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Tuesday, May 29, 2012

Qatar's investment plan with BB

The government of Qatar proposed to invest its currency worth of $1.8 billion in the Bangladesh Bank (BB). If the proposal is accepted, it would be another milestone in the area of financial management of BB.

Link of the news.

Certain issues need to be considered before any decision:

  • Though it is going to increase BB's foreign reserves level, however it should be considered as the liability of the central bank (debt burden);
  • The agreement should include guaranteed clause for pay-back and repatriation clause should be clearly defined;
  • Interest rate, if any, should be market based and internationally comparable;
  • Profit-sharing (or, loss-sharing) clauses should be clearly defined;
  • Long-run investment should be considered for using this amount, no short-run (like Quick-rental power plant) 

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