facebook Twitter RSS Feed YouTube StumbleUpon

Home | Forum | Chat | Tours | Articles | Pictures | News | Tools | History | Tourism | Search

 
 


Go Back   BanglaCricket Forum > Miscellaneous > Forget Cricket

Forget Cricket Talk about anything [within Board Rules, of course :) ]

Reply
 
Thread Tools Display Modes
  #1  
Old December 2, 2009, 10:00 PM
FagunerAgun FagunerAgun is offline
Banned
 
Join Date: February 18, 2006
Favorite Player: Rafiq and Tendulkar
Posts: 5,636
Default Our 10 Billion Dollars Foreign Currency Reserve

The Governor of Bangladesh Bank has been trumpeting our achievement in 10 billion US dollar reserve that is still growing.

But the Governor fell short of giving any planned strategy of successful transactions without destabilizing our economy and getting the best out of this amount of reserve.

The enemy number one of this reserve is the weakening US dollar; the present value of 10 billion US dollars has already lost a part of it as US dollar has weakened further.

Other countries have diversified their foreign currency portfolios, they have already bought Euros, some even Canadian dollars and some precious gold selling weak and weakening US dollars.

Now the Governor tries to invest part of this reserve in some private banks to get returns which may offset the value lost of this reserve because at this moment we can not buy gold as gold market has already skyrocketed and can fall any time, can not buy other powerful currencies as the value of Canadian dollars and Euros have gone up significantly as other countries like China, Russia and Brazil have already done those transactions, again selling US dollars from their reserves.

Now the question is: will the return from investments in private banks offset the lost value of our reserve because of weakening US dollars?

Some timely transactions in precious metals and other currencies with pro-activeness and foresightedness could have made our reserve more secured and bigger.

I hope they will learn from this missed opportunity and put their trumpet down in the box for now.

Last edited by FagunerAgun; December 2, 2009 at 10:47 PM..
Reply With Quote
  #2  
Old December 3, 2009, 01:35 AM
BANFAN's Avatar
BANFAN BANFAN is offline
Cricket Sage
 
Join Date: March 26, 2007
Favorite Player: Shak-Ash-Tam
Posts: 16,689

Great news. Like to see it going in trillions some day. Atleast the country feels safe to face uncertainities.

World is not sure how long the US $ will be worth holding, recently many emerging economies have started buying large amount gold to replace US $ reserves. We might think of converting of of the reserves to Gold. Incase $ falls sharply, we will have some safety. China & a few others are already talking about an international currency for reserves, instead of US $. Although some economists predict 20-30 years before we can effectively move in to some international currency.
__________________
I'm with Shahbag for fair punishment of all war criminals. Im with Shahbag to stand for fair trials of all Corruption, all murders and social injustices occurred over last 40 years. I'm for a secular, corruption free & Just society in Bangladesh. Spirit of '71
Reply With Quote
  #3  
Old December 3, 2009, 02:38 AM
PoorFan PoorFan is offline
Moderator
 
Join Date: June 15, 2004
Location: Tokyo
Posts: 14,333

I rather would suggest them to buy as much dollars as they can now, because big East Asian economy ( China, Japan, Korea, Taiwan etc. ) hugely depends on strong dollar. Dollar has [almost] hit the bottom of its value already and no way it can remain so or go down for long time. Already Japanese economy got hit by huge export revenue deficiency because of poor dollar exchange rate, so its highly unlikely that the dollar value will remain cheap for long time.

And few moths ago I also read somewhere in newspaper that buying European currencies or gold was in BB's consideration, but not sure if they actually did it. BB or our local banks should gather huge idol Taka in local market and buy dollar as much as they can so that the benefit of exchange rate may come in few weeks later.
Reply With Quote
  #4  
Old December 3, 2009, 05:11 AM
auntu's Avatar
auntu auntu is offline
Cricket Guru
 
Join Date: March 7, 2007
Location: elsewhere
Favorite Player: ZAR
Posts: 9,848

Quote:
Originally Posted by PoorFan
I rather would suggest them to buy as much dollars as they can now, because big East Asian economy ( China, Japan, Korea, Taiwan etc. ) hugely depends on strong dollar. Dollar has [almost] hit the bottom of its value already and no way it can remain so or go down for long time. Already Japanese economy got hit by huge export revenue deficiency because of poor dollar exchange rate, so its highly unlikely that the dollar value will remain cheap for long time.

