Fiscal policy

 

Fiscal policy

Fiscal policy has four elements: tax policy, the profits of state-owned enterprises, other revenues, and government expenditure policies. The state influences the level of the national output primarily by controlling tax revenue and expenditures, but the methods for doing each are different.

In China, a proactive financial approach has been executed for a long time, and the impacts are amazing. Important divisions have plainly asserted that proactive financial arrangement will steadily grow dim in the following not many years. The creator thinks there is still long haul space for improvement in China and other agricultural nations. The difficult right currently is that public sparing is for the most part concentrated in banks, which are the principal channel to move reserve funds into venture. Notwithstanding, as of late in view of a high pace of non-performing credits, to make preparations for monetary dangers, they can't significantly extend advances. In this way, the movement of venture and financing framework change should be quickened, the strategies and devices for moving reserve funds to speculation should be extended, and the extent of direct financing should likewise be extended to tackle China's concern of a moderate expansion in social venture

Monetary Policy

 Monetary Policy 

is one of the two chief methods (the other being financial arrangement) by which government experts in a market economy routinely impact the movement and heading off by and large monetary action, significantly including not just the degree of total yield and work yet in addition the overall rate at which costs rise or fall. The capacity of national banks to do financial arrangements comes from their syndication position as providers of their own liabilities, which banks thusly need (either as lawfully required stores or as equilibriums for settling interbank claims) to make the cash and credit utilized by people in general in regular monetary exchanges. Significant advancements both in exploration and in the real lead of financial arrangement in late many years have spun around the decision of a transient loan fee versus a save amount as the national bank's immediate working instrument, regardless of whether to utilize some proportion of cash as a transitional objective, whether to oblige the national bank to adhere to some genuinely straightforward arrangement rule, what level of political autonomy a national bank ought to have, and whether to target expansion. Some vital regions of progressing research here, as of the start of the twenty-first century, are whether the social cycle by which financial strategy influences nonfinancial monetary movement fixates more on cash or on layaway, quantitative estimation of whatever is the system at work, the compromise between value expansion, and genuine parts of financial action like yield and business, and exactly why it is that general society in most industrialized nations is as disinclined to swelling as is evidently the situation.

What Is Personal Finance?

 

What Is Personal Finance?

Personal finance is the process of planning and managing personal financial activities such as income generation, spending, saving, investing, and protection. The process of managing one’s personal finances can be summarized in a budget or financial plan. This guide will analyze the most common and important aspects of individual financial management.

 In Other words 

Personal finance is managing your money as well as saving and investing. It encompasses budgeting, banking, insurance, mortgages, investments, retirement planning, and tax and estate planning. The term often refers to the entire industry that provides financial services to individuals and households and advises them about financial and investment opportunities.

Areas of Personal Finance

Here we are focused on breaking down the most important areas of personal finance and explore each of them in more detail so you have a comprehensive understanding of the topic.

the main areas of personal finance are 

• Income

• Spending

• saving 

• Investing and 

• protection. 

Each of these areas will be examined in more detail below.

1 Income 

Income refers to a source of cash inflow that an individual receives and then uses to support themselves and their family. It is the starting point for our financial planning process.

Common sources of income are:

• Salaries

• Bonuses

• Hourly wages

• Pensions

• Dividends 

These sources of income all generate cash that an individual can use to either spend, save, or invest. In this sense, income can be thought of as the first step in our personal finance roadmap.

#2 Spending

Spending includes all types of expenses an individual incurs related to buying goods and services or anything that is consumable (i.e., not an investment). All spending falls into two categories: cash (paid for with cash on hand) and credit (paid for by borrowing the money). The majority of most people’s income is allocated to spending.

Common sources of spending are:

• Rent

• Mortgage payments

• Taxes

• Food

• Entertainment

• Travel

• Credit card payments

• Home rent

• Tuition fees

 

The expenses listed above all reduce the amount of cash an individual has available for saving and investing. If expenses are greater than income, the individual has a deficit. Managing expenses is just as important as generating income, and typically people have more control over their discretionary expenses than their income. Good spending habits are critical for good personal finance management.

#3 Saving

Saving refers to excess cash that is retained for future investing or spending. If there is a surplus between what a person earns as income and what they spend, the difference can be directed towards savings or investments. Managing savings is a critical area of personal finance.

Common forms of savings include:

• Physical cash

• Savings bank account

• Checking bank account

• Money market securities

 

Most people keep at least some savings to manage their cash flow and the short-term difference between their income and expenses. Having too many savings, however, can actually be viewed as a bad thing since it earns little to no return compared to investments.

