Economic Reporter :
Faced by global economic downtrend out of the deadly coronavirus pandemic the business people of multiple potential sectors are eyeing to bag loans from the country’s ballooning foreign exchange reserves, industry insiders said.
In a bid to support the country’s growing economy and sustain the overall growth trajectory the government has recently moved to utilize for the first time the countries idle foreign currency to implement various development projects.
The government is now carrying out a study to select the probable projects where forex reserves will be invested and the Prime Minister’s Office also is working on it for quick implementation of the plan.
The government would pick those projects for the foreign currency loans that would have a high rate of return so that it can repay the loans also in the foreign currencies, said a senior official of the Ministry of Finance. The funds would be repaid in foreign currencies so that the reserves remain the same, he added.
Sources said, the government has planned to utilize idle foreign currency reserve when the country’s forex reserve mounted to a new height of around $40 billion in early this month riding on robust flow of inward remittance supported by 2.0 per cent incentive bonus introduced by the government, growth in export earnings and fall in imports due to coronavirus pandemic.
The growing budgetary support and loans from the Asian Development Bank, the International Monetary Fund, the World Bank, the Asian Infrastructure Investment Bank and the Islamic Development Bank also helped swelling up the country’s foreign currency reserve in highest level in its history.
Currently, the country’s business sectors are facing difficulty in doing businesses due to higher interest rates against the backdrop of global economic downfall due to coronavirus pandemic, said Sheikh Fazle Fahim, President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), supporting the government move.
Loan support from foreign currency reserve will help the industrial sector to boom, he said.
Mr. Fahim, however, stressed that the loan should be given to the potential business project alone that has the capacity to pay back it with interest.
The interest rate against the foreign currency reserve should not be over 2.0 per cent.
Like many other potential sectors the country’s energy and power sector should also get loan from the country’s foreign currency reserve, said Md. Latif Khan, President of The Bangladesh Independent Power Producers Association (BIPPA).
