Over 1 billion dollars were spent on foreign debt interest payments in 9 months

Struggle Online: Bangladesh has paid more than one billion dollars in interest to development partners in 9 months (July-March) of the current financial year. During this time, development partners had to pay 105 million 40 million dollars only for interest. During the same period last financial year, interest payments to development partners were $48.59 million. As a result, the interest payment has increased by 117 percent. That is, the amount of interest payment has increased more than twice. As a result, it can be assumed that the pressure of foreign debt repayment has increased. This information has emerged in the latest report of the Economic Relations Department (ERD).

According to ERD sources, in the first 9 months of the current financial year, the cost of interest payments on foreign loans has increased by about 89 million dollars compared to the same period of the previous year. A total of over $257 million in interest and principal payments have been made in the last 9 months. Last year at the same time it was 1.73 billion dollars.

ERD officials say the reliance on market-based loans has increased the cost of interest payments. Currency devaluation and increase in Secured Overnight Financing Rate (SOFAR) interest rates have made such loans more expensive. Interest rates have risen due to the Russia-Ukraine war and the appreciation of the dollar. They said that SOFAR has increased in the Ukraine-Russia war situation. At present the Sofar interest rate is more than 5 percent. That was less than 1 percent before this war.