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Government Seeks $1.5 Billion in Budgetary Assistance

Economic Tag: Debt, Govt.

The government of Bangladesh is seeking over $1.5 billion in budget support from four global lenders to alleviate pressure on foreign exchange reserves amidst soaring external loan repayments due to interest rate hikes. Officials from the Finance Division and the Economic Relations Division (ERD) disclosed that three development agencies have tentatively committed to providing the loan support: Asian Development Bank ($300 million), Asian Infrastructure Investment Bank ($400 million), and Agence Française de Développement (€300 million, equivalent to $325.51 million). Additionally, the government has requested an extra $500 million from the World Bank under the Second Recovery and Resilience Development Policy Credit. While awaiting the World Bank’s response, ERD data indicates a 43% surge in foreign debt servicing to $2.03 billion in the first eight months of the fiscal year. Amid concerns about high-interest-bearing external loans for projects, the government prioritizes flexible and less conditional budget support to provide relief to forex reserves.

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