Al Amin :
Concern is growing over reduction of foreign currency reserves of Bangladesh, as around $8.12 billion has been given as loans to the local exporters through Export Development Fund (EDF).
Besides, inflow of remittance has declined and import payment increased drastically, contributing to diminish the forex reserves.
This was told by the noted economists while talking to The New Nation on Sunday.
According to sources, the central bank has disbursed loans worth $700 crore or $7 billion through EDF, $20 crore through Green Transformation Fund (GTF), $3.85 crore through Long Term Financing Facility (LTFF) and $64 crore for Paira Port Authority and $4.80 crore for Bangladesh Biman through Sonali Bank from foreign exchange reserves.
The total amount of the disbursed loans is $8.12 billion. Of them, $20 crore has been given to Sri Lanka. As a result, the total forex reserve is below $32 billion.
“The actual amount of foreign currency reserve is around $32 billion, which is so far enough. But, there will have a risk, if it is reduced further,” Dr Zahid Hussain, former lead economist of the World Bank Dhaka office said while talking to The New Nation.
“Dealing with the reserves crisis, the decisions taken by the Bangladesh Bank is not planned or wise-worthy,” he said.
The government is desperately trying to get loans from the International Monetary Fund (IMF), economists said.
Getting the loans, Bangladesh is likely to abide by some pre-conditions including the obligation to follow the correct method of reserve calculation.
An IMF delegation came to Bangladesh in October last year. During the visit, the delegation sent a ‘Safeguard Assessment Report’ to Bangladesh Bank on behalf of the foreign lender agency.
It mentioned that there are differences between Bangladesh and international standards in calculating the reserves.
According to the IMF’s Balance of Payments and International Investment Position (BPM-6) Manual these liabilities will not be treated as reserves as these are no liquid resources or investment grade securities.
As a result, the IMF had recommended through the Safeguard Assessment Report resolution of this discrepancy. Amid the situation, the government is desperately trying to borrow loans worth $4.5 billion from the IMF to deal with the ongoing economic situation and the pressure on reserves.
Getting the loans, Bangladesh is likely to abide by several conditions imposed by the IMF, including the obligation to follow the correct method of reserve calculation.
Prof Dr Moinul Islam, former Professor of Economics Department of Chattagram University, said, “The loans given or being given to the country’s influential exporters in the name of the EDF from the reserves is a very bad decision. Such decisions have encouraged capital outflow from the country.”
“The EDF loan is not coming back, which the banks are forced to turn into forced loans. That means, the EDF loans have been laundered,” he said.