And few moths ago I also read somewhere in newspaper that buying European currencies or gold was in BB's consideration, but not sure if they actually did it. BB or our local banks should gather huge idol Taka in local market and buy dollar as much as they can so that the benefit of exchange rate may come in few weeks later.
Not a bad call.

Still what the Governor is trying to do with the reserve is one of the few options in his hand. It's a critical juncture of time and I hope and pray IMF and WB's advice would be blown in the wind.
__________________
﴾اَلَاۤ اِنَّ اَوۡلِيَآءَ اللّٰهِ لَا خَوۡفٌ عَلَيۡهِمۡ وَلَا هُمۡ يَحۡزَنُوۡنَ ۖ ۚ‏ ﴿۶۲
"Listen, the friends of Allah shall have no fear, nor shall they grieve" (Yunus: 62)
Reply With Quote
  #5  
Old December 3, 2009, 09:17 AM
FagunerAgun FagunerAgun is offline
Banned
 
Join Date: February 18, 2006
Favorite Player: Rafiq and Tendulkar
Posts: 5,636

Quote:
Originally Posted by PoorFan
I rather would suggest them to buy as much dollars as they can now, because big East Asian economy ( China, Japan, Korea, Taiwan etc. ) hugely depends on strong dollar. Dollar has [almost] hit the bottom of its value already and no way it can remain so or go down for long time. Already Japanese economy got hit by huge export revenue deficiency because of poor dollar exchange rate, so its highly unlikely that the dollar value will remain cheap for long time.

And few moths ago I also read somewhere in newspaper that buying European currencies or gold was in BB's consideration, but not sure if they actually did it. BB or our local banks should gather huge idol Taka in local market and buy dollar as much as they can so that the benefit of exchange rate may come in few weeks later.
This long term strategy is a good idea only if US dollar continues strengthening and in the mean time, we do not do any transactions with other countries like buying goods and services in US dollers, which is impossible.

But there is no sign of strong US dollar because US strategy now is to sell more goods to other countries to offset trade gap and bolster her manufacturing sector, to create employment, they need weak US dollar.

In our situation, as we have to do transactions in US dollars, we are losing in currency appreciation as US doller is getting weak and weaker.

My suggestion is to diversify part of our reserve with a short term strategy to offset the loss of the remainder of the portfolio in US dollars and to make some money as well.

Last edited by FagunerAgun; December 3, 2009 at 09:25 AM..
Reply With Quote
  #6  
Old September 13, 2010, 05:35 PM
FagunerAgun FagunerAgun is offline
Banned
 
Join Date: February 18, 2006
Favorite Player: Rafiq and Tendulkar
Posts: 5,636

Now BB is buying 10 tons of gold.
Had BB bought this amount of gold a couple of years ago, the price could have been under $1000 plus that could have given

1. Higher profit margin
2. Higher risk tolerance
3. More liquidity in the currency market.
4. Could have saved more foreign currency.
5. Less hedging cost, if BB decides to hedge.

It is difficult to understand BB's decision to buy this amount of gold when gold market has already been saturated so much.

Last edited by FagunerAgun; September 13, 2010 at 06:24 PM..
Reply With Quote
  #7  
Old September 15, 2010, 08:33 AM
BANFAN's Avatar
BANFAN BANFAN is offline
Cricket Sage
 
Join Date: March 26, 2007
Favorite Player: Shak-Ash-Tam
Posts: 16,689

Quote:
Originally Posted by PoorFan
I rather would suggest them to buy as much dollars as they can now, because big East Asian economy ( China, Japan, Korea, Taiwan etc. ) hugely depends on strong dollar. Dollar has [almost] hit the bottom of its value already and no way it can remain so or go down for long time. Already Japanese economy got hit by huge export revenue deficiency because of poor dollar exchange rate, so its highly unlikely that the dollar value will remain cheap for long time.

