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Economy
ADB signs agreements for USD 528 million loans to Bangladesh
December 27, 2022
● The Asian Development Bank (ADB) and the Government of Bangladesh on Tuesday signed agreements for USD 250 million in loans to strengthen climate and disaster resilience in 22 coastal towns in Bangladesh and USD 278.29 million in loans to provide long-term financing and catalyze private sector financing for infrastructure development, reducing pressures on public finance, and enhancing value for money.
● Sharifa Khan, secretary, Economic Relations Division, and Jiangbo Ning, deputy country director, ADB, signed the agreements on behalf of Bangladesh and ADB, respectively.
From: https://www.tbsnews.net/economy/adb-signs-agreements-528-million-loans-bangladesh-558530
Foreign aid commitments, disbursements fall
December 27, 2022
● According to data from the Economic Relations Division (ERD), foreign aid commitments fell by 88.27% during the July-November period. Only USD 461.3 million was pledged this time. During the same period in the last fiscal year, commitments of USD 3.9 billion were made.
● On the other hand, in the first five months of the fiscal year, foreign aid disbursements decreased by 20.29%. In the first five months, USD 2.46 billion was disbursed. The disbursement was USD 3.08 billion in the same period last fiscal year.
● According to ERD sources, due to a lack of loan agreements with development partners, demand decreased during July-November. However, several development project loans are in the process of being signed. For example, the Asian Development Bank signed a loan agreement of USD 628 million in December.
● In the current fiscal year, the government expects to realise USD 8.5 billion in pledges from development partners.
From: https://www.tbsnews.net/economy/foreign-aid-commitments-disbursements-fall-558866
Bangladesh Bank to downsize EDF fund
December 27, 2022
● The Bangladesh Bank has taken an initial decision to downsize its Export Development Fund (EDF) to take some pressure off the fast-depleting forex reserve, according to officials.
● Rather than providing the exporters with EDF loans in dollars for capital machinery and raw material imports, the banking regulator is now considering an alternative refinancing scheme for businessmen in local currency taka, said a number of top central bank officials.
● Central bank Executive Director and Spokesperson Md Mezbaul Haque said since there have been confusions whether the EDF loans are a part of the forex reserve, the Bangladesh Bank wants to redesign the loan scheme for exporters a little differently.
● The official believes EDF loan downsizing will streamline the reserve and enhance foreign currency liquidity for import payments.
● If the refinancing scheme in taka replaces the EDF fund, the central bank will provide businessmen loans from the scheme in taka. Then they would buy dollars from the banking channel and pay for the capital import.
From: https://www.tbsnews.net/economy/bangladesh-bank-downsize-edf-fund-558462
AFD disburses €183.5m loans, grant in 2022
December 27, 2022
● The Agence Française de Développement (AFD) supplied €183.5 million as loans and grants to Bangladesh in 2022 against the approved amount of €278.3 million.
● With this, total disbursement reached €313 million against €609 million approved by the AFD Board and €543-million loans and grants signed during 2021-22, reads an AFD press release issued on Tuesday.
● "AFD has become a major development partner of Bangladesh," it said, adding that this was a crucial step, which came after 10 years of operation and over 20 projects financed here.
● The totals for the cumulative years 2021-22 are €609-million loans and grants approved by the AFD Board and €543-million loans and grants signed.
● The AFD and the Economic Relations Division signed a host-country agreement for the establishment of AFD activities here, a successful outcome of years of negotiations between French and Bangladesh governments.
● "AFD has more than doubled the amount of its financing in the course of the last three years. This only bears witness to the trust between our two countries, France and Bangladesh," said AFD country director for Bangladesh, Benoit Chassatte.
Outflow hits record, remittance inflow falls
December 27, 2022
● Bangladesh sent more than 1.0 million people in the first 11 months of 2022, officials said, expecting the number to increase further in the upcoming year (2023).
● According to experts, there were different reasons behind the lower inflow of remittance that included widespread use of 'Hundi'. Bangladesh Bank registered S21.03 billion in wage earners' remittance in fiscal year, FY 2021-22, much lower than that of USD 24.78 billion in 2020-21.
● In the first five months (July-November) of the current FY, the wage earners sent home USD 8.79 billion.
● Moreover, outward remittances from Bangladesh through legal channels crossed the USD 100-million mark for the first time in 2021 as more foreigners are working in the fast-growing economy, data from a global organisation showed.
● Foreigners remitted USD 101 million last year, up 6.3 per cent from USD 95 million in 2020, according to the new estimates of the World Bank's Global Knowledge Partnership on Migration and Development (KNOMAD).
● It was USD 32 million in 2015, USD 41 million in 2016, USD 47 million in 2017, USD 57 million in 2018, and USD 83 million in 2019.
● Outgoing remittances accounted for 0.02 per cent of Bangladesh's gross domestic product (GDP) in 2021.
note: this post is for research and analysis only