Kazi Zahidul Hasan :
The Ministry of Finance has sought the Bangladesh Bank’s opinion over creation of the country’s first ever sovereign wealth fund (SWF) to utilize the excessive idle foreign reserve at the central bank.
The SWF will be created by the central bank’s foreign currency reserve, an official of the Finance Ministry told The New Nation on Friday, preferring anonymity.
The Ministry on Wednesday in a letter to the Bangladesh Bank (BB) Governor sought the opinion on an urgent basis regarding the matter.
“We sought BB’s formal opinion over the issue, as the fund will be created by its foreign reserve,” the official said.
He said the government has taken the move to create a SWF following pile up of excessive foreign reserve at the central bank.
“The government wants to utilize some portion of the idle reserve fund for productive purposes,” he added.
As on December last year, the country’s foreign currency reserves stood at $31.75 billion, which is enough to foot eight months’ import bills.
The official further said, initially, the money of the fund will be financed for the country’s mega development projects.
Earlier, the Finance Division of the Ministry formed a 10-member committee, headed by BB Deputy Governor SK Sur Chowdhury, to evaluate the prospects and viability of creating the fund as well as its pros and cons.
The body recently submitted its report to Finance Minister AMA Muhith giving a positive outline over the formation of the fund.
“Upon receipt of the report, the Minister directed us to go forward with the matter and also asked for BB’s formal opinion to create the fund,” said the official.
Muhith earlier told reporters that the government would form a sovereign wealth fund with an initial authorised capital of $5 billion to finance mega projects.
He also said the sovereign wealth fund is a new concept for Bangladesh and a separate law needs to be passed before formation of the fund.
A proposal for creating the fund will be presented before the Cabinet soon. Once it gives the nod, process will be on to enact the law.
The Foreign Exchange and Treasury Management Department of BB has been asked to prepare the reply based on the subject of the letter. Officials of the Department have already started working on the issue, a senior BB official told The New Nation yesterday.
The Ministry of Finance has sought the Bangladesh Bank’s opinion over creation of the country’s first ever sovereign wealth fund (SWF) to utilize the excessive idle foreign reserve at the central bank.
The SWF will be created by the central bank’s foreign currency reserve, an official of the Finance Ministry told The New Nation on Friday, preferring anonymity.
The Ministry on Wednesday in a letter to the Bangladesh Bank (BB) Governor sought the opinion on an urgent basis regarding the matter.
“We sought BB’s formal opinion over the issue, as the fund will be created by its foreign reserve,” the official said.
He said the government has taken the move to create a SWF following pile up of excessive foreign reserve at the central bank.
“The government wants to utilize some portion of the idle reserve fund for productive purposes,” he added.
As on December last year, the country’s foreign currency reserves stood at $31.75 billion, which is enough to foot eight months’ import bills.
The official further said, initially, the money of the fund will be financed for the country’s mega development projects.
Earlier, the Finance Division of the Ministry formed a 10-member committee, headed by BB Deputy Governor SK Sur Chowdhury, to evaluate the prospects and viability of creating the fund as well as its pros and cons.
The body recently submitted its report to Finance Minister AMA Muhith giving a positive outline over the formation of the fund.
“Upon receipt of the report, the Minister directed us to go forward with the matter and also asked for BB’s formal opinion to create the fund,” said the official.
Muhith earlier told reporters that the government would form a sovereign wealth fund with an initial authorised capital of $5 billion to finance mega projects.
He also said the sovereign wealth fund is a new concept for Bangladesh and a separate law needs to be passed before formation of the fund.
A proposal for creating the fund will be presented before the Cabinet soon. Once it gives the nod, process will be on to enact the law.
The Foreign Exchange and Treasury Management Department of BB has been asked to prepare the reply based on the subject of the letter. Officials of the Department have already started working on the issue, a senior BB official told The New Nation yesterday.
