Bangladesh’s interest payments on foreign loans have surpassed $1 billion for the first time, driven by a shift towards pricier market-based loans and a weakening taka. The country paid $1.05 billion in interest during the first nine months of the current fiscal year (July-March), a staggering 117% increase from the same period last year. The surge is attributed to external factors like the Russia-Ukraine war, which has pushed up interest rates and strengthened the dollar, as well as Bangladesh’s growing reliance on higher-interest market-based loans. Total foreign loan repayments reached $2.571 billion in the first nine months, up from $1.73 billion during the same period last year. However, Bangladesh has secured loan commitments of $7.24 billion from development partners, a 135% increase, owing to improved loan preparation efforts. The Asian Development Bank emerged as the largest contributor, committing $2.62 billion. Foreign grants have also increased, with Bangladesh receiving $5.63 billion in the first nine months, led by the ADB ($1.40 billion), Japan ($1.358 billion), and the World Bank ($967 million).
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