And few moths ago I also read somewhere in newspaper that buying European currencies or gold was in BB's consideration, but not sure if they actually did it. BB or our local banks should gather huge idol Taka in local market and buy dollar as much as they can so that the benefit of exchange rate may come in few weeks later.
We don't have trade surplus to buy dollars. Our dollar reserves have increased due to remitance. So we have dollars in reserve, now we can buy other potential currencies or bonds or commodity. It's not a bad idea to buy gold. Even if US $ falls and other currency becomes dominant, Gold value remains. India, china and many others are buying golds currently.

Two days back there was a news on CNN that Japan is worried that china is buying large amount of yen and building reserves. This could be to raise the value of yen and reduce the demand of Jap products in int markets making it costly. Thus boost chineese export.

You can do these things when you have enough safe reserves. Gold is a safe reserve by all definition. I think BB is doing the right thing. FA bhai. BB didn;t have enough money when gold was $700. It is only now that we have reached to 10 billion reserves. They need to keep 2-3 billion cash for opening L/Cs against imports. So, we hardly have 6/7 billion to buy gold. Hope we don;t have to sell it again soon.
__________________
I'm with Shahbag for fair punishment of all war criminals. Im with Shahbag to stand for fair trials of all Corruption, all murders and social injustices occurred over last 40 years. I'm for a secular, corruption free & Just society in Bangladesh. Spirit of '71
Reply With Quote
  #8  
Old September 15, 2010, 10:39 AM
Neel Here's Avatar
Neel Here Neel Here is offline
Cricket Legend
 
Join Date: March 17, 2009
Favorite Player: Aravinda DeSilva, Lara
Posts: 2,765

gold prices can only go up. major BRIC economies are diversifying their reserves in favour of gold.
India's central bank RBI bought 200 tonnes from IMF last quarter of 2009. Russia bought about 50 tonnes and China 190 tonnes.

even more importantly, private demand in both China and India is sky-rocketing, so much so that China has almost caught up with India as the largest consumer of gold. to put things in perspective India's consumption was 480 tonnes per year while China's was something like 430 tonnes with both numbers expected to rise steadily over the next few years with rising affluence.
read this http://www.nuwireinvestor.com/articl...old-55968.aspx

in conclusion, BB's decision will prove a good one in the long term. dollar is shaky and a further destabilisation could very well witness a common international currency replacing the $. it's better to spread the eggs.
__________________
Anything can be sacrificed for truth,
nothing is too valuable to sacrifice truth instead.
-- Swami Vivekananda
Reply With Quote
  #9  
Old September 15, 2010, 05:05 PM
FagunerAgun FagunerAgun is offline
Banned
 
Join Date: February 18, 2006
Favorite Player: Rafiq and Tendulkar
Posts: 5,636

Quote:
Originally Posted by BANFAN
We don't have trade surplus to buy dollars. Our dollar reserves have increased due to remitance. So we have dollars in reserve, now we can buy other potential currencies or bonds or commodity. It's not a bad idea to buy gold. Even if US $ falls and other currency becomes dominant, Gold value remains. India, china and many others are buying golds currently.

Two days back there was a news on CNN that Japan is worried that china is buying large amount of yen and building reserves. This could be to raise the value of yen and reduce the demand of Jap products in int markets making it costly. Thus boost chineese export.

You can do these things when you have enough safe reserves. Gold is a safe reserve by all definition. I think BB is doing the right thing. FA bhai. BB didn;t have enough money when gold was $700. It is only now that we have reached to 10 billion reserves. They need to keep 2-3 billion cash for opening L/Cs against imports. So, we hardly have 6/7 billion to buy gold. Hope we don;t have to sell it again soon.
BB spent only 400m (As per Ntv Bangla) in US to buy 10 tons of gold at $1270 approx.
Two years ago, BB could have spent only 250m approx in US at $700.00
Two years ago, BB reserve was 6b approx in US and enough to buy this amount of gold and more.

It was not a problem with money, BB simply lacked expertise and foresightedness in decision making.
Reply With Quote
  #10  
Old September 16, 2010, 01:37 AM
BANFAN's Avatar
BANFAN BANFAN is offline
Cricket Sage
 
Join Date: March 26, 2007
Favorite Player: Shak-Ash-Tam
Posts: 16,689

Quote:
Originally Posted by FagunerAgun
BB spent only 400m (As per Ntv Bangla) in US to buy 10 tons of gold at $1270 approx.
Two years ago, BB could have spent only 250m approx in US at $700.00
Two years ago, BB reserve was 6b approx in US and enough to buy this amount of gold and more.

