Banks will remain open during the holidays declared by the government from March 26 to April 4 to facilitate the financial transaction for their clients.
According to a top official of Bangladesh Bank, banks will keep their operation on from 10am to 1:30pm during the government-declared 10-day holiday against the backdrop of coronavirus outbreak in the country.
He, however, said transaction can be made from 10am to 12 noon.
Meanwhile, the central bank in a circular on March 22 asked all commercial banks to keep adequate cash in their branches to ensure services to their clients during any lockdown.
It advised the bank managements to take help from the local administration to keep their services on during the holiday periods.
The government on Monday declared holidays from March 26 to April 4, aiming to prevent the transmission of deadly coronavirus.
Cabinet secretary Khandker Anwarul Islam announced the decision from a meeting at the secretariat.
Besides, the members of Armed Forces will remain in the field from Tuesday to help the civil admiration so that people maintain social distancing and suspects maintain quarantine.
He said the government has announced general holidays for five days from March 26 to April 2 while April 3 and 4 are weekly holidays.
However, kitchen markets, hospitals and pharmacies will remain open as usual, the Cabinet secretary said.
FBCCI President Sheikh Fazle Fahim on Monday termed a landmark step the central bank’s decision to buy Treasury bills and bonds from banks and non-bank financial institutions (NBFIs) to handle any liquidity crisis.
“The move is praiseworthy. It’ll assist in liquidity for banks and the NBFIs to extend support in the form of soft loans as needed for businesses --from micro and small and medium to larger sectors -- hard hit by the coronavirus pandemic,” Fahim said in a statement.
“During this difficult time such measures would encourage the entrepreneurs. On behalf of the businesses, I express my deepest gratitude towards Prime Minister Sheikh Hasina and the political and government leaderships concerned for such effective measures,” Fahim said.
On Sunday, the central bank in an unprecedented move decided that the government securities from the secondary bond market will be purchased so that liquidity management of banks and the NBFIs do not face any major challenges due to the situation arisen from coronavirus.
A notice by the central bank said it will buy the securities on the market rate, which will be determined by auction.
Under the decision, the banks will be allowed to sell their T-bills and bonds after holding their statutory liquidity ratio (SLR).
Lenders hold the majority of the excess liquidity in the form T-bills and bonds. As of December last, the excess liquidity in the banking sector stood at Tk 105,646 crore, according to the central bank.
The FBCCI president said the central bank’s move is a renewed attempt to keep the country’s economy in order despite huge challenges the country is going through under the current situation.
Media reports said the decision has come after the Reserve Bank of India had declared to buy bonds on the open market for a total of Rs 100 billion ($1.35 billion) to protect its economy from the prevailing crisis arriving from the coronavirus outbreak.
The central bank rarely purchases T-bills and bonds from banks.
In its boldest effort to protect the U.S. economy from the coronavirus, the Federal Reserve says it will buy as much government debt as it deems necessary and will also begin lending to small and large businesses and local governments to help them weather the crisis.
The Fed's announcement Monday removes any dollar limits from its plans to support the flow of credit through an economy that has been ravaged by the viral outbreak. The central bank's all-out effort has now gone beyond even the extraordinary drive it made to rescue the economy from the 2008 financial crisis.
"The coronavirus pandemic is causing tremendous hardship across the United States and around the world," the Fed said in a statement. "Our nation's first priority is to care for those afflicted and to limit the further spread of the virus. While great uncertainty remains, it has become clear that our economy will face severe disruptions. Aggressive efforts must be taken across the public and private sectors to limit the losses to jobs and incomes and to promote a swift recovery once the disruptions abate."
Financial markets sharply reversed themselves after the announcement. Dow Jones futures swung more than 1,000 points from about 500 down to a rise of roughly 500. The yield on the 10-year Treasury bond also fell, a sign that more investors are willing to purchase the securities.
In its announcement, the Fed said it will establish three new lending facilities that will provide up to $300 billion by purchasing corporate bonds, a wider range of municipal bonds and securities tied to such debt as auto and real estate loans. It will also buy an unlimited amount of Treasury bonds and mortgage-backed securities to try to hold down borrowing rates and ensure those markets function smoothly.
The Fed's new go-for-broke approach is an acknowledgment that its previous plans to keep credit flowing smoothly, which included dollar limits, wouldn't be enough in the face of the viral outbreak, which has brought the U.S. economy to a near-standstill as workers and consumers stay home. Last week, it said it would buy $500 billion of Treasuries and $200 billion of mortgage-backed securities, then quickly ran through roughly half those amounts by the end of the week.
