reach $80 billion this fiscal. I may be wrong, though!! This surge in import has caused the weakening of Taka which I believe is natural and also healthy.

The news also says there is a surge in the import of capital goods (machinery), as well. It is positive because the machines will keep on producing wealth of the country for decades.

So, it is good for the future.

@bluesky bhai it is my opinion that although most of the import bill went to buying enhanced-priced energy sources (including natural gas), a large portion of it also went to buying capital equipment. So not all of it is bad news.....

 

[mb444]

Bangladesh's import bills rise by 54% in 1st 5 months of this fiscal

Get updates on Bangladesh's import bills rise by 54% in 1st 5 months of this fiscal and more news related to textile industry at Fibre2Fashion

www.fibre2fashion.com

An excerpt of the link above:

"Bangladesh’s import payments have surged by 53.74 per cent year on year to $30.3 billion between July and November—the first five months of fiscal 2021-22, according to statistics from Bangladesh Bank".

Thanks for tagging me. Please open the link to see the entire news of import data for the first five months of this fiscal. By interpolation, I get about $73 billion for the entire current fiscal.

However, an import surge does not subside immediately. Rather, it keeps on rising.

So, I believe the import bill will reach $80 billion this fiscal. I may be wrong, though!! This surge in import has caused the weakening of Taka which I believe is natural and also healthy.

The news also says there is a surge in the import of capital goods (machinery), as well. It is positive because the machines will keep on producing wealth of the country for decades.

So, it is good for the future.

You are so dense its unbelievable..... you dont even understand what you read..... $30bn import bill is year on year meaning the last rolling year.

You can not extrapolate like that.... BD can not spend $80bn...it does not have the liquidity... the entire economy will collapse.

Little of the import bill is a result of government expenditure. Most of its from the private sector. If it came down to it BoB simply wont issue LoC.

 

[salute]

You are so dense its unbelievable..... you dont even understand what you read..... $30bn import bill is year on year meaning the last rolling year.

You can not extrapolate like that.... BD can not spend $80bn...it does not have the liquidity... the entire economy will collapse.

Little of the import bill is a result of government expenditure. Most of its from the private sector. If it came down to it BoB simply wont issue LoC.

Do you not even read?

In July-February of FY22, the country’s imports skyrocketed by $17.31 billion to $54.38 billion from $37.07 billion in the same period of FY21

It will cross $70 billion for the whole year.

GOB will borrow the current acccount deficit from markets or pay them out of your forex reserves.

the country's current-account balance deteriorated further, hitting an 'all-time high' at $12.83 billion in July-February of FY22

This will hit about $15 billion for the whole year. GOB will borrow this amount from the markets or pay off from its forex reserves. And don't forget whatever they are borrowing for wasteful/fanciful infrastructure in dollars. So about $15 billion of additional foreign debt in just 1 year.

And most important measure you need to track is this.

Bangladesh's debt service to revenue ratio rocketed to 81.2 per cent in the last fiscal year amid lower tax collection and higher borrowing, according to the International Monetary Fund.

The escalated level of the debt service to revenue ratio means if the government earns Tk 100 in taxes, it has to spend more than Tk 81 to pay off loans.

You pay off debt from your revenue not from made up gdp figures.

Bangladesh revenues of less than 3 trillion taka is absolutely shameful and makes us all doubt it's growth figures.

And obviously stupid fan boys will not care.

@bluesky is right, Bangladesh is quickly going the Pakistan way.

 

[bluesky]

@bluesky bhai it is my opinion that although most of the import bill went to buying enhanced-priced energy sources (including natural gas), a large portion of it also went to buying capital equipment. So not all of it is bad news.....

Thanks. And this is what I wrote in the last paragraph of my last post. The news I have posted says the capital machinery import surged by 30%. What a good news! This investment will produce wealth in the country for decades.

We can expect similar expenditures on capital goods in the future. If this happens continuously, no can stop the economic development of the country.

Farmlands and machines/ factories produce wealth. Most other activities are in relation to these two big sectors.

 

[bluesky]

You pay off debt from your revenue not from made up gdp figures.

