The Bangladesh Bank (BB) has made another reduction in the size of the Export Development Fund (EDF) from $5 billion to alleviate pressure on foreign exchange reserves, aligning with the International Monetary Fund’s (IMF) recommendation. The outstanding size of EDF loans now stands at $4.77 billion, according to BB Executive Director and spokesperson Md Mezbaul Haque. This reduction comes as the central bank becomes cautious about foreign currency lending under the EDF due to some clients not repaying loans on time. The EDF size has gradually decreased since December, with a new fund of Tk 10,000 crore introduced in January to assist exporters. The BB aims to calculate reserves, excluding EDF loans, to fulfill the IMF condition. The decision to reduce EDF size and impose a 4% interest penalty on unpaid loans aims to address challenges in loan realization. With forex reserves declining due to high import payments amid global economic instability, cautious measures are being taken in releasing EDF loans.
Bangladesh Bank Reduces EDF to $4.77 Billion
- Published On May 15, 2023
- 12:54 pm
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Economic Tag: Central Bank
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The Bangladesh Bank (BB) has made another reduction in the size of the Export Development Fund (EDF) from $5 billion to alleviate pressure on foreign exchange reserves, aligning with the International Monetary Fund's (IMF) recommendation. The outstanding size of EDF loans now stands at $4.77 billion, according to BB Executive Director and spokesperson Md Mezbaul Haque. This reduction comes as the central bank becomes cautious about foreign currency lending under the EDF due to some clients not repaying loans on time.
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