Monday, 15 July, 2024, Reg No- 06
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EPB, BB post different data on export earnings in July-March

Published : Monday, 24 June, 2024 at 12:00 AM  Count : 195

Export shipment value, as reported by Export Promotion Bureau (EPB) was $40.8 billion in July-March period of FY24 but export receipts through the banking channel reported at$28.6 billion.
 
The $12 billion gap has been reflected in trade credit, a component of financial account of the countrys balance of payment statement, Bangladesh Bank data shows.

It may be partly for unusual delay in export earning repatriation, besides keeping much of it abroad as part of money laundering.  

The widening gap between actual export earning and shipment value has put pressure on the countrys financial account, as it is reflected in trade credit.

The deficit in the financial account reached a record high of $9.2 billion in July-March, compared to $2.9 billion in the same period of the previous fiscal year, according to central bank data.

Earlier in FY23, export receipts fell short of the value of shipments by $12 billion, a historic figure  raising concerns among Bangladesh Bank officials. However, this figure may be even higher by December; by the end of FY24 if the current trend continues.

When contacted, a senior executive of Bangladesh Bank, involved in preparing the balance of payment statement, explained the rising trade gap, saying that they found a significant mismatch between EPB-reported export data and the realisation of export proceeds.

The central bank is now working to find out whether export proceeds are not coming home or if there is a problem with the shipment value reported by the EPB, he said.

When asked for an official comment on this matter, Bangladesh Bank Spokesperson Md Mezbaul Haque did not respond. It appears some exporters were deliberately delaying the repatriation of export proceeds to capitalise on currency devaluation.

At present, trade credit reflects the highest negative value among all components of the financial account statement.

Trade credit became negative $12.24 billion from July-March of FY24, compared to only $3.96 billion in the corresponding period of the previous year.

The central bank data shows trade credit has turned significantly negative from positive since last fiscal year, with a widening gap between export shipment and realised value.

In FY22, trade credit was positive at $311 million and the financial account had a surplus of $16.6 billion. Though the unrealised export value is rising, bankers have been experiencing a general trend in export repatriation.

While common factors such as time lag and export bill discounts can account for mismatches between shipment and realised values, a senior executive at Bangladesh Bank said the recent trend of unrealised export proceeds is unusually high.

The mismatch between export shipment and realised value has been notably noticed over the last two years since FY22, following Bangladesh Banks decision to devalue taka amidst a rising dollar crisis.

In FY22, unrealised export proceeds reached $8.4 billion, with export receipts lagging 16 percent behind the shipment value of $52 billion, as disclosed by Bangladesh Bank data in "Export Receipts of Goods and Services." data

Central bank data demonstrated that unrealised export proceeds ranged from 10 to 12 percent of the export shipment value between FY07 and FY21, with figures varying from $1 billion to $5 billion.

The banker said exporters were permitted to retain export proceeds in their Export Retention Quota (ERQ) account, with a six-month time lag existing between shipment and receipt.

However, he expressed optimism that Bangladesh Banks issuance of a circular to deter gains from devaluation would contribute to reducing the unrealised export value.







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