Short-Term Debt Declines to $11.97 Billion

Economic Tag: Debt

Foreign corporate borrowing in Bangladesh has declined, with short-term debts falling to $11.97 billion in November 2023, indicating economic slowdown signals. Private sector short-term external debt has steadily decreased due to entrepreneurs postponing investments amidst uncertainties in domestic and global markets.

Factors contributing to the downturn include the ongoing energy crisis, local currency depreciation against the dollar, and repayment risks amid forex scarcity. Bangladesh Bank data reveals a decline from $15.83 billion in January 2023 to $11.97 billion in November. While central bankers see it as relieving pressure on forex reserves, business leaders fear disruptions to industrial production and employment.

The Russia-Ukraine war and issues with forex-related transactions have further hindered investment plans, impacting short-term external borrowing by the private sector. Global interest rate increases and tightness in letter of credit availability contribute to the decline in foreign borrowing.

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