@bluesky is right, Bangladesh is quickly going the Pakistan way.

However, BD imports of capital machinery has also increased by 30% that will be producing wealth in the coming decades. If this trend continues, the coming difficulties will be overcome and the balance of trade will be positive. Well, this is what I hope.

During this difficult time of slowly switching to manufacturing, any country needs helps from donor organizations/ countries. And BD is still trusted by them.

Moreover, there are talks of Japanese investments to be materialized when the Matarbari deep seaport starts functioning.
Saudi groups are also showing interest to invest. Same is with South Korea.

So, the negative balance of trade curve will change to positive, hopefully. And, if this trend continues, we will not be following the Pakistani or SL footsteps. The only thing the govt needs now is to slow down in investing in the physical infrastructure by borrowing dollars.

 

[mb444]

Do you not even read?

In July-February of FY22, the country’s imports skyrocketed by $17.31 billion to $54.38 billion from $37.07 billion in the same period of FY21

It will cross $70 billion for the whole year.

GOB will borrow the current acccount deficit from markets or pay them out of your forex reserves.

the country's current-account balance deteriorated further, hitting an 'all-time high' at $12.83 billion in July-February of FY22

This will hit about $15 billion for the whole year. GOB will borrow this amount from the markets or pay off from its forex reserves. And don't forget whatever they are borrowing for wasteful/fanciful infrastructure in dollars. So about $15 billion of additional foreign debt in just 1 year.

And most important measure you need to track is this.

Bangladesh's debt service to revenue ratio rocketed to 81.2 per cent in the last fiscal year amid lower tax collection and higher borrowing, according to the International Monetary Fund.

The escalated level of the debt service to revenue ratio means if the government earns Tk 100 in taxes, it has to spend more than Tk 81 to pay off loans.

You pay off debt from your revenue not from made up gdp figures.

Bangladesh revenues of less than 3 trillion taka is absolutely shameful and makes us all doubt it's growth figures.

And obviously stupid fan boys will not care.

@bluesky is right, Bangladesh is quickly going the Pakistan way.

I did read but do not come to your conclusion. BD is coming off a pandemic so the the pent up demands for capital machinery, industrial input fuel etc has caused the deficit to increase. I have provided link to the actual trend of the deficit over long term. BoB will maintain its fiscal discipline.

You people are thinking it the government who is importing stuff randomly. That is not the case, it is the private sector who is buying cotton, machinery etc. To do this they will need to apply for a letter of credit where they deposit money in Taka and BoB converts it to USD and settles the bill.

If there is pressure for spurious non essential import of luxury goods BoB will simply refuse the LoC to control liquidity.

BD does not have the liquidity to sustain $80bn bill. No one is going to lend BD any money, why would they? Who is this market you are talking about? GoB can only borrow in Taka from BD banks. Only converter of Taka to USD is the BoB and they are the only one who holds hard currency reserves in the country.

BD reserves as a % of total debt trend you can find below.

BD reserves as % of total external debt

There is pressure no doubt but as I said fiscal discipline will be maintained in terms of protecting reserves to ensure liquidity.

Your position on debt servicing is accurate. Taken on face value i agree... there is an assumption that economic recovery will offset higher debt servicing pressure, we must wait and see how that pans out. This is something BD needs to takle earlier rather than later. There is no way out other than to increase tax revenue.

However your simple conclusions are inaccurate... that is not how things work. The point was will BD face the same situation as srilanka.... very very unlikely.

 

[Destranator]

You are so dense its unbelievable..... you dont even understand what you read..... $30bn import bill is year on year meaning the last rolling year.

You can not extrapolate like that.... BD can not spend $80bn...it does not have the liquidity... the entire economy will collapse.

Little of the import bill is a result of government expenditure. Most of its from the private sector. If it came down to it BoB simply wont issue LoC.

I don't think he is wrong in that post. Sure, BoB can step in and cock block imports by refusing LoCs for all non-essential imports but that would be an unprecedented move and not something you can account for in a trend analysis.
Realistically speaking, I suspect the govt wpuld pull the plug if the reserves dip below $35 billion.

Do you not even read?

