Bangladesh’s foreign debt servicing rate drops 19% in July-Nov period

Bangladesh’s repayment of foreign debt has declined by 19 percent in the first five months of the current financial year from the figure in the same previous period.

The country repaid $383 million in interest and principal during the July-November period this FY, beginning on Jun 1, against $471.1 million in the last corresponding period.

Economist Zaid Bakht thinks the debt servicing rate will go up when the foreign loans, now in the pipeline, will be released.

He also thinks the government will not face any problem in debt repayment since its ability has increased and the cost of foreign funds is low.

According to the latest data with the Economic Relations Division, donor countries and agencies disbursed around $1.01 billion in credit and aid in favour of Bangladesh in the first five months of the current FY.

The country’s net receipt was $626.3 million as it had repaid $383 million in the period.

As much as $995.7 million was released in the July-November period of the last FY, when Bangladesh paid off $471.1 million. The net receipt stood at $524.5 million in that period.

The disbursement of foreign funds rose by 1.16 percent in the first five months of the current FY over the same previous period.

In the entire 2014-15 FY, donors disbursed $3.1 billion and the government paid back $904.9 million.

In 1999-2000 FY, the net foreign assistance was $1.18 billion and it came down to $ 950 million in 2000-01 FY.

The figure was $ 1.02 billion in FY 2001-02, $ 1.13 billion in FY 2002-03 and $ 610 million in 2003-04 FY.

The net foreign assistance was $1.01 billion in FY 2004-05, $1.07 million in FY 2005-06 and $1.09 billion in FY 2006-07.

It was $1.37 billion and $1.02 billion in FY 2007-08 and FY 2008-09 respectively.