Bangladesh Bank has introduced an instalment facility to repay loans from the Export Development Fund (EDF). From now on, the entire loan liability can be paid in three instalments, which had to be paid at once earlier. The Foreign Exchange Policy Department (FEPD) of Bangladesh Bank issued a guideline in this regard today (September 15, 2022) and sent it to all authorized dealers engaged in foreign exchange transactions. Read:Like Singapore, Bangladeshi traders can now buy goods and export directly to third countries According to the Bangladesh Bank directive, exporters can partially repay the EDF loan liability. A maximum of two partial repayments can be made during the loan tenure. The circular stated that the remaining liability is to be repaid in one go during the loan tenure. That means exporters can pay the entire debt in three instalments. Sector insiders say that exporters had to face issues with the repayment at once, as export income is not available at the same time. Read:300,000 VAT collecting machines to be installed in Dhaka, Ctg by pvt firm In such a situation, the exporters will be able to partially pay the EDF liability in instalments only after receiving the export proceeds under the new directive. The central bank provides foreign currency support to exporters for the import of manufacturing raw materials, under EDF. The tenure of an EDF loan is 180 days. Subject to the approval of Bangladesh Bank, this period can be extended by another 90 days.

To achieve the $80 billion export target of the government for the fiscal year (FY) 2023-24, the export development fund (EDF) should be raised to at least $10 billion and made accessible to all exporters, Metropolitan Chamber of Commerce and Industry (MCCI) President Md Saiful Islam said Monday. As per the Export Policy 2021-2024, the export target is $80 billion for FY24, yet the current EDF is only $7.5 billion, he added. Saiful was addressing the MCCI-Policy Research Institute (PRI) post-budget discussion "Bangladesh from Vulnerability to Resilience and Rapid Inclusive Development" in the capital. Read: Reliable accreditation infrastructure crucial for strengthening export Planning Minister MA Mannan was the chief guest at the event, Dr Shamsul Alam, state minister for planning, and Dr Zaidi Sattar, chairman of PRI, were special guests. "Many areas in the proposed budget for FY23 have a lot of room for improvement as far as the business community's needs are concerned. The allocation of social safety nets is one such area," he noted. There has been an increase in the allocation from Tk107,614 crore in FY22 to Tk113,576 crore considering the twin blows of the Russia-Ukraine war and the pandemic. Read: Govt urged to provide policy support to plastic toy industry for its export-earning potential "Also, natural disasters such as floods, which we are going through right now, will also be another challenge for the country," Saiful said. "So, we are suggesting increasing the social safety net budget from the current level to a reasonable amount." "Also, the personal income tax thresholds have remained unaddressed, which we thought should have been subject to changes, especially the tax-free threshold," the MCCI president said. Read WTO Conference: Bangladesh speaks against sudden ban on food export "Considering the increase in per capita income to $2,824, we believe the personal income tax threshold should be increased to Tk400,000."

Bangladesh is going to plunge into a ‘newer depth of debt’, both from internal and external sources, in the coming days as it is spending additional money to salvage the economy hit hard by the COVID-19 pandemic, according to an analysis. So far, the government has announced a set of COVID-19 recovery packages worth 13.25 billion dollars, which is equivalent to 4.03 percent of the GDP, aiming to revitalise the country’s economic activities and production system. The government has projected that the debt status of the country will be 38.3 percent of the total GDP in the 2022-23 fiscal year. According to an official document, the amount will be Tk 15,480 billion where internal sources will contribute Tk 9597.8 billion, which is 62 percent of the amount, and external sources will contribute Tk 5882.6 billion, which is 38 percent. The country’s debt status in 2021-22 fiscal will stand at Tk 13,531.5 billion which will be 37.8 percent of the total GDP. Of the amount, internal sources will contribute Tk 8408.6 billion, which is 62.1 percent of the amount, while external sources will contribute Tk 5122.9 billion, which is 37.9 percent. In the current fiscal, the debt status stands at Tk 11,678.3 billion with 36.8 percent of the GDP. Internal sources are contributing Tk 7355.5 billion, which is 63 percent, and external sources are contributing Tk 4322.8 billion, which is 37 percent. The total amount is 1.2 percent higher of the GDP from the revised debt status target of 2019-20 fiscal. The revised status of the previous fiscal was Tk 9996.9 billion and it was 35.6 percent of the GDP. Internal sources injected Tk 6235.8 billion, which was 62.4 percent, while external sources gave Tk 3761.1 percent, which was 37.6 percent.