In July-February of FY22, the country’s imports skyrocketed by $17.31 billion to $54.38 billion from $37.07 billion in the same period of FY21

It will cross $70 billion for the whole year.

GOB will borrow the current acccount deficit from markets or pay them out of your forex reserves.

the country's current-account balance deteriorated further, hitting an 'all-time high' at $12.83 billion in July-February of FY22

This will hit about $15 billion for the whole year. GOB will borrow this amount from the markets or pay off from its forex reserves. And don't forget whatever they are borrowing for wasteful/fanciful infrastructure in dollars. So about $15 billion of additional foreign debt in just 1 year.

And most important measure you need to track is this.

Bangladesh's debt service to revenue ratio rocketed to 81.2 per cent in the last fiscal year amid lower tax collection and higher borrowing, according to the International Monetary Fund.

The escalated level of the debt service to revenue ratio means if the government earns Tk 100 in taxes, it has to spend more than Tk 81 to pay off loans.

You pay off debt from your revenue not from made up gdp figures.

Bangladesh revenues of less than 3 trillion taka is absolutely shameful and makes us all doubt it's growth figures.

And obviously stupid fan boys will not care.

@bluesky is right, Bangladesh is quickly going the Pakistan way.

You cannot extrapolate current account deficit for the whole year like that - way too many variables involved. Export growth is decent this year. Remittances started poorly this FY but has started to rebound.
Total forex inflow could exceed $70 billion this year.

 

[MORTICE]

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Of course, trading can be very profitable, but at times you risk literally everything to get a profit. Therefore, trading is a very dangerous job.

 

[salute]

I don't think he is wrong in that post. Sure, BoB can step in and cock block imports by refusing LoCs for all non-essential imports but that would be an unprecedented move and not something you can account for in a trend analysis.
Realistically speaking, I suspect the govt wpuld pull the plug if the reserves dip below $35 billion.


You cannot extrapolate current account deficit for the whole year like that - way too many variables involved. Export growth is decent this year. Remittances started poorly this FY but has started to rebound.
Total forex inflow could exceed $70 billion this year.

So you are saying the current account that is in deficit of $12.73 billion in 9 months will be magically neutered in the next 3 months?

 

[Destranator]

So you are saying the current account that is in deficit of $12.73 billion in 9 months will be magically neutered in the next 3 months?

I am saying it can go either way. Too many variables.

 

[mb444]

So you are saying the current account that is in deficit of $12.73 billion in 9 months will be magically neutered in the next 3 months?

It wont.... BD has had a perennial trade deficit and I suspect this will continue for the foreseeable future until BD starts exporting products where majority of the value addition has been done incountry... so electronics, IT services, etc.

I have put up links to BD trade deficit pattern in an earlier post if you want to see.

I share your concern regarding the absolute value of the deficit even though it has not fluctuated much as a percentage of GDP.

BD really must simultaneously expand export basket, have greater value addition to the product and services we export, widen tax net and apply existing tax rules and cut down on spurious imports.

 

[mb444]

Although our @mb444 thinks himself a great talent on this small Earth, he lacks common sense and decency. A complete true copy of a rural uneducated unpleasant peasant of Bangladesh. Note at his tune of writing. Shooting from the hip!!!!

So, don't worry about what he writes back without apprehending the posts he answers to. Please forgive this faggot.

First racism then islamaphobia and now homophobia.

Hindutva turd can only be what he is i guess...

 

[salute]

It wont.... BD has had a perennial trade deficit and I suspect this will continue for the foreseeable future until BD starts exporting products where majority of the value addition has been done incountry... so electronics, IT services, etc.

I have put up links to BD trade deficit pattern in an earlier post if you want to see.

I share your concern regarding the absolute value of the deficit even though it has not fluctuated much as a percentage of GDP.

BD really must simultaneously expand export basket, have greater value addition to the product and services we export, widen tax net and apply existing tax rules and cut down on spurious imports.

Like I said previously debt-to-gdp is means Jack, the relevant measure should be debt-to-revenue.

 

[siegecrossbow]

Not to be a downer but in the current geopolitical climate, it might be wise to cash out some of this forex.