It was not a problem with money, BB simply lacked expertise and foresightedness in decision making.
That would be too marginal and risky to buy gold at that time with 6b reserve. If for any reason, remitance would fall, govt would have to sell gold, that's not a good news for any economy. All stock and bond markets would collapse, just with the news of selling gold, as it happened with india in 90s, when india had to sell gold reserves for liquidity problem. The national economy must play safer than a business man. Currently if they have kept a good liquid reserve, they have kept a buffer for low dollar inflow for any reason. I think, they have done it right.
__________________
I'm with Shahbag for fair punishment of all war criminals. Im with Shahbag to stand for fair trials of all Corruption, all murders and social injustices occurred over last 40 years. I'm for a secular, corruption free & Just society in Bangladesh. Spirit of '71
Reply With Quote
  #11  
Old September 17, 2010, 02:36 PM
samjad's Avatar
samjad samjad is offline
ODI Cricketer
 
Join Date: March 14, 2007
Posts: 795

This is a good decision by BB. Though we have bought it at the top of the price range, but this reserve will be valued more than say US$. As we have seen in recent times, currency market is getting more and more volatile. Euro falling, pounds falling, $ rising, then falling again.

btw.. did you guys hear about our Mostafa Kamal calling for Taka Appriciation against doller ?
Reply With Quote
  #12  
Old September 17, 2010, 02:46 PM
Rabz's Avatar
Rabz Rabz is offline
BanglaCricket Staff
BC - Bangladesh Representative
 
Join Date: February 28, 2005
Location: Here
Favorite Player: Father of BD Cricket
Posts: 20,479

Quote:
Originally Posted by samjad
btw.. did you guys hear about our Mostafa Kamal calling for Taka Appriciation against doller ?
Coincidentally, I have just opened a new thread on that topic, given the enormity of the impact of appreciation of Taka would have in our economy.
__________________
Verily, in the remembrance of Allah do hearts find rest [Al-Qur'an,13:28]
Reply With Quote
  #13  
Old September 17, 2010, 02:53 PM
bujhee kom's Avatar
bujhee kom bujhee kom is offline
Cricket Sage
 
Join Date: June 27, 2007
Location: Dhaka Mental Hospital
Favorite Player: Mo Chow = Chow Mo
Posts: 21,486

So where is this $10B cash located? Is it in the Bangladesh Bank locker/basement safe? Are we somehow or can we earn interest on it while it's just sitting there?
__________________
Khela-dhulai Haraa-haari maraa-maari often with Lathi o ghushi thakbei...
Reply With Quote
  #14  
Old September 17, 2010, 03:00 PM
Rabz's Avatar
Rabz Rabz is offline
BanglaCricket Staff
BC - Bangladesh Representative
 
Join Date: February 28, 2005
Location: Here
Favorite Player: Father of BD Cricket
Posts: 20,479

By the way, this is the first time Bangladesh Bank has bought gold in their history !!

Before this purchase, our Gold reserve was 3.5 tonnes, which was given as a gift to us by the Kuwaiti Govt back in 72-73 when we became a member of IMF and it required us to buy at least 1 ton of Gold to deposit.
__________________
Verily, in the remembrance of Allah do hearts find rest [Al-Qur'an,13:28]
Reply With Quote
  #15  
Old September 17, 2010, 05:07 PM
FagunerAgun FagunerAgun is offline
Banned
 
Join Date: February 18, 2006
Favorite Player: Rafiq and Tendulkar
Posts: 5,636

Quote:
Originally Posted by Rabz
By the way, this is the first time Bangladesh Bank has bought gold in their history !!

