Photo: Collected. Remittances are falling. Export growth has slowed. In the meantime, the private sector is under pressure to repay foreign loans. 3.41 billion or 3.41 billion dollars more than the amount of foreign loans taken by the private sector in the first seven months of this year. At this time, 1 thousand 938 million dollars had to be paid off the previous debt. And the new loan came to 1 thousand 597 million dollars.
Those concerned said that despite reducing imports in various ways and increasing exports and remittances, the main reason for the crisis in the foreign exchange market is debt repayment pressure. Due to various reasons, foreign loans are coming to the private sector less. In particular, most countries in the developed world, including the United States, have increased interest rates to reduce inflation. As a result, the dollar has gone to these countries. Among these, some Bangladeshi banks have delayed in paying the debts of some Dubai-based banks. In this news, bad news has been sent to foreign banks about their ability to repay loans. Many entrepreneurs do not want to take loans now. Because a couple of years ago foreign loans were available at 2 to 3 percent interest. Over the past two years, interest rates have risen to over 9 percent. At this time, the rupee has depreciated by 30 percent against the dollar. No one knows where the dollar rate or interest rate will go in the future. That's why many people don't want to take loans.
Talking to the bankers, it is known that after the start of Corona, the interest rates in the world market went down. At that time, foreign debt in the private sector increased significantly. Now the pressure to repay these loans is created. At the end of 2019, the year before Corona, the external debt of the private sector was only 821 million dollars. In just two and a half years, it increased to 1 thousand 776 million dollars at the end of June last year. Since then it has been decreasing again. At the end of last July, it fell to 1 thousand 338 million dollars. And at the end of last December, it was 1 thousand 642 million dollars. This means that the debt has increased as fast as it has decreased.
An official of Bangladesh Bank said that due to various regulatory measures, private sector entrepreneurs take short-term foreign loans to import capital equipment and raw materials used in industry. However, the import of capital goods fell by 17.40 percent to $1,358 million in the last financial year due to central bank regulatory measures and uncertainty over investment. Imports of intermediate goods fell by nearly 20 percent to $4,427 million.
According to Bangladesh Bank, the cost of paying interest on private foreign loans is increasing. In the first seven months of this year, 392.6 million dollars were spent on foreign interest payments. And the principal has been paid 1 thousand 899 million dollars. 3 thousand 673 million dollars have to be repaid against the new debt of 3 thousand 726 million dollars last year. Where the interest payment was only 246 million dollars. That is why the central bank has sold 2 thousand 344 million dollars to various banks in the last two years. This has reduced the reserves to 23.06 billion dollars. In August 2021, where reserves rose above 48 billion dollars.
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