Central bank's profit falls by Tk14,200cr in FY23
The central bank's profit plummeted by around 95%, or Tk14,247 crore, year-on-year, mainly due to lower gains from foreign exchange.
According to data from the Bangladesh Bank, its operating profit for fiscal 2022-23 stood at Tk15,000 crore, which was Tk29,247 crore in the previous fiscal year.
On Tuesday, the Bangladesh Bank board, presided over by Governor Abdur Rouf Talukder, approved its financial statement for fiscal 2022-23.
Mezbaul Haque, spokesperson for the central bank, told The Business Standard, "A profit of Tk6,000 crore has come from dollar sales and Tk7,000 crore from lending to the government. Besides, it has made a profit of Tk2,000 crore by lending to commercial banks."
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"In FY23, the total expenses of the central bank stood at Tk4,252 crore. Net profit after expenses stood at Tk10,748 crore. Of this, Tk10,652 crore has been deposited in the government treasury," he added.
Bankers said due to the foreign currency floating rate against the taka, there was little difference in the buying and selling rates, due to which the central bank's foreign exchange operating gains were much lower last fiscal year.
They also said the central bank's gains were very high in FY22. The dollar the central bank sold that fiscal year was purchased several years ago, and the profit from dollar sales was higher due to the wide difference in buying and selling rates.
According to the central bank report, the Bangladesh Bank made a profit of Tk6,000 core from foreign currency financial assets in FY23, compared to Tk28,371 core in FY22.
The foreign currency operating gains were only Tk2,605 crore in FY21, central bank data shows.
The central bank built up the country's foreign exchange reserves by buying dollars from banks at a rate of Tk103-109 previously, which was sold at Tk103.50- 109.50 to banks in FY23.
In FY22, the central bank bought the dollar from the market at Tk78-84, and sold it at Tk85–87 to banks.
A treasury official at the Bangladesh Bank said in the outgoing fiscal year, the central bank supplied the highest amount of dollars to the market.
Still, the profit in this sector was low because of the floating rate of the dollar. As a result, the exchange rate gains have decreased.
According to central bank data, the dollar supply to banks in FY23 was $13.58 billion, compared to just $7.62 billion in the previous fiscal year.
The managing director at a private bank told TBS that the central bank lent the highest amount to the government in FY23, which led to the highest profit from the sector. However, the government's debt to the central bank in the previous fiscal year was less.
The government's bank borrowing marked a historic high in the just concluded fiscal year 2022-23 surpassing the budgetary targets as it had to highly depend on banking system for financing amid a revenue shortage and a slowdown in the inflow of foreign funds.
The total borrowing from the banking system stood at Tk1.24 lakh crore at the end of June 2023, higher than the borrowing target of Tk1.15 lakh set in the revised budget for fiscal year 2022-23.
Of the borrowed figure, 80%, or nearly Tk1 lakh crore, was taken from the Bangladesh Bank.
Other decisions made in the board meeting
A Bloomberg terminal will be set up at the central bank to monitor the foreign exchange market and verify the accuracy of import prices.
The board also cancelled Nagad Finance PLC's licence to establish a financial institution.
The meeting also decided that Sonali Bank will now pay the interest on a loan taken from the reserves to buy a plane according to the Secured Overnight Financing Rate (SOFR) as the London Inter-Bank Offered Rate, or LIBOR, has been out of operation.