Before this purchase, our Gold reserve was 3.5 tonnes, which was given as a gift to us by the Kuwaiti Govt back in 72-73 when we became a member of IMF and it required us to buy at least 1 ton of Gold to deposit.
Nice finding, Rabz.
Before, feeble BB did not have expertise and foresightedness in diversifying its foreign currencies by buying gold. BB needs to buy more.
Reply With Quote
  #16  
Old September 18, 2010, 04:53 AM
Rabz's Avatar
Rabz Rabz is offline
BanglaCricket Staff
BC - Bangladesh Representative
 
Join Date: February 28, 2005
Location: Here
Favorite Player: Father of BD Cricket
Posts: 20,479

Just to put things in some perspective, here is the world's top 15 Gold lovers:

15. Venezuela
Value of Reserves: $15.904 billion
Holdings Total: 397.6 tons

14. Portugal
Value of Reserves: $16.86 billion
Holdings Total: 421.51 tons

13. Taiwan
Value of Reserves: $18.67 billion
Holdings Total: 466.81 tons

12. European Central Bank (ECB)
Value of Reserves: $22.1 billion
Holdings Total: 522.54 tons

11. India
Value of Reserves: $24.58 billion
Holdings Total: 614.58 tons

10. Netherlands
Value of Reserves: $26.9 billion
Holdings Total: 674.98 tons

9. Russia
Value of Reserves: $28.26 billion
Holdings Total: 706.38 tons

8. Japan
Value of Reserves: $33.73 billion
Holdings Total: 843.25 tons

7. Switzerland
Value of Reserves: $45.84 billion
Holdings Total: 1,146 tons

6. China
Value of Reserves: $46.46 billion
Holdings Total: 1,161.6 tons

5. France
Value of Reserves: $107.35 billion
Holdings Total: 2,683.81 tons

4. Italy
Value of Reserves: $108.07 billion
Holdings Total: 2,701.9 tons

3. International Monetary Fund (IMF)
Value of Reserves: $132.4 billion
Holdings Total: 3311.84 tons

2. Germany
Value of Reserves: $150.17 billion
Holdings Total: 3754.29 tons

1. United States
Value of Reserves: $358.63 billion
Holdings Total: 8,965.65 tons
__________________
Verily, in the remembrance of Allah do hearts find rest [Al-Qur'an,13:28]
Reply With Quote
  #17  
Old September 19, 2010, 07:15 AM
BANFAN's Avatar
BANFAN BANFAN is offline
Cricket Sage
 
Join Date: March 26, 2007
Favorite Player: Shak-Ash-Tam
Posts: 16,689

Rabz Bhai, Chinese reserves are in trillions, that i'm sure.
__________________
I'm with Shahbag for fair punishment of all war criminals. Im with Shahbag to stand for fair trials of all Corruption, all murders and social injustices occurred over last 40 years. I'm for a secular, corruption free & Just society in Bangladesh. Spirit of '71
Reply With Quote
  #18  
Old September 19, 2010, 10:17 AM
Neel Here's Avatar
Neel Here Neel Here is offline
Cricket Legend
 
Join Date: March 17, 2009
Favorite Player: Aravinda DeSilva, Lara
Posts: 2,765

gold reserves are not. he has mentioned only gold reserves here.
__________________
Anything can be sacrificed for truth,
nothing is too valuable to sacrifice truth instead.
-- Swami Vivekananda
Reply With Quote
  #19  
Old September 19, 2010, 10:58 AM
FagunerAgun FagunerAgun is offline
Banned
 
Join Date: February 18, 2006
Favorite Player: Rafiq and Tendulkar
Posts: 5,636

On top of this amount of gold, China has a bigger reserve in US Treasury Bills.
Reply With Quote
  #20  
Old September 19, 2010, 12:36 PM
Rabz's Avatar
Rabz Rabz is offline
BanglaCricket Staff
BC - Bangladesh Representative
 
Join Date: February 28, 2005
Location: Here
Favorite Player: Father of BD Cricket
Posts: 20,479

@Banfan: Chinese forex reserve is some staggering US$ 2.4 Trillion, if I'm not mistaken.

I was talking about the Gold reserve.
__________________
Verily, in the remembrance of Allah do hearts find rest [Al-Qur'an,13:28]
Reply With Quote
Reply

Bookmarks


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On



All times are GMT -5. The time now is 11:25 PM.


Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2014, vBulletin Solutions, Inc.
BanglaCricket.com
 

About Us | Contact Us | Privacy Policy | Partner Sites | Useful Links | Banners |

© BanglaCricket