Foreign debt repayment in July of the 2023-2024 fiscal year surged by 41.38% compared to the same month last fiscal year. When calculated in taka, this increase rises to 63.77% due to the sharp depreciation of the local currency against the US dollar. In the first month of the current fiscal year, the government paid $253.09 million in interest and principal payments for development assistance, up from $179.02 million in July FY23.
The pressure to repay loans to development partners, primarily driven by interest payments on market-based loans, has intensified. Interest payments to development partners rose from $64.68 million in July last fiscal year to $106.56 million in the current fiscal year. Despite the increased loan repayments, disbursements by development partners fell by 17% in the first month of FY24.
Development partners have not yet committed to new loans for the current financial year, but the government received grant commitments of $5.39 million in July, up from $1.53 million in the previous fiscal year. Japan, the Asian Development Bank, and the World Bank were among the entities releasing funds in the first month of this fiscal year.