No decision but on lending to personal sector from reserves
The government is yet to decide about lending money from the forex reserves to the private sector, Finance Minister AHM Mustafa Kamal said yesterday.
There would be a policy guideline about lending from the forex reserves, and everything would be done following policy, he said.
"So far, no such insurance policy has been made."
The minister spoke while addressing a press briefing following meetings of the cabinet committees on purchase and monetary affairs through a virtual platform.
Last week, the federal government, for the very first time, took a proceed to lend money from the reserves for a development project.
When asked about sanctioning funds from the reserves before formulating the guideline, the minister said the maneuver would be incorporated in the guideline whenever it really is formulated.
"Even more works are needed to be done onto it since this is certainly a fresh area," Kamal said.
It really is decided that fund from the forex reserves can be spent on government jobs, he said.
"As we are shelling out for a government job, it is best for us to utilise our own money instead of taking loans from overseas."
The government has formed the Bangladesh Infrastructure Development Fund to lend money from the reserves for the dredging of Rabnabad Channel for Payra Port, a seaport in Kolapara, Patuakhali.
On March 15, it sanctioned financing of €524.56 million (Tk 5,417 crore) from the reserves for the dredging task.
Both main conditions for lending cash from the fund include: the gross annual investment target can't be a lot more than $2 billion, and the fund equal to very clear at least six a few months' import bills ought to be there before financing hardly any money from it.
However, the rising trend of the country's every month import expenditure shows that there is little chance left for the government to lend any more cash from the reserves to infrastructure projects in this fiscal yr.
If the month to month import expenditure of January is taken into consideration, the united states currently has forex reserves of only 5.94 months.
According to Bangladesh Bank, the country's import payment was $7.23 billion in January, up 35.64 % year-on-year.
The forex reserves stood at $42.98 billion on March 10.
The cabinet committee on economic affairs in the meeting yesterday approved a proposal of Payra Port Authority to implement capital and maintenance dredging of Rabnabad Channel from the port's own fund.
The port authority will choose direct procurement instead of public-private partnership (PPP).
The finance minister said the committee approved, in principle, the implementation of the dredging project of Payra port from the federal government fund.
Earlier, the government decided to execute the project through PPP within a jv with a foreign firm, the minister said.
"But a project's expense increases if a good foreign firm gets involved. This is why we possess made a decision to implement the job on our very own since we have money. And a specific amount will be put in from the forex reserves."
The country have been on a fantastic growth trajectory in the last 10 years prior to the Covid-19 outbreak, the minister said.
Bangladesh was the 80th greatest economy on the planet in 2009 2009. It ranks 41st now, he said.
The gross domestic product of the 4 Asian Tigers -- Hong Kong, Singapore, South Korea, and Taiwan -- increased at 6, 7 and 8 per cent in the 30 years to 1990, and Bangladesh in addition has achieved a similar growth, he said.
If there had been zero pandemic and Bangladesh had got five extra years, it would have grown to be the Fifth Asian Tiger, he said.
Almost every nation has been hit by the pandemic, he said. "We've been hit but not as much as we'd assumed."
The minister said he firmly believed that the country would get back to its growth trajectory and become the Fifth Asian Tiger.
