Wednesday Morning Briefing For Businesses

Hello everyone, Good morning. We want to start the day with good news for the scheduled banks of Bangladesh that may able to expand their business through boosting investment following the latest decisions of the central bank.  

Under the revised decision, the banks' advance-deposit ratio (ADR) remains unchanged at 85 per cent for all the conventional banks and at 90 per cent for the Shariah-based Islamic banks. 

As a result, more than 40 scheduled banks, out of 58, will be able to invest around BDT 160 billion in different sectors, including the share market, as the banks have already brought down their ADR to 83.50 per cent in line with the Bangladesh Bank (BB)'s previous instruction.

The central bank earlier re-fixed the ADR at 83.50 per cent and 89 per cent for the conventional banks and the Islamic banks respectively. 

These rates were scheduled to come into effect from September 30. 

Banking community welcomed the BB’s latest move, saying that it will help them increase credit growth, particularly to the private sector, in the near future. 

On the global front, the Fed is expected to cut interest rates for the second time in a decade on the day and also point to some improvement in the US economy.

But Fed Chairman Jerome Powell is unlikely to deliver the message markets want to hear on plans for future rate cuts, the CNBC reported. 

“He’ll underwhelm everyone and not overwhelm anyone,” said Diane Swonk, chief economist at Grant Thornton. She expects a cut of 25 basis point, taking the fed funds target rate range to 1.75 to 2.0 per cent, following the last quarter point cut on July 31.

On the other hand, Indian government is considering another ‘booster dose’ to revamp economy. The finance ministry of India is now working on one more booster dose to give a leg-up to the economy that has hit over six-year low of 5.0 per cent. 

The blue print for the stimulus is ready that would be announced by Finance Minister Nirmala Sitharaman in the next few days, according to media reports. 

Meanwhile, stocks in Asia Pacific were little changed in Wednesday morning trade as investors await the Fed’s interest rate decision, set to be released later stateside. 

Oil price drops 5.0 per cent one day after historic surge as Saudis signal output to return to normal soon.  

Brent crude futures, the international benchmark, dropped 6.55 per cent or $4.52, to $64.46 per barrel on Tuesday. The contract soared as much as 19.5 per cent on Monday to $71.95 per barrel. Have a nice day.

Siddique Islam has been working for the Financial Express (FE), the country's lone financial daily, published from the capital Dhaka as a Special Correspondent since 2003.

He is also working with the SPORTSWEAR INTERNATIONAL of Germany as a contributing correspondent since 2013 and occasionally contributes to US’s Apparel Magazine and Rivet, a publication of Sourcing Journal Media, LLC. 

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