At risk is the country’s foreign debt of 2,165 crore, which is Rs 1,06,000 crore in Bangladeshi currency. Debt is on the rise due to the disruption of the use of loans due to the corona and the recent depreciation of the rupee against the dollar. Meanwhile, the interest rate is also increasing as the loan is not repaid on time. All in all, you have to pay more interest and loan against these loans. That is why there is a risk. This information was obtained from a report of the Central Bank.
Debt is on the rise due to the disruption
According to the source, an advance calculation is made on the use of foreign loans, income from it and repayment of the loan. That account does not match now. The income has been less than the calculation. But the cost is high. A large part of the loan has been taken for projects that will generate income in local currency. As a result, they have to repay those loans by buying dollars from the market. This is likely to increase the pressure on the dollar. This will also put pressure on the country’s foreign exchange reserves.
Meanwhile, the repayment of foreign loans and arrears of LC debts has increased the pressure on the reserves. Reserves rose to হাজার 4.6 billion in October. Now it has come down to হাজার 4.5 billion.
Due to the corona, the use of foreign loans has decreased in 2020. Even in 2021, the use in this sector was less. But the interest has been calculated against the loan. In addition, the loan amount has increased due to the addition of interest due to deferment of loan repayment. Dollars have to be bought from the market to repay the loans of local currency earning projects. Earlier, every dollar could be bought for 75 to 8 rupees. Now you have to buy it for 7 to 8 rupees. You have to pay more than 2 rupees per dollar. As a result, the debt is increasing by about 2.35 percent. As a result, the money that was obtained with the loan, now has to pay much more than that.
Due to the corona, the use of foreign loans
In this context, the former governor of the central bank. Salehuddin Ahmed said, it is better to use it properly with foreign loan. But failure to do so puts pressure on the economy as a whole. Be careful from this side. The central bank needs to keep a close watch on foreign loans. Because the pressure to repay the loan will come on the central bank. Due to Corona, the policy has been relaxed a lot. That is why the pressure has increased now.
He further said that the risk is less if foreign loans are taken for projects that will generate foreign exchange. But if there is no foreign exchange earnings, the risk is higher in those loans. It is possible to earn foreign exchange with a very small portion of the foreign loans taken in the country.
According to the central bank report, the country’s external debt has increased due to the corona. In the fiscal year 2029-20, the external debt was ৬ 1.79 billion. In the last financial year, it has increased to 2,175 crore dollars. In one year, the foreign debt has increased by 26.11 percent. Earlier, the loan increased by an average of 8 to 15 percent. The loan amount has increased due to non-payment of previous loan installments at the time of coronation.
According to the report, short-term debt is the largest contributor to foreign debt. If the short-term debt increases, there is a risk. Because these have to be paid quickly. That is why it is difficult to collect foreign currency. Long-term debt has increased less. The risk is lower in long term loans. Because these are available for a long time to pay.
He further said that the risk is less if foreign
An official of the concerned department of the central bank said that three risks have come together in foreign loans. One. Decreased use of credit due to corona, two. Money devaluation against the dollar and three. Sudden increase in short-term debt due to corona. The central bank is working to address these. A payment schedule has been created. These will be paid till 2023 under a little pressure. With more reserves, there is less cause for concern. However, declining remittances have raised concerns. If remittances are increased, it will be possible to deal with the pressure easily.
According to the report, foreign debt in the private sector stood at ৮৬ 1.69 billion as of June 30. Of this, short-term loans are হাজার 1.17 billion and long-term loans are ৬৮ 7.9 billion. The total debt in the public sector is 296 crore dollars. Of this, short-term debt is ৪ 440 million and long-term debt is ২ 252 million.
An official of the concerned department
In the 2019-20 fiscal year, the external debt of the private sector is 1,406 crore dollars. Of this, short-term loans are কোটি 830 million and long-term loans are ৫ 535 million. The total debt in the public sector was ৮ 262 million. Of this, short-term debt is ২৫ 250 million and long-term debt is ৭ 256 million.
It shows that the debt in the private sector has increased more than the public sector. Short-term loans are also higher in the private sector. That is why the level of risk in this sector is also high. Compared to the fiscal year 2019-20, the external debt of the private sector has increased by about 20 percent in the fiscal year 2020-21. The public sector has grown by about 5 percent.