Bangladesh has witnessed its foreign debt repayments surpassing the $3 billion mark in the first 11 months of the outgoing fiscal year. It is the highest record of foreign debt repayments in its history.
According to the economic relations department (ERD), the government repaid a total of $3.06 billion in principal and interest for its foreign borrowings during the July-May period in fiscal year 2023-24. The amount was $2.46 billion in the previous year's corresponding period.
The ERD sources said an amount of $1.81 billion was spent on the principal repayment of foreign debt, while $1.25 billion for interest payments.
On the other hand, the country has received $7.02 billion in foreign debt during the July-May period, where $6.61 billion came in loans and $405 million in grants.
Bangladesh has been experiencing mounting pressure of foreign debt repayment throughout the last several years. Depleting forex reserves has exacerbated the situation.
Experts observed that the repayment of foreign debts is putting extra pressure on the forex reserves and budget.
Insiders attributed the growing debt repayment pressure to short-term loans from China and Russia. The strain is feared to intensify further as the government is set to begin repayment of some more mega projects in the next two to three years.