The New Nation - Internet Edition

Staff Reporter

As a precautionary measure to meet the increased import payments in the days to come Bangladesh Bank would hold tight the present level of foreign exchange reserve.

As of Tuesday, the foreign exchange reserve was US$ 5.6 billion, which is equivalent to import payments for three months.

"We will have to spend the reserve cautiously as we will have to meet increased payments for import of food, capital machinery and power plants," Central Bank Governor Dr Salehuddin told newsmen replying to a question after a meeting with the CEOs of financial institutions.

The Governor was asked about borrowing of US$ 220 million from the International Monetary Fund (IMF) as BoP (Balance of Payment) support despite a comfortable reserve position.

Dr Salehuddin said the IMF loan would help avert unexpected pressure on the BoP as the country is now going through huge import pressure. The bi-monthly payment of Asian Clearing Union (ACU) also increased substantially, he added.

Replying to another question, he said the government has got better offer from Standard Chartered Bank than the Islamic Development Bank (IDB) to take a loan of US$ 300 million for Bangladesh Petroleum Corporation (BPC).

Turning to the meeting with top officials of financial institutions (FIs), the Governor said two FIs have provision shortfall against their classified loans while the classified loans of eight FIs have increased.

The Central Bank would hold separate meetings with the individual banks to overcome the problem, he added.

He said the meeting decided to form a committee to look into the delay in issuing IPOs of seven FIs in the capital market.

The committee will be formed with representation from Bangladesh Bank, the Securities and Exchange Commission (SEC), the Registrar of Joint Stock Companies and Firms, and the association of the FIs.

The meeting was told that the IPOs of the FIs could not be issued due to some complexities raised by the SEC and the Registrar of Joint Stock Companies and Firms.