And on Monday, the New York Federal Reserve said it would purchase $75 billion of Treasuries and $50 billion of mortgage-backed securities each day this week.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said it is clear that the Fed is now doing "whatever it takes."
"This is an all-out effort to ensure that the business sector can continue to exist even as economic activity temporarily collapses," Shepherdson said.
The International Chamber of Commerce, Bangladesh (ICC,B) has urged the policymakers to take the lead in bringing both public and private sector leadership together nothing that Bangladesh economy is under threat due to COVID-19.
"Bangladesh in the past has demonstrated its ability and resilience in combating the aftermath of a natural calamity and we hope, we shall be able to overcome this impending danger together with courage and fortitude," said ICC,B President Mahbubur Rahman.
In a statement on Monday, he said ICC Bangladesh believes the country is in the danger of not responding promptly and robustly enough to the impending challenges.
"Therefore, there is a pressing need for our government and business to agree on an overarching policy framework in the face of growing uncertainty and volatility. We are resolute in our believe that only coordinated action will be effective in tackling a threat that, by its very nature, knows no borders," he said.
The World Health Organization (WHO) officially declared the coronavirus (COVID-19) outbreak a global pandemic on March 11, which has now spread to 170 countries and territories and infected over 330,000 people.
This number does not adequately show the scale and magnitude of this global crisis, which not only related to public health but also the health of the global economy, said the ICC,B President.
He said economists are grappling and trying to predict the aftermath of this massive disaster. "No one knows exactly what will come tomorrow and thereafter and how the society, government, healthcare and the economy will change."
Rahman said it is obvious that the marginal and growing economies will be severely affected. "Therefore, it is of great concern for Bangladesh as more than 70% of its total export destinations are USA, UK, Canada and EU countries."
The veteran business leader said Bangladesh’s export earnings fell by 4.8% in the first eight months of the current fiscal year -- to $26.24 billion from $27.56 billion in the same period of the prior fiscal year -- and this downward trend might exacerbate in the coming months in the face of wholesale cancellation of export orders.
On the other hand, he said, China is Bangladesh’s largest trading partner and the highest contributor to its supply chain, which feeds into both export and import production.
"Thus, Bangladesh’s economic activities may hinder because of direct impact on production, supply chain and market disruption as well as impact on firms and financial markets," said the ICC,B President.
Financial sector, specifically the banking sector in Bangladesh, can be the most affected sector and Bangladesh’s remittances is likely to slow down, he said.
Rahman said it is still too early to properly assess what damage the virus will have on the Bangladesh economy, since the situation is evolving every day, economic estimates can only provide a magnitude of the impact.
He said the actual ramification will depend on the extent of the spread and length of the duration of the outbreak and how quickly policymakers can take action to mitigate the health and economic damage.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has urged the international community and brands to take in all their goods and allow shipments and production to continue till July at least.
"So far it's been $1.5 billion lost, impacting the lives of 1.2 million workers," BGMEA President Rubana Huq said.
She said while the COVID-19 wreaks havoc globally, fate of Bangladesh industry and workers has ended up being uncertain.
"With brands handing out cancellations and deferment, we have no idea what tomorrow holds," said the chief of the country's apex body of the apparel industry.
She said without orders and empty production spaces, all the workers run a risk of being totally unemployed for a long time to come.
"For us it comes down to a level of bare minimum survival mode, while the western world still has the privilege of having bailouts from their privileged governments," she said.
On that consideration, Rubana called upon the international community to surface with a renewed pledge to support the workers of Bangladesh, if not just the businesses.
The BGMEA chief is reaching out the countries and brands with the request.
"I will be writing to all," Rubana told UNB mentioning that the embassies will also be kept informed.
She has already written to German Federal Minister for Economic Cooperation and Development Dr Gerd Müller and urged him to kindly immediately address all their brands sourcing from Bangladesh to not cancel or hold any shipment up.
"While the businesses in Germany receive government support and address their losses, at our end we have an existential problem as we have to pay our workers," the letter reads.
She informed the German Minister that they have given brands the assurance that they can pay 90 days later but they still need to take the ordered goods.
"In the face of cancellation, it is only evident that we will fail to pay our workers which will create serious social unrest and I am certain the no German brands would like to see that happen in their account," the letter sent to German Minister reads.
This unfortunate occurrence, Rubana mentioned, is a disaster that neither humanity nor commerce can afford.
She said Bangladesh has a different manufacturing reality and they would be deeply grateful if the German Minister could kindly urge the German brands to take in all their goods, and allow shipments and production to continue till July at least.
"Without this support, we will have a disastrous impact on our labour force and our businesses," Rubana mentioned.