58

It is illegal to reproduce this material in any format without prior 

written approval of LankaBangla Securities Limited.

MONTHLY MARKET WRAP-UP FEBRUARY 2018

During FY17, the total import payments (C&F) of the country stood 

at USD 47.01 bn, receiving 8.97% growth YoY. This high import 

growth was largely driven by food grains and consumer goods 

imports which grew by 21.15% and 26.85% YoY respectively. 

Import had a significantly high 17.48% YoY growth in Jan’18 

caused  rises in import of capital machinery, food grains, particularly 

rice and wheat,  and continued depreciation of BDT against USD. 

In the seven months of FY18, import (C&F) went up by 25.21% 

compared to same period of FY17.
Remittance
Bangladesh’s total remittance inflow in FY17 was USD 12.76 bn 

as against USD 14.93 bn in FY16, suffering 14.5% de-growth YoY. 

Remittance inflow is showing upward trend in FY18. The first two 

month of FY18 rebounded with double digit growth, it stumbled to 

last five and half years low to USD 853.73 mn in Sep’17. Following 

19.2% de-growth in Sep’17, remittance inflow increased by 27.68% 

YoY in Nov’17 and 21.39% in Dec’17, thanks to the central 

bank’s measures to encourage Non-Resident Bangladeshis to send 

their money home using legal channels. 2018 has seen even more 

impressive growth numbers, 36.69% in Jan’18. and 22.73% in 

Feb’18, largely because of depressed figures in early-2017 periods. 

In first eight months of FY18, remittance inflow was USD 6.93 bn, a 

16.54% YoY increase compared to same period last FY. 
Current Account Balance
The sliding remittance inflow, slow export growth and higher imports 

have dragged current account balance into deficit in FY17 after a 

couple years in surplus. Current account deficit in FY17 stood at USD 

1,480 mn in deficit against USD 4,262 mn surplus in FY16. First seven 

months of FY18 also saw USD 5.347 bn deficit in current account. 

Although both remittance and export growth has come up to positive 

trend, the booming imports are widening the current account deficit. 
Forex reserve went down slightly by 1.6% MoM to USD 32.69 

bn in Jan’18 
Huge import growth, squeezing current account balance put pressure 

on the BDT. The central bank had to sell ~USD 1.5bn in first half of 

FY18 in open market to manage the depreciation trend which caused 

forex reserve to fall at BDT 32.60 bn at the end of Jan’18. However, 

Feb’18 saw reserves increase by USD 0.67bn, the biggest monthly 

increase in six months. The amount is good enough to clear import 

bills for 6.93 months, going by an average monthly C&F import 

value for FY18 so far.
Bangladesh's foreign exchange reserves hit a new record in Aug’17 

and amounted to USD 33.60 bn. Reserve slightly increased by 2.5% 

YoY in Feb’18 due to strong remittance inflow in recent time and stable 

export might have helped to increase reserves in the latest month.
 BDT depreciated marginally against USD in Jan’18
The taka has been depreciating against the US dollar since Jan’17 

mainly due to a mismatch between the demand and supply of the 

US dollar. Remittance and exports, the two major sources of foreign 

currency for Bangladesh, are in the slow lane, while imports have 

increased significantly, which is also adding pressure on Bangladesh 

Bank to keep the exchange rate stable. In Dec’17, Jan’18 and Feb’18, 

Call Money Rates

Monthly Exports (USD mn)

Source: Bangladesh Bank

Source: Bangladesh Bank

4.11%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

Dec-14

Fe

b-

15

Apr-15

Ju

n-15

Aug-15

Oct-15

Dec-15

Fe

b-

16

Apr-16

Ju

n-16

Aug-16

Oct-16

Dec-16

Fe

b-

17

Apr-17

Ju

n-17

Aug-17

Oct-17

Dec-17

Fe

b-

18

12.69%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

 -

 500

 1,000

 1,500

 2,000

 2,500

 3,000

 3,500

 4,000

Feb-16

Ma

r-

16

Apr-

16

Ma

y-

16

Jun-16

Jul-

16

Aug-16

Sep-16

Oct-

16

Nov-16

Dec-16

Jan-17

Feb-17

Ma

r-

17

Apr-

17

Ma

y-

17

Jun-17

Jul-

17

Aug-17

Sep-17

Oct-

17

Nov-17

Dec-17

Jan-18

Feb-18

Monthly Export (USD mn)

YoY Growth (RHS)

Weighted Average Lending and Deposit Rates

Interest Rate Spread (IRS)

Source: Bangladesh Bank

Source: Bangladesh Bank

5.01%

9.42%

4%

6%

8%

10%

12%

14%

No

v-14

Jan-15

Ma

r-

15

Ma

y-

15

Jul-

15

Sep-15

No

v-15

Jan-16

Ma

r-

16

Ma

y-

16

Jul-

16

Sep-16

No

v-16

Jan-17

Ma

r-

17

Ma

y-

17

Jul-

17

Sep-17

No

v-17

Jan-18

Deposit Rate

Lending Rate

4.41%

4.27%

4.25%

4.45%

4.65%

4.85%

5.05%

5.25%

5.45%

5.65%

Sep-14

Nov-14

Ja

n-15

Mar-15

Ma

y-

15

Ju

l-15

Sep-15

Nov-15

Ja

n-16

Mar-16

Ma

y-

16

Ju

l-16

Sep-16

Nov-16

Ja

n-17

Mar-17

Ma

y-

17

Ju

l-17

Sep-17

Nov-17

Ja

n-18

All Banks

PCB

Inflation rate (P2P) had crossed the 6.00% mark for 

the first time in Sep’17, since it went down below 

this level in Jan’16. After hitting to 6.12% in Sep’17, 

general (P2P) inflation went down for the next three 

months as food prices decreased.