PM announces Tk 727.5 billion package to fight coronavirus impact

Prime minister Sheikh Hasina has announced a total financial package of Tk 727.5 billion, including the previously announced Tk 50 billion, in efforts to face the possible impact of the coronavirus on the economy.

She made the announcement during a briefing live on the government plan to overcome the possible impacts of the virus outbreak on the economy on Sunday morning.

Since, of the total package, the Tk 50 billion was previously announced in late March, minus that, the newly announced part of the package is much larger Tk 677.5 billion.

UNB adds: detailing the newly announced part of the package, the prime minister said her government will provide a working capital of Tk 300 billion for the COVID-19 affected industries and service sector institutions

The commercial banks will provide the loans from their own resources to the industries or business entities concerned on the basis of bank-client relationship.

The interest rate of this loan facility will be nine per cent, of which a loan taker will provide 4.5 per cent while the government the rest of the interest to the respective bank as subsidy.

The government will also provide Tk 200 billion as a working capital for the small and medium industries.

The commercial banks will provide the loans from their own resources to the industries or business entities concerned on the basis of bank-client relationship.

Here the interest rate will be the same as nine per cent, but the four per cent interest will be borne by the concerned loan-taking industry while the rest of the money will be paid by the government to the respective bank as subsidy.

Bangladesh Bank will expand its EDF (Export Development Fund). Aiming to increase the facility for importing raw materials under the Back-to-back LC system, the central bank will enhance its EDF facility from US dollar 3.5 billion to US dollar 5.0 billion.

As a result, some Tk 127.5 billion, equivalent to US dollar 1.5 billion, will be added to the respective fund.

The current interest rate of the EDF is LIBOR (London Inter-Bank Offer Rate) + 1.5 per cent (which is actually 2.73 per cent). It will be decreased to 2.0 per cent, she said.

Sheikh Hasina mentioned that the central bank will introduce a new loan facility system titled 'Pre-shipment Credit Refinance Scheme'. The amount of this loan facility will be Tk 50 billion in total where the interest rate will be 7.0 per cent.

While addressing the nation on March 25 on the occasion of the Independence and National Day 2020, the prime minister announced a stimulus package of Tk 50 billion for export-oriented industries to fight the adverse impact of coronavirus on the country's economy. This money will be used for providing the salaries and wages of workers and employees only.

"The total amount of these stimulus packages will be Tk 72,750 crore [727.5 billion], which will be 2.52 per cent of the GDP," she said.

Sheikh Hasina hoped that the country’s economy will bounce back if the stimulus packages are implemented quickly. "And we’ll be able to go to close to the desired economic growth, Inshallah."

She also put emphasis on giving special attention to the local products beside the export-oriented sector to overcome the possible global and domestic economic crisis.

In this connection, the prime minister urged all to increase production and the use of local products.

On Thursday evening, the prime minister held a high-level meeting at Ganobhaban in this regard. Finance minister AHM Mustafa Kamal, PM's principal secretary Ahmad Kaikaus, Bangladesh Bank governor Fazle Kabir, Finance Ministry senior secretary Abdur Rouf, and PMO secretary Md Tofazzel Hossain Miah were present.