Foreign debt rises to $113 billion

Bangladesh’s total external debt stood at 113.51 billion US dollars (11,351 crore) in December 2025. In Bangladeshi currency, this amounts to approximately Tk 13,96,173 crore (about Tk 14 trillion).

Three months earlier, in September, the external debt stood at 112.21 billion US dollars (11,221 crore).

At the end of June, it was 113.58 billion (11,358 crore US dollars). This indicates that external debt declined slightly compared to June last year but increased relative to September.

These figures appear in a report published by Bangladesh Bank. The report shows that both the public and private sectors increased their external borrowing during the October–December quarter. A significant portion of this debt is long-term.

According to the Bangladesh Bank report, by the end of December 2025, approximately 82 per cent of the country’s total external debt belonged to the public sector, with the remainder owed by private industrial entrepreneurs.

Public sector debt stood at 93.46 billion US dollars, while private sector debt amounted to 20.05 billion US dollars.

The report further indicates that 87.62 per cent of the total external debt is long-term, while 12.38 per cent is short-term.

Of the public sector debt, the government directly borrowed 80.94 billion US dollars, while 12.52 billion US dollars was borrowed by Bangladesh Bank, state-owned banks, and other public institutions.

A notable shift occurred in private sector external borrowing during the final quarter of 2025.

After declining for three consecutive quarters from March to September, private sector debt rose again and exceeded the 20 billion US dollar mark by the end of the October–December period.

Short-term private sector debt totalled 10.18 billion US dollar, including 6.06 billion US Dollar in trade credit. Long-term private sector debt stood at 9.87 billion US dollars.

Officials of Bangladesh Bank stated that, during the tenure of the interim government, the country borrowed from several multilateral organisations, including the International Monetary Fund and the World Bank, to address the dollar crisis.

Earlier, during the tenure of the Awami League government, authorities had taken loans to implement development projects.

However, many of these projects have not generated foreign currency earnings, which has increased repayment pressure on the government.

Both the government and the private sector must service external debt using remittance inflows and export earnings.

Meanwhile, during the first seven months (July–January) of the current 2025–26 fiscal year, the country repaid more in external loans than it received.

During this period, Bangladesh received 2.64 billion US dollars (264 crore 16 lakh) in loans and grants, while it repaid 2.67 billion US dollars (267 crore 68 lakh) to various development partners and creditors.

Over the past few years, debt servicing pressure has increased significantly. In the 2024–25 fiscal year alone, the country repaid more than 4 billion US dollars (400 crore).  

At the beginning of 2022, following the outbreak of the Russia–Ukraine War, the price of the US dollar began to rise in Bangladesh.

This created a substantial imbalance between the supply and demand for foreign currency. The exchange rate increased from Tk 85 per US dollar to Tk 123, leading to a sharp rise in inflation and making daily life more difficult for ordinary citizens.

To manage the crisis, the Awami League government implemented various measures, including import controls and increased external borrowing.

Despite these efforts, it could not halt the decline in foreign exchange reserves.

However, after the interim government assumed office, it managed to stabilise the reserves and bring greater stability to the exchange rate.

The Bangladesh Bank report shows that when the caretaker government assumed office in 2007, the country’s total external debt stood at 20.65 billion US dollars. This rose to 22.79 billion US dollars in 2008.

The Awami League government subsequently took office, and before its removal from power in 2024, the external debt had increased to 104.76 billion US dollars (10,476 crore).

The interim government then borrowed further to address the dollar crisis, raising the total external debt to 113.51 billion US dollars in 2025.