'Bangladesh Sovereign Wealth Fund' gets initial Cabinet approval

The Cabinet has given its initial approval for the 'Bangladesh Sovereign Wealth Fund', which will be created with funds from the forex reserves.

Monday's weekly Cabinet meeting cleared the proposal for the fund with an authorised capital of $10 billion.

Cabinet Secretary Mohammad Shafiul Alam told the media that the government will be able to use the fund for 'any purposes in public interest.'

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He said that the fund will be created in five years by contributing $2 billion each year from the forex reserves.

"If our reserves remain at between 30 to 32 billion dollars, then a 2-billion dollar withdrawal will not adversely affect the economy."

Alam said many countries have similar funds.

"The fund will help us when we need to pay in dollars to match funds provided by foreign countries.

"For instance, a foreign bank gives us loan, when it is agreed that the government will provide a percentage of it in dollars for a particular project. In these cases, we do not have any option, this fund can address the issue," he told reporters.

The fund can be used for several purposes and the government will be able to invest it in any project from the fund for 'the sake of public interest', said the Cabinet secretary.

He said the proposal forwarded to the Cabinet on Monday lacks the legal framework for the fund. "The government's practice now is to take loans from foreign banks in an informal manner. Now it will come under a framework. Details will be known once the law is finalised."