Bangladesh’s foreign debts drop to $96.54b

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Business Desk :
Bangladesh’s external debts dropped slightly to $96.54 billion at the end of September from $98 billion in June, according to recent Bangladesh Bank data.
Over the past 14 years, foreign loans have increased significantly, rising from $23.5 billion in June 2009, which underscored the country’s growing reliance on foreign loans to fund its development initiatives.
The country’s foreign debt surged rapidly by 51% from $65.27 billion in June 2020 to $98.93 billion in June 2023, a $33.6 billion increase in three years, according to the central bank data.
A country’s external debts refer to the total amount of money that the country owes foreign creditors, such as foreign countries, international organizations and foreign private entities.
It includes both public and private debt obligations.
Bangladesh usually receives foreign loans from multilateral institutions such as the World Bank, the International Monetary Fund, the Asian Development Bank, the Islamic Development Bank and major overseas commercial banks.
Central bank data showed that the public sector took $75.26 billion in foreign credit at the end of September 2023, with $64.18 billion borrowed directly by the government and the rest by various government institutions.
Meanwhile, short-term foreign loans in the private sector declined to $21.28 billion in September from $22.25 billion in June.
Buyers’ credit dropped to $6.92 billion in September from $7.7 billion in June 2023.
The country’s annual debt repayment has been projected to almost double to $4.02 billion in FY25 against $2.4 billion in FY22 by the Economic Relations Division, which monitors the government’s borrowings and debts with foreign countries.
Devaluation of the Taka against the US dollar has made the country’s interest payments on foreign loans costly.
In July 2021, the exchange rate per dollar in the country was Tk84.80, which increased to Tk110 after the central bank allowed a floating rate.
The gross foreign exchange reserve in Bangladesh, according to International Monetary Fund guidelines, dropped further to $20.68 billion on December 20.
Import payments for the July-October period in FY24 decreased by 20.5% to $20.26 billion, compared with those of $25.51 billion in the same period of FY23, due to various initiatives taken by the government and the central bank to reduce imports of commodities, especially those of luxurious ones.