Bangladesh may ease investment norms to help RMG sector

10 Dec '12

2 min read

Earnings from the readymade garment (RMG) and all other sectors are expected to get a major boost, as the Government is reviewing its Foreign Exchange Act with an aim to liberalize it to draw more investment in diverse sectors, the Chief Economist of the Bangladesh Bank Dr. Hassan Zaman said in his inaugural address at the Bangladesh Investment Summit in Singapore.

Asian Investor and Finance Asia organized the one-day summit to help Asia’s key wealth funds, public and private pension funds, family businesses and other financial investors to explore trade and investment opportunities in Bangladesh.

Dr. Zaman said Bank of Bangladesh - the central bank of the country - and the security regulators are undertaking a review of the hindrances to foreign investment. Besides, the Government is also planning to release its first international bonds to boost its revenues.

He said they are trying to identify where they can reach over the next one or two decades, and what level of synchronization can be achieved with world financial markets.

The central bank sticks to its goal of sustaining the country’s balance of payments, which necessitates utilizing capital controls to tackle the domestic inflation and other macroeconomic issues. This is also because the country does not have enough foreign reserves that can provide a confidence to freely use the capital, Dr. Zaman said.

The country’s foreign exchange reserves now stand at US$ 12.3 billion, which can only meet the country’s four months’ import requirements. Though, this is an ordinary sum, it is considerably above the US$ 1.6 billion levels where reserves stood a decade ago, he added.

Overall, with a year-on-year rise of 5.93 percent, Bangladesh’s earnings from exports stood at US$ 24.3 billion during last fiscal, the Export Promotion Bureau (EPB) data shows.

Bangladesh made around US$ 19.09 billion in garment exports during last fiscal, and according to the EPB, garment exports have steadily contributed over 75 percent of the country’s overall exports earnings since start of the current decade.

Fibre2fashion News Desk - India

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