Central bank to track farm loan by mobile

Bangladesh Bank (BB) has advised banks to preserve the mobile phone
number of each customer in their files to be able to monitor the
distribution of farm loans. The central bank has recently issued a
circular to all banks. The circular also said that if the
agricultural loan customer does not have a mobile phone, his
neighbour's mobile number must be preserved in the customer's file. A
BB official said there were allegations of irregularities in the
distribution of agricultural loans. The provision has been put in
place to promptly detect such irregularities. An inspection team
visiting a bank branch will now able to reach the loan recipient
easily. BB has undertaken the initiative to facilitate proper
distribution of the agricultural loans, an official said. The bank
has appointed 83 new assistant directors and their training scheme
includes training at field level. The 83 new recruits will be trained
to monitor whether or not farm loans are being properly distributed.

Currency rate

Local Market FX Local inter-back FX market was active today. There
was ample liquidity in the market and the USD/BDT rate traded in a
similar range to the previous working day. Money Market Money market
was active on Monday. The market was liquid; and the majority of
deals traded around 1 %. Rates were sightly higher the previous
working day. International Market The dollar hit a two-week high
against the yen on Monday with traders covering short positions as
they debated the timing of tightening in US monetary policy, though
sentiment on the greenback remained bearish.

Asian markets lower

Asian shares fell on Monday as sellers moved in following several
days of gains last week, while traders also sat on the sidelines as
the third- quarter earnings season gets under way. Hong Kong lost 0.93
percent after rising for five consecutive days last week, while
Sydney was 0. 28 percent lower and Seoul dropped 0.42 percent.
Shanghai shed 0.59 percent, pushed by fears of a share glut as
authorities prepare to launch a new board. However, Singapore added
more than one percent on the back of data showing the economy grew
in the past quarter. And India was pushed 2.31 percent higher on
better than expected industrial figures. Tokyo was closed for a public
holiday. HONG KONG: Down 0.93 percent. The Hang Seng Index fell
200.09 points to 21 , 299.35.. SYDNEY: Down 0.28 percent. The
S&P/ASX 200 dropped 13.1 points to close at 4 ,739.8. SHANGHAI: Down
0.59 percent. The Shanghai Composite Index, which covers both A and
B shares, lost 17.23 points to 2 , 894.48. Banks started well on the
Huijin buy-up but short-term investors later booked gains. SEOUL:
Down 0.42 percent. The KOSPI ended down 6.98 points at 1 , 639.81.
SK Energy fell 9.9 percent to 113 ,500 won and S- Oil dropped 1.1
percent to 61 ,000. TAIPEI: Up 0.37 percent. The weighted index rose
27.92 points to 7 , 599.88. SINGAPORE: Up 1.05 percent. The Straits
Times Index rose 27.96 points to 2 , 680.47. Singapore Telecom
gained five cents to 3.13 and Singapore Airlines advanced 16 cents
to 13.90. BANGKOK: Up 0.67 percent. The Stock Exchange of Thailand
gained 4.99 points to close at 751.86. KUALA LUMPUR: Flat. The Kuala
Lumpur Composite Index lost 0.49 points to 1 , 233.33. Second
largest banking group CIMB lost 1.5 percent at 12.04 ringgit while
leading investment holdings company Tanjong shed 3.4 percent at
3.46. JAKARTA: Down 0.72 percent. The Jakarta Composite Index lost
17.71 points to 2 , 456.68. MANILA: Down 0.40 percent. The composite
index gave up 11.81 points to close at 2 , 930.97. MUMBAI: Up 2.31
percent. The 30- share Sensex rose 384.01 points to 17 , 026.67.

BB moves to mop up liquidity Reverse repo rate down 4 points

Bangladesh Bank (BB) has moved to resume reverse repo operations
after a brief lull -- to take excess liquidity off the banking sector
-- but cut its interest rate by 4 percentage points. After remaining
quiet on the matter for about seven months, the central bank
announced the new plans. The banking sector is currently witnessing a
liquidity glut of about Tk 38 ,000 crore, up from nearly Tk 35 ,000
crore in June. From today, BB will offer a 2.5 percent interest
rate for reverse repo, down from 6.5 percent in March. BB officials
said the reverse repo operations will encourage banks to take part in
auctions as the reduced rate is still higher than the present call
money rate, now hovering around 1 percent amid droopy demand for
money. BB that aims to pin inflation at 6.5 percent for fiscal
2009-10 , reduced the interest rate on a lending instrument -- repo
-- by 4 percentage points to 4.5 percent -- keeping a door open for
the banks to seek loans in times of need. BB has moved to resume
short-term money market instrument operations, as monthly inflation
edged up. In July, point-to-point inflation rose to 3.46 percent from
2.25 percent a month ago. Officials, referring to excess liquidity in
the banks, said some banks are extending consumers credit because of
poor demand for loans in the productive sector. "It may cause a rise
in inflation due to a rise in demand," a BB official said. Referring
to the present call money rate, he said as demand for money in the
banking sector remains low, "it will encourage banks to lend money
to the central bank at a rate of 2.5 percent interest". "But if
commercial banks need money in the short term, they will be able to
borrow from the central bank."

BERC GET NEW CHAIRMAN

Syed Yousuf Hossain joined Bangladesh Energy Regulatory Commission
(BERC) yesterday as its chairman, said a statement. The Power, Energy
and Mineral Resources Ministry issued a gazette notification about
the appointment for three years. Earlier, he was the comptroller and
auditor general of Bangladesh. During his 35- year career, Hossain
served different ministries as secretary. He was the chairman of
Bangladesh Textile Mills Association. Hossain also served different
multinational companies.