Bangladesh Bank assures BMBA of stock market-friendly policies

Staff Correspondent | Published: 22:01, Jan 19,2020

 
 

Bangladesh Bank governor Fazle Kabir on Sunday assured a delegation of the Bangladesh Merchant Bankers’ Association of capital market supporting policies with a view to addressing the liquidity crisis on the market for its stability.

The central bank governor gave the assurance during a discussion held at the BB headquarters in Dhaka with the BMBA delegation in presence of Financial Institutions Division senior secretary Md Ashadul Islam.

BMBA president Md Sayadur Rahman and its general secretary Riyad Matin, among others, were present at the meeting.

After the meeting, BB executive director and spokesperson Md Serajul Islam told reporters that the central bank would provide policy support and liquidity supply to boost the market.

‘As soon as possible, the central bank will announce a scheme on liquidity supply and policy support to boost the  stock market for the long run in consultation with the finance minister,’ he said.

Serajul said that the meeting discussed the current situation of the stock market, especially the BMBA proposals on fund injection into the market.

The BB governor assured the BMBA team that the required support for ensuring long-term stability of the market would be provided, the BB spokesperson said.

‘We met the central bank governor to discuss our proposal on ensuring adequate liquidity supply in the market,’ Sayadur Rahman said, adding that the BB governor had responded positively and it was working on the proposals.

In October last year, the stockbrokers, especially the banks’ subsidiary brokerage houses, submitted a proposal to the finance ministry seeking Tk 10,000 crore in funds to be injected into the capital market.

Dhaka Bank Securities and EBL Securities are among the 25 signatories to the proposal.

They wanted the funds for a period of six years at a flat interest rate of 3 per cent with two years’ grace period.

The finance ministry has, meanwhile, forwarded the proposal to the central bank for scrutiny.

Speaking about the proposal, the BMBA president said, ‘The central bank assured us that the BB would give feedback to the finance ministry in a positive note on the proposal for Tk 10,000 crore funds for the capital market.’

The market has been in doldrums for the last 11 months and on January 14 the key index of the Dhaka Stock Exchange, DSEX, hit a 56-month low amid a lack of confidence resulting from the government’s apathy towards the market.

Obligated by the market free fall, the government high ups have started making promises to investors that market revival measures would be taken.

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