Foreign fund flow into Bangladesh corporates falls to $9.80b until Nov

Corporate external borrowing drops as persisting economic sluggishness dampens businesses' appetite for funds with the short-term overseas debt stock having declined to $9.80 billion until November.

Officials and money-market analysts see such unrelenting contraction in private-sector foreign debts not as a good sign for the private sector-led economy while interest rates on the global market stabilising and import compression on the domestic market easing.

Apart from prevailing energy crisis facing the industrial hubs, coupled with depreciation of the local currency against the American greenback, the economic doldrums following the mass uprising that led to the fall of the Sheikh Hasina regime in early August 2024 prompted the private entrepreneurs to get conservative regarding expansion of their businesses, according to them.

According to the latest statistics available with Bangladesh Bank (BB), the outstanding balance of short-term external credits taken by the private players was $13.95 billion even in May 2023. Thereafter, it kept sliding, having dropped to $10.13 billion by end of 2025.

The downturn continues to reach $9.80 billion in January in 2025. Since then, it had risen slightly to $10.13 billion and $10.22 billion in March and June respectively.

Afterwards, the falling trend in the appetite of overseas credits by the private sector was observed with the figure having dropped to $ 9.80 billion by the end of November last.

In terms of creditor-country-wise short-term private external debts, the United Arab Emirates topped the list with $1.71 billion followed by Singapore $1.64 billion, China $0.93 billion, Hong Kong $0.77 billion and the United Kingdom $0.52 billion.

Seeking anonymity, a BB official says the fall in overseas debts would certainly relieve pressure on the forex reserves to some extent although the stock of foreign currencies continues to improve because of record remittance inflows.

The central banker thinks the ruckus associated with the changeover in state power might prompt the private-sector players to be very careful as far as their business-expansion plans are concerned-in a sort of wait-and-see posture.

President of Bangladesh Chamber of Industries (BCI) Anwar-ul Alam Chowdhury says the private-sector players have been passing through a situation in recent times which is not suitable for business.

"Apart from persistent energy crisis and lawlessness," the business leader mentions, "the higher-interest regime makes survival difficult for the entrepreneurs as they cannot maintain even half the production capacity" at their manufacturing bases.

"Then, why people will invest under such situation? That's why the volume of overseas debts as well as the domestic borrowing by the private entrepreneurs went down," says Mr Chowdhury, also chairman of Evince Group.

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