Forex receipt thru three major channels like aid, export, remittance slows
On the other side of the country’s foreign-exchange coffer, repayment for the outstanding foreign loans is rising year on year, officials said.
As such stress on the forex reserves is building up. Latest on Monday, the central bank cleared import payments amounting to US$1.18 billion through the Asian Clearing Union (ACU) mechanism, officials said. And the country’s forex reserves now dropped below US$30 billion to US$29.77 billion.
The sources said the commitments for medium-to long-term (MLT) foreign assistance dropped deeper by 43.33 per cent during July-March period of the current fiscal year (FY) 2022-23.
Analysts and officials say the government’s belt-tightening stance in public expenditure, poor reform initiatives, country’s waning creditworthiness, and global economic shocks worked behind fall in the overseas development assistance (ODA) inflow.
According to the provisional data available with Economic Relations Division (ERD), the overseas development partners, like the World Bank, the Asian Development Bank, AIIB, and India, confirmed lowest funds in the first three quarters (July-March) this FY2023 compared to the corresponding period of last FY2022.
Bangladesh received ODA worth US$5.363 billion in 3Q of the current fiscal-21-percent lower from the $6.798 billion got during the same period of last FY.
The development partners had committed US$3.076 billion in loans and grants for the Jul-Mar period for bankrolling Bangladesh’s development recipe, which is 43.33 per cent lesser than that in the corresponding period last FY, the ERD data showed.
In July-Mar period last FY, Bangladesh got confirmation of $5.431 billion worth of foreign assistance.
Meanwhile, the government repaid $1.73 billion as principal and interest of its total outstanding loans during 3Q of the current fiscal.
In the same period of FY2022, it had served debts with $1.595 billion against different loans, the ERD data showed.
Out of the $5.363 billion disbursed in foreign aid during 3Q of the current FY, the development partners released $5.017 billion worth of loans and $346.07 million as grants.
Of the assistance, Japanese development partner JICA released $1.30 billion, the WB $854.30 million, the ADB $801.93 million, Russia $747.20 million, China $637.97 million, the Asian Infrastructure Investment Bank (AIIB) $336.39 million, and India 208.66 million during the Jul-March period.
Meanwhile, the MLT loan and grants commitments by the development partners dropped to $3.076 billion during the period compared to $5.431 billion in the same period last fiscal, according to the ERD count.
Out of the $3.076-billion aid commitment, the development partners confirmed $2.804 billion worth of loans and $272.25 million as grants during the first three quarters of the current fiscal.
China, India and Russia had not made any aid commitment for Bangladesh in July-March period, which lowered the overall assistance commitment.
Meanwhile, the government repaid a total of $1.73 billion in the July-Mar period of FY2023.
Out of the repayment, it made a payment of $1.244 as principal and $485.90 million as interest for the outstanding MLT loans in 3Q of the current fiscal, the ERD data showed.
A senior ERD official said since the government had almost halted project approval over the few months, foreign-assistance commitments fell “significantly” in the recent months.
“In addition, the belt-tightening approach in public pending and failure in timely project execution prompted the negative growth in foreign-aid commitment and disbursement,” he adds.
Until expediting on quality project implementation, the foreign-fund receipt will be coming down, the official noted.
Source: The Financial Express