Repayment of foreign debts crosses $2bn in eight months

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The pressure to repay the foreign debts is mounting on the country gradually. The repayment of foreign debts has exceeded USD 2 billion in the first eight months of the current fiscal.

Bangladesh had to repay a total of USD 2.03 billion from July to February, which is 43 per cent more as compared to the previous fiscal. The repayment of interest against these foreign loans has doubled to USD 800 million.

The scenario came in the latest report of the Economic Relations Division (ERD) published Monday.

According to the report, Bangladesh had to repay more than USD 2.03 billion, including interests, for the loans taken from various development partners in the first eight months of the current fiscal, which was USD 1.42 billion at the same time last year.

The repayment of foreign debts has increased by USD 610 million in a year.

The amount of repayment has also skyrocketed in taka due to rise in the prices of dollars. In all, Bangladesh repaid some Tk 223.24 billion from July last year to February this year, which is Tk 84.82 billion more as compared to last year.

ERD sources said the overall repayment of foreign debts stood at US$ 2.68 billion in the 2022-23 fiscal.

Speaking to Prothom Alo, Policy Research Institute (PRI) executive director Ahsan H Mansur said Bangladesh has been under some pressure regarding the foreign debts since the 2017-18 fiscal. The repayment of loans is now rising due to the loans taken from Russia and China. The pressure is likely to intensify further.

ERD sources further said the total amount of foreign loans from various development partners was almost USD 5 billion, which was over USD 4.87 billion in the previous year at the same time.

The Asian Development Bank (ADB) has disbursed the most in this time period. ADB has disbursed some USD 1.3 billion. Japan is second in this list with providing USD 1.04 billion in these eight months. Besides, the World Bank (WB) has disbursed USD 880 million, Russia USD 810 million, China USD 360 billion and India has disbursed USD 190 billion.   

The ERD report says the development partners have promised to provide loans and grants worth USD 7.2 billion, which was only USD 1.78 billion last year at the same time.

The pressure to pay for the foreign debts has increased following the start of repayment of loans taken from Russia and China, said the ERD officials. They say the grace period and the deadlines of these loans are low. Therefore, the number of instalments in these loans is high.

According to the sources in the ERD, the repayment of loans taken for the Metrorail Project and the Rooppur Nuclear Power Plant has already started. Bangladesh, at the same time, is paying instalments of several loans taken from China.