ERD says inflow of foreign loans shrinks in July-August

The inflow of foreign loans to Bangladesh shrank by 24.38 percent to $864 million in the July-August period of the current fiscal year, compared to the same period a year ago, according to the Economic Relations Division (ERD).

Of the amount, project aid was $833 million and the donation was $31 million.

ERD data showed Bangladesh received $1.14 billion in the same period of the last fiscal year.

The fiscal year 2022-23 began with a rise in foreign credit flow in continuation of the last financial year. In July, the first month of FY 2022-23, nearly $490 million in foreign aid came into the country, a 48.50 percent higher than July last year.

But, in August it stumbled. Donors have released $376 million in credits this month, down by 23 percent from the previous month.

Bangladesh set a record in receiving low-interest foreign loans in FY 22 in the global situation that was turned upside down by the shock of the Russia-Ukraine war after the pandemic. Donors waived more than $10 billion in foreign credits globally in FY 22.

ERD data shows multilateral and bilateral development partners committed $169.49 billion of loans to Bangladesh from 1971-72 to 2021-22. Of the amount, $111.38 billion was disbursed and $48.54 billion remained undisbursed, according to a Business Insider Bangladesh report.

Bangladesh’s present outstanding debt stands at $56.66 billion and the weighted average interest rate of these loans is 1.5 percent. The average grace period and maturity of these loans are 7.6 years and 28 years respectively, according to ERD.