BD approved Sovereign Wealth Fund of $10 Billion

[rome333]

But what's wrong if we start building a gold or silver reserve? It is possible for USA to devalue USD so they can pay back their debt cheaply.

If USD is devalued, it will cause inflationary problems in their own economy as US is a net importer. Then they have to raise interest rate which will damage business and demand for $ will pick up from abroad. So $ will raise again. Unless you can prove USD is a worthless paper! Thats way its called free float currency while CHY is not.

 

[Abba_Dabba_Jabba]

Appreciate the move, But is their any source, which can confirm the news ?

 

[rome333]

Appreciate the move, But is their any source, which can confirm the news ?

http://www.thefinancialexpress-bd.c...t-approves-formation-of-sovereign-wealth-fund

 

[TopCat]

But what's wrong if we start building a gold or silver reserve? It is possible for USA to devalue USD so they can pay back their debt cheaply.


That's of insignificant amount.

Gold and silver does not give any return. There are chances that gold and silver loose their value as well.

 

[Shotgunner51]

Foreign Exchange Reserves are the foreign assets held or controlled by the country central bank. The reserves are made of gold or a specific currency. They can also be special drawing rights and marketable securities denominated in foreign currencies like treasury bills, government bonds, corporate bonds and equities and foreign currency loans.

Precisely, reserves assets are managed by central banks and comprised of high liquidity assets. On the contrary, SWF can invest in long-term illiquid assets, say private equity.

 

[Sliver]

Good news! BD will be the first nation in the region to setup a SWF, it means central bank has decided that they have accumulated reserves (which stood at $31.75 billion on 2016 December 14, enough to honour 8 months' import bills) in excess of needs for liquidity or exchange rate management, and now through SWF some reserves can be diversified into assets other than highly short-term liquid assets. I expect BD to continue improve current account, allowing SWF to build up.

I have posted a thread on 2016 Dec 16: https://defence.pk/threads/govt-mulls-5b-sovereign-wealth-fund.466926/#post-9029828

can you please tell me which region you are referring to?

 

[Shotgunner51]

can you please tell me which region you are referring to?

South Asia.

For a list of SWF as of September 2016, please check post#4 on https://defence.pk/threads/new-pivo...worlds-largest-sovereign-wealth-funds.455072/

 

[Samlee]

Congratulations to Our Bangladeshi Brothers

 

[Mage]

Gold and silver does not give any return. There are chances that gold and silver loose their value as well.

Yes. But they are less likely to lose value compared to other currencies.

 

[enquencher]

Bd though being a small country with huge population and limited resources has done pretty well.they are hard working people with vision.thats the reason they are at this level after 1971.they are aleviating poverty slowly n progressing strongly.though being a muslim country they are not into ummah chumma crap..their focus is development.
I dnot agree with the radical bds on pdf...but respect hard work of real bangladeshis.

 

[rome333]

Yes. But they are less likely to lose value compared to other currencies.

Gold value is denominated in USD. So if u buy or sell gold, its gonna be in USD unless you barter. Gold market is also very sensitive to demand/supply and geo political and economic heats. Risk factor is just too high.

 

[bd_4_ever]

Great news! Shows how far we have progressed.

If I am to do an investment, I would preferably go for properties (land will be priority). Gold and silver comes after that. I wouldn't trust any currency and especially not the US dollar.

 

[rome333]

Great news! Shows how far we have progressed.

If I am to do an investment, I would preferably go for properties (land will be priority). Gold and silver comes after that. I wouldn't trust any currency and especially not the US dollar.

Land my friend is generally very il-liquid asset. You can gain a lot with land in BD but its price may fall very sharply like gold or silver. On contrary cash is sth u can always change into other form very quickly!
Cash is King but Dolla is $Bling$Bling$.

 

[Homo Sapiens]

Cabinet approves $10bn sovereign fund

• Asif Showkat Kallol Shohel Mamun
• Published at 05:00 PM February 06, 2017
• Last updated at 08:46 PM February 06, 2017

Bigstock
The government has approved a proposal for launching a Bangladesh Sovereign Wealth Fund of $10 billion, with a view to making the fund useful during periods of emergency.
The approval was given in the regular cabinet meeting held at the secretariat on Monday, with Prime Minister Sheikh Hasina in chair.

After the meeting, Cabinet Secretary Shafiul Alam said the authorised capital will be $10 billion and its primary capital will be $2 billion.

“We have discussed that the fund will be used for big infrastructure projects and multiple purposes, including repayment of any loans taken by the government in dollars,” he said.

The cabinet secretary added that the legal framework for the fund will be fixed later.

He said every year the fund will add $2 billion from the country’s foreign exchange reserves, which currently sits above $32 billion.

According to the proposal, it is expected that the sovereign wealth fund will hit the bond market on July 1, if everything goes as planned.

The government will buy foreign exchange reserves in the local currency and transform it into bonds and treasury bonds.

The bonds will be traded in the Bangladesh Bank ‘s auctions under the existing legal framework of the bond market.
On the first week of 2014, the Finance Ministry decided in principle to issue $2bn-worth of sovereign bonds from 2015, to collect funds for major infrastructure projects like the Padma Bridge.

The plan never saw the light of the day as, two weeks later, Finance Minister AMA Muhith vetoed it in consideration of the low interest rate the sovereign bond market was offering at the time.

Also, in 2011, the government made the move to issue sovereign bonds to raise $500m from the international market to implement development projects, because of poor availability of soft loans from donors. But it abandoned the plan after identifying risks that included appreciation of local currency against the dollar and falls in soft loans from donor agencies the previous year.

In 2014, US-based investment bank Goldman Sachs and German Deutsche Bank AG had offered to raise up to $3bn in funds for the Bangladesh government from the international bond market by issuing sovereign bonds.

Bangladesh is one of the “Next 11” countries identified by Goldman Sachs in 2005 as a fast growing economy.
http://www.dhakatribune.com/bangladesh/2017/02/06/cabinet-approves-10-billion-sovereign-fund/

 

[Russell]

Land my friend is generally very il-liquid asset. You can gain a lot with land in BD but its price may fall very sharply like gold or silver.

My dad bought a 11 katha plot in uttarkhan (around Uttara) in 1981 for BDT 4,40,000. We got offered BDT 6.5 crore for it last year

And it is no different even in rural areas. The only danger with land acquisitions in Bangladesh is land-grabbers. If they grab your land and you've got no one to back you up...you might as well forget you ever owned it.

*Though I agree, it's not something you can just flip on a whim.