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A theory is appropriate as long as it fits into the fact; when a theory doesn't fit in the fact, it's wise to walk with the fact.

Wednesday, September 12, 2012

Status of IMF conditions

An International Monetary Fund (IMF) will visit Bangladesh from today for two weeks to review the implementation status of its conditions before releasing the second installment ($141 million) by November of its three-year Extended Credit Facility (ECF) program.

Rejaul Karim Byron writes on this issue. It seems that the government is trying to come out from some of the conditions that IMF previously set (or, the government will request IMF to relax those conditions); on the other hand, IMF is trying to set new conditions (e.g., no hard-term borrowing beyond $1.0 billion). Among the government requests, increasing the exposure limit of commercial banks in the stock market to 40.0% of bank's total capital instead of current limit of 25.0%.

What does it indicate? Without resolving the prevailing capital constraints in the banking system, the government is again going to allow commercial banks into stock market business. Or, the government is trying to help banks to take back their significant amount of capital that were invested in the stock market and had to leave as it is before stock market crash in December 2010. Is the government trying to help banks to resolve their accounting crisis, or trying to revive the stock markets through involving commercial banks into its daily activities? What's the implication for future stock market activities of such decision?    

Tuesday, September 11, 2012

BEA Conference

Bangladesh Economic Association (BEA) is going to organize a three-day conference with the theme 'Global Economy and Vision-2021' to be held during 13-15 September. Mr. Asjadul Kibria writes on the current economic perspective, prospects on the basis on new global economic development and its relation with this conference.

Link of the report.