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Govt okays IFC proposal for ‘Taka Bond’ in global financial markets
The Bangladesh government has cleared the International Finance Corporation’s (IFC) proposal for issuing ‘Taka Bond’ worth $1 billion.
Published : 7 Oct 2015, 05:37 AM
Updated : 7 Oct 2015, 12:36 PM
Bangladesh Bank governor Atiur Rahman told bdnews24.com that the government’s final approval has been received for issue of the bonds.
“It would be issued soonest possible after the IFC, Bangladesh Bank and the finance ministry work out the details,” the governor told bdnews24.com in Lima.
Rahman is in the Peruvian capital to attend the annual meeting of the World Bank and International Monetary Fund.
In April this year, IFC’s South Asia wing officials pitched the idea to Bangladesh Finance Minister AMA Muhith during a meeting at the World Bank (WB) headquarters in Washington.
The IFC, a member of the WB Group, then gave a formal proposal to the Bangladesh government and on Oct 4, the finance ministry gave its nod.
“This is a big thing, for the first time the Bangladeshi currency will be incorporated in the international financial market. The Taka will be traded in the London stock market,” said the Bangladesh Bank governor.
He said anyone could buy these bonds by paying in US dollars, which would be converted into Taka and invested.
Bangladesh officials will discuss the matter with IFC during the WB-IMF meeting in Lima, added Rahman.
Economic Relations Division (ERD) WB wing Senior Assistant Chief Delwar Hossain said that a meeting between Muhith and IFC chief executive Jin-Yong Cai on Oct 11 will discuss the matter among other issues.
Governor Atiur Rahman said that the IFC aims to prop up private sector investments in Bangladesh through these bonds.
The IFC is already investing in the power and energy sector and that would go up after the Taka bonds are in the market, Rahman said.
The IFC proposes to raise $1 billion from the international market and make the funds available in Bangla in Taka .
They can be purchased by anyone.
The governor said that the bond would ‘attract’ investments from Non-Resident Bangladeshis.
“Banks abroad does not offer any interest on deposits, but the Taka bond will offer 4 to 5 percent.”
Bangladesh agreed with the IFC to issue the Taka bonds because that would boost investments, said Rahman.
The WB-IMF annual meeting is scheduled to start on Oct 9. The Bangladesh Bank chief is now attending the bilateral meetings.
On Tuesday, Rahman presided over a meeting of central bank chiefs of Commonwealth countries.
“Big banks in some countries are obstructing remittance inflows on grounds that it is being used for terror financing. This is not expected,” he said.
Finance Minister AMA Muhith is expected to arrive in Lima on Thursday to lead the Bangladesh delegation at the WB-IMF meeting.
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