The New Nation - Internet Edition

Bangladesh Foreign Exchange Dealers' Association (BAFEDA) recently organized a workshop on "Role of Commodity Derivatives in Financial Risk Management" for the member banks in their conference room at Eastern Commercial Complex. Bangladesh Bank has recently issued a circular on "Hedging price risk of commodities" that would allow banks to help importers of various commodities, such as wheat, cotton, base metals, etc. to hedge their price risk. The keynote speakers at the workshop were Alamgir Morshed, Head of Global Markets, Standard Chartered Bank (SCB) and Zahedul Arefin, Associate Director, Standard Chartered Bank.

The highlights of the discussion were on the concepts of derivatives, the pricing models, role of derivatives as a risk management tool and its prospect in Bangladesh. Major focus was given on the interpretation of the circular issued by Bangladesh Bank, according to which local banks can now provide hedging products to client by doing a back to back transaction with a foreign bank. The session was very interactive with lot of interest from the bank officials to understand how this can help their clients in an environment of rising prices. The workshop was the first such event in this area and all the participants highly appreciated the timely nature of it.