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PM for borrowing from BB forex reserve

Central bank asked to examine viability   

Staff Correspondent | Published: 00:22, Jul 07,2020

 
 

Prime minister Sheikh Hasina on Monday asked whether the government could take loan from the foreign currency reserve in the Bangladesh Bank for development projects.

She made the query while presiding over a meeting of the executive committee of the National Economic Council virtually from her official residence Ganabhaban.

Planning minister MA Mannan, who attended the meeting from the auditorium of the planning commission, told newsmen that the PM wanted Bangladesh Bank to examine the viability of the idea.

Such an idea was earlier mooted by former finance minister AMA Muhith In October 2016.

But the idea was not put to use amid criticisms that there were risks of waste since the money would be taken for mega projects undertaken mostly on political considerations.

The idea has been floated afresh by the prime minister against the backdrop of the country’s foreign exchange reserve exceeding the $36 billion-mark for the first time last week.

The PM pointed out that the country’s reserve was at a much higher level than the comfortable amount equivalent to the country’s import payment for three months.

Asked to comment on the idea, Manan said that he liked it.

He, however, said that the repayment should also be in foreign currencies.

He said that he had already submitted the repayment mode in the meeting.

He feared that failures in debt amortisation might create an unwarranted situation for the central bank to suffer defaulted loan pervading the country’s banking sector.   

Hard-earned money sent as remittances by thousands of expatriates from different parts of the world mainly helped the country’s reserve to grow to the new height.

A record $18.21 billion inflow of remittances marked the concluded fiscal year that ended on June 30.

The government showed a growing tendency in recent years to take loans from bilateral donor countries on difficult conditions although the government had been relying mainly on the development partners for foreign currency loans for development projects.

Mannan said that foreign loans tied with conditions caused both delay and cost overrun for the donor-driven projects.

The country has suffered overall as a result, he said.

Mannan said that nine projects to be implemented at estimated Tk 2,744.44 crore were approved in the ECNEC meeting.

Four of the projects are under the LGRD and cooperatives ministry, two each under the power, energy and mineral resources ministry and the water resources ministry, and the rest one under the shipping ministry.

The projects under the LGRD and cooperative ministry are the revision of the construction of 1490-metre long PC girder bridge over the Teesta River and the Rupganj Jalshiri Abashon connecting road development.

The ministry would also develop rural infrastructures in Jamalpur and Sherpur and construct a bridge over the Dakatia River at Faridganj in Chandpur.

The two projects under the power, energy and mineral resources ministry are the revision of the installation of single point mooring with double pipelines in the Bay for the state-owned Eastern Refinery Limited and the Ghorashal Unit Third Repowering Project.

The two projects under the water resources ministry are the rehabilitation of three projects in Dhamurhat, Petnitola and Mohadevpur upazilas under Noagaon district and the Atrai River Bank Protection project, including a dredging work project.

The lone project under the shipping ministry is the establishment of a global marine distress and safety and integrated marine navigation system project.

This was the first ECNEC meeting in the new fiscal year.

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