PM Hasina unveils new stimulus packages of Tk 677.5b
Prime minister Sheikh Hasina on Sunday announced four new stimulus packages of Tk 677.5 billion to overcome the possible economic shock from the ongoing shutdown enforced due to the deadly COVID-19 outbreak.
With the previously announced Tk 50 billion stimulus package, the amount of the whole package now stands at Tk 727.5 billiob.
The announcement came from a press conference of the prime minister held at her official residence Ganabhaban. It was arranged to brief journalists about the possible impacts of the coronavirus outbreak on the national economy and the ways to face the challenges in the coming days.
In the four new packages, Sheikh Hasina said her government will provide working capital of Tk 300 billion for the COVID-19 affected industries and service sector institutions.
The commercial banks will provide the loans from their own resources to the industries or business entities concerned on the basis of bank-client relationship.
The interest rate of this loan facility will be nine per cent, of which the loan taker will provide 4.5 per cent while the government the rest of the interest to the respective bank as subsidy.
In the second package, which will be for the small and medium industries, the government will provide Tk 200 billion as working capital.
The commercial banks will provide the loans from their own resources to the industries or business entities concerned on the basis of bank-client relationship.
The interest rate will be the same as nine per cent, but the four per cent interest will be borne by the loan-taking industry while the rest of the money will be paid by the government to the respective bank as subsidy.
In the third package, the Bangladesh Bank will expand its EDF (Export Development Fund). Aiming to increase the facility for importing raw materials under the Back-to-back LC system, the central bank will enhance its EDF facility from US dollar 3.5 billion to US dollar 5 billion.
As a result, some Tk 127.5 billion, equivalent to US dollar 1.5 billion, will be added to the respective fund.
The current interest rate of the EDF is LIBOR (London Inter-Bank Offer Rate) + 1.5 per cent (which is actually 2.73 per cent). It will be decreased to two per cent, she said.
For the last package, the PM mentioned that Bangladesh Bank will introduce a new loan facility system titled ‘Pre-shipment Credit Refinance Scheme’. The amount of this loan facility will be Tk 50 billion in total where the interest rate will be seven per cent.
While addressing the nation on 25 March on the occasion of the Independence and National Day 2020, the PM announced a stimulus package of Tk 50 billion for export-oriented industries to fight the adverse impact of coronavirus on the country’s economy. This money will be used for providing the salaries and wages of workers and employees only.
“The total amount of these stimulus packages will be Tk 727.5 bilion which will be 2.52 per cent of the GDP,” she said.
Sheikh Hasina hoped that the country’s economy will bounce back if the stimulus packages implemented quickly. “And we’ll be able to go to close to the desired economic growth, Inshallah.”
She also put emphasis on giving special attention to local products beside the export-oriented sector to overcome the possible global and domestic economic crisis.
In this connection, the PM urged all to increase production and the use of local products.
On Thursday evening, the PM held a high-level meeting at Ganobhaban in this regard. Finance minister AHM Mustafa Kamal, PM’s principal secretary Ahmad Kaikaus, Bangladesh Bank Governor Fazle Kabir, finance ministry senior secretary Abdur Rouf, and PMO secretary Md Tofazzel Hossain Miah were present.