PM suggests using forex reserve to finance development projects
Prime Minister Sheikh Hasina directed the authorities concerned to explore ways to channel funds from the country’s record-high foreign exchange reserves in the form of credit to finance the development projects amid the coronavirus epidemic.
She directed the finance ministry and Bangladesh Bank to look into the matter at an ECNEC meeting on Monday, Planning Minister MA Mannan said after the meeting, reports bdnews24.com.
Bangladesh Bank’s foreign currency reserves rose to an all-time high of $36.14 billion on July 2 after expatriate Bangladeshis sent home a record $1.833 billion in June despite the coronavirus pandemic ravaging economies.
The amount is enough to pay the import bills for nine months, while a country must have foreign currency reserves equivalent to the import cost of three months, according to the international standards.
Economists have long been calling on the government to invest the money instead of letting it lie idle.
With the global economy reeling from the impact of the coronavirus pandemic, the prime minister is now turning her attention to utilising the funds.
"The prime minister said we always borrow funds in dollars from foreign sources. Our reserves are now $36 billion, so can we not borrow from it? Bangladesh Bank reserves this money in the public interest. Therefore, we can take loans from it for our projects." said Mannan.
Even if the interest rate is a little lower than that on foreign loans, using our own money will mean that its benefits will also remain the country, according to Hasina.
She has instructed the central bank to find out the possible economic impact of the plan, said the planning minister.