Bangladesh expects 1.5 bln USD in budget support from four global lenders

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DHAKA, April 1 (Xinhua) -- The Bangladeshi government has turned to its development partners for over 1.5 billion U.S. dollars in budget support for the current fiscal year to ease pressure on the foreign exchange reserve as external loan repayment soars on interest rate hikes.

Officials from the Finance Division and the Economic Relations Division (ERD) said in response to the government's request, three development agencies gave tentative commitments for the loan support.

Of the amount, 300 million dollars has been sought from the Asian Development Bank (ADB), 400 million dollars from the Asian Infrastructure Investment Bank (AIIB), and 325.51 million dollars from the French development agency (AFD), the local newspaper The Business Standard reported Monday.

Moreover, the government has sought an additional 500 million dollars from the World Bank for this year under the Second Recovery and Resilience Development Policy Credit, according to a letter sent by the ERD to the global lender on Nov. 27 last year.

While the World Bank has not yet responded, progress on this front is expected by the fiscal year's end, said officials.

ERD data shows foreign debt servicing surged 43 percent to 2.03 billion dollars in the first eight months of the current fiscal year till February, from 1.42 billion dollars in the same period last year. Of the amount paid, interest payments accounted for 806 million dollars, double the amount paid for the same period last year.

The government appears cautious about high-interest bearing external loans for projects and more inclined to get as much budget support, which is flexible and less conditional compared with project loans, as possible to give forex reserve some respite. Enditem

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