Bangladesh’s external debt dropped by $1.43b

Bangladesh's government internal debt reached nearly 9 lakh crore taka by April, due to financial crises, lack of investment environment, and downgraded credit ratings, which reduced both domestic and foreign investments. The government's internal borrowing rose by around 1.04 lakh crore taka over the past year,

The Asian Development Bank (ADB) will review nearly $13 billion worth of projects in Bangladesh next week due to implementation delays. A tripartite meeting involving the ADB, the Economic Relations Division (ERD), and project implementers will be held in Dhaka from July 22 to 24 to address these issues.

Bangladesh's private sector entrepreneurs, initially attracted by low interest rates on foreign loans, now face significant challenges due to currency devaluation and a dollar crisis. As of May FY24, the sector's foreign debt stood at $11.04 billion, with $2.02 billion borrowed from the UAE. Rising interest rates and a 32% increase in the dollar rate have diminished interest in foreign loans, prompting a shift towards domestic borrowing.

During a press conference at Gonobhaban, Prime Minister Sheikh Hasina announced that China has agreed to provide Bangladesh with $2 billion in grants, interest-free loans, concessional loans, and commercial loans. This agreement was reached during her recent visit to China, where she met with Chinese President Xi Jinping on 10 July.

The Ministry of Finance has issued alerts due to rising state guarantees for both foreign and local loans, urging ministries and the central bank to ensure timely repayment to avoid default risks. As of March this year, government guarantees against loans totaled Tk 1.115 trillion, up from Tk 985.91 billion in the previous year.

Bangladesh is considering the establishment of an autonomous entity under the Finance Division to enhance public debt management. This body would handle all aspects of debt, including the issuance of treasury securities, oversight of national savings certificates, and external borrowing.