 

#4 Investing

Investing relates to the purchase of assets that are expected to generate a rate of return, with the hope that over time the individual will receive back more money than they originally invested. Investing carries risk, and not all assets actually end up producing a positive rate of return. This is where we see the relationship between risk and return.

Common forms of investing include:

• Stocks

• Bonds

• Mutual funds

• Real estate

• Private companies

• Commodities

• Art

Investing is the most complicated area of personal finance and is one of the areas where people get the most professional advice. There are vast differences in risk and reward between different investments, and most people seek help with this area of their financial plan.

 

#5 Protection

Personal protection refers to a wide range of products that can be used to guard against an unforeseen and adverse event.

Common protection products include:

• Life insurance

• Health insurance

•  Estate planning

This is another area of personal finance where people typically seek professional advice and which can become quite complicated. There is a whole series of analysis that needs to be done to properly assess an individual’s insurance and estate planning needs.

Finance study

 Finance

What is Finance? 

Simple we can say Finance is the process of managing money. 

 But it has a broad definition 

Finance is a process of managing money Scientifically such as investing, borrowing, lending, budgeting, saving, forecasting planning, and risk management.

There are three main types of finance: 

(1) personal finance

(2) corporate, and

(3) public/government.

Let’s see in the example.

Think Khan is a hairdresser. His monthly salary is $3000 and the monthly expenditure is $2500  and he can save $500 every month. This observation or planning is finance.

A real true every person who knows or unknown about Finance. But they must be related to finance.

They may be students, employees, Business labor, or jobless. 

A company or business firm’s money related activities like Capital, investment 

Borrowing loans, profit distribution that is finance. 

A government budget where from connect fund, text rate, and government expenditure where it is used. How much for education, how much for defense,  how much for public treatment, etc. all the monetary and fiscal planning are finance. 

Share Market Up-down today

Share Market Up-down today 

                                                      Dhaka Stock Exchange                                                 

Last updated on October 22, 2020, at 4: 45 pm 

 

SINGLE DIGIT INTEREST RATE IN BANGLADESH

Lower financing costs are good news for borrowers, mortgage holders (contract holders). This gathering may spend more. 

Lower interest rates are bad news for savers. For example, retired people may live on their savings. If interest rates fall, they have lower disposable income and so will probably spend less

Single Digit Interest Rate

The government is going to implement the single-digit interest rate from April 1. It means the all the scheduled banks will be able to charge a maximum nine percent interest rate for creditors, and six percent for deposit. It was set to be implemented from January last. But later it was deferred for unavoidable reasons

What the central bank analysis said

The Bangladesh Bank analysis said deposit rate will decline if the lending rate is set at nine percent, and this will discourage depositors from keeping their deposits in banks.

As of December last year, 20 banks have deposits of less than a six-month tenure at six percent the interest rate or less, and 38 banks have deposited at 6.5 percent to 10.25 percent, according to the report.

However, foreign banks’ interest rate on deposit is comparatively much low, which means a deposit of the collection is possible even at a low rate.

Data from the Bangladesh Bank shows that deposit growth saw a sharp fall in October last year to 8.86 percent year-on-year, which was in double digits several months back.

The report said a single-digit interest rate will hurt credit inflow to the private sector as banks will be reluctant to lend at a low cost. However, a low lending rate will help businessmen cut their operational costs.

Private sector credit growth already touched bottom, hitting single digit in November, and the trend is likely to continue in the coming months, said, industry insiders.

The Bangladesh Bank the report said single-digit interest rate will reduce LC (Letter of Credit) opening, hurting imports and exports.

Advantage and Disadvantage   of single-digit interest rate

The legislature will execute the single-digit loan cost from April 1. It implies the all the planned banks will have the option to charge a most extreme nine percent financing cost for loaning and six percent for the store. It was set to be executed from January last. Be that as it may, later it was conceded for unavoidable reasons

For the last couple of months 'single-digit rate of interest' has been the talk of the town in Bangladesh. However, this did not happen overnight, as it took nearly a year to bring the interest rate down to a single digit. Merchant associations had been demanding a single-digit interest rate for the last few years.

After considering its advantage and disadvantage, the government set the highest deposit and advance rates at 6% and 9% respectively. But when this is implemented, investors, especially those at the grassroots, will be adversely affected. 

They will have challenges in finding a friendly sector to invest in. The capital market in Bangladesh is very dense and it has already lost trust among investors. Given the level of insecurity, many investors are also reluctant to put money in non-banking financial institutions. Previously, government savings certificates were the first choice among investors. But right now it has become quite difficult to invest in a savings certificate as the government has recently imposed some additional formalities.