Photo : Messenger
Country’s overseas wealth has taken a hit over the past year with foreign assets dipping by over 13 percent in December compared to the previous year – thereby amounting to an approximately Tk 42,000 crore in decline.
A Bangladesh Bank (BB) report has revealed this concerning trend.
BB sources said that in December 2023, Bangladesh's foreign assets were valued at Tk 277,463 crore, a significant decrease from Tk 319,397 crore recorded just a year ago. This translates to a decrease of Tk 41,934 crore within the span of just one year.
However, there was a slight positive movement in December, with foreign assets experiencing a 4.44 percent uptick compared to November of the same year. In December, the figures stood at Tk 277,463 crore, reflecting an increase of Tk 11,792 crore from November's figure of Tk 265,671 crore.
When asked, Dr. Ahsan H. Mansur, Executive Director of the Policy Research Institute of Bangladesh (PRI), said to The Daily Messenger, "Every country in the world invests in assets abroad, primarily through Treasury Bills and bonds. Governments and central banks globally issue bonds as a means to raise funds and Bangladesh is no exception. Such investments bolster a country's international image.”
While it's positive that Bangladesh's foreign wealth increased in December compared to November, he said, the overall decline in overseas wealth is concerning.
“Caution must be exercised when purchasing assets abroad, as not all Treasury Bills and Bonds yield profitable returns. It's crucial to select assets from countries with stable economic capacities to mitigate the risk of sudden economic downturns threatening the invested wealth."
According to the central bank's report, a significant portion of the assets held abroad, approximately 95 percent, belong to Bangladesh Bank. In December, the foreign assets held by Bangladesh Bank amounted to Tk 248,198 crore, marking a decrease of 16.57 percent compared to the previous year, when it was Tk 297,498 crore. This translates to a decrease of Tk 49,300 crore within one year. However, there was a notable increase of Tk 12,598 crore, or 5.35 percent, in one month, with central bank assets abroad totaling Tk 225,600 crore in November.
On the other hand, the foreign assets of commercial banks were valued at Tk 29,264 crore at the end of December 2023, representing a decrease of Tk 806 crore compared to the previous month. However, compared to the previous year, there was a significant increase of 33.64 percent, with foreign assets of commercial banks amounting to Tk 21,899 crore in December 2022 and increasing to Tk 29,264 crore in December 2023, marking an increase of Tk 7,365 crore.
Meanwhile, domestic wealth in Bangladesh saw a notable increase of 13.42 percent at the end of December 2023. The domestic assets amounted to Tk 193,113 crore, compared to Tk 1,438,571 crore in December 2022, which increased to Tk 1,631,684 crore in December 2023. In November, domestic assets were valued at Tk 1,623,751 crore.
An official from Bangladesh Bank explained to The Daily Messenger that net foreign assets serve as a reflection of a country's economic strength. It indicates whether the country is a debtor or a creditor. These figures are derived by converting various assets held abroad into monetary terms.
“The total wealth is calculated by subtracting the amount of assets held abroad from the amount of assets held by other countries or foreign nationals within Bangladesh. In simpler terms, it's the difference between what we own abroad and what foreigners own in our country.”
Currently, he said, our net wealth in other countries amounts to approximately 3 lakh crore takas. These statistics are crucial in encouraging organisations like the World Bank, IMF, IDB, and other donor organisations to provide loans to our country.
Messenger/Disha
