Bangladesh Bank prepares sovereign credit rating report to entice FDI

Bangladesh Bank, the central bank, has sought fiscal and economic
data from the finance ministry for preparing a sovereign credit
rating report which should help attract foreign direct investment as
well as boost short- term borrowings for the country's private and
public sectors. The report will help two foreign credit rating
companies appointed by BB to weigh the risks of Bangladesh economy and
the fundamentals of the country's industrial and banking sectors that
should help entice foreign investment into the country, BB sources
said. 'The report is expected to project Bangladesh in a positive
manner for attracting more foreign direct investment in the country,'
said one of the officials who requested anonymity. BB has
requested the finance ministry to provide data including the
non-deposit type of liquid assets and debt servicing performance of
the government, he said. 'Development partners and many foreign
investors consider Bangladesh a risky country… a sound and sovereign
credit rating report will enhance the country's image and help local
financial organisations to tap low-cost borrowings from foreign
sources,' said the official. Bangladesh Bank has formed a contact
team which would keep in touch with the two foreign credit rating
companies—Standard and Poor's and Moody's Singapore Pte Ltd—and
supply them with economic statistics from time to time. BB has
sought statistics on government assets and fiscal history from 1998
to 2008 year as well as planned data for 2009 and projection for
2010. The fiscal data sought for the purpose include breakdown of
revenues, grants and expenditure, transfers of assets of state-owned
enterprises and state-owned banks and debt servicing and detailed
data on government subsides. Bangladesh Bank will pay around Tk 97.3
lakh in the first year and Tk 83.3 lakh in the next year as fees to
the two foreign credit rating companies. Sovereign credit rating
will definitely reduce dependence on the London inter-bank offer rate
and help obtain low-cost funds from foreign sources, former finance
adviser AB Mirza Azizul Islam told New Age. The central bank has
been working since 2007 to prepare a credit rating report for the
country to help mobilise funds from overseas sources and foreign
investment agencies.