Bangladesh central bank injects USD 4.9 billion to restart closed factories
Dhaka, May 23
The central bank of Bangladesh, known as Bangladesh Bank, announced a fund of 60,000 crore taka as a stimulus package to restart the various closed factories in the country.
Bangladesh Bank's governor, Md Mostaqur Rahman, announced this at a press conference on Saturday. He expressed hope that this fund would create 2.5 million jobs.
The package has two components, which includes Tk 41,000 crore refinancing fund, sourced from banks with excess liquidity through long-term deposits of at least three years at a 10 per cent interest rate, and a Tk 19,000 crore fund drawn from Bangladesh Bank's own resources, subject to a government guarantee, the Daily Star reported.
Under the refinancing fund, the largest allocation -- Tk 20,000 crore -- has been earmarked for closed factories, followed by Tk 10,000 crore for agricultural and rural activities, Tk 5,000 crore for the cottage, micro, small, and medium enterprise (CMSME) sector, and Tk 3,000 crore each for export diversification and the North Bengal Agricultural Hub, the report said.
The central bank's own fund covers 10 targeted schemes, including pre-shipment credit refinancing, financing for cottage and micro entrepreneurs, overseas employment, and startups.
Bangladesh's economy has been under pressure over the past two years due to persistent dollar shortages and elevated import bills following global commodity price volatility and geopolitical tensions. The country has also been dealing with declining foreign exchange reserves and pressure on the taka currency.
The manufacturing sector, especially the ready-made garment industry, which contributes the bulk of Bangladesh's export earnings, has faced challenges from slowing global demand, energy shortages and rising production costs.
— ANI
Reader Comments
Good to see Bangladesh focusing on CMSMEs and agriculture. We have similar schemes in India, but implementation is always the challenge. Hope they learn from our mistakes. 🤞
As someone who's worked with Bangladeshi suppliers, this is a bold move. The 10% interest rate on bank deposits seems high, but it might attract liquidity. However, the dollar shortage could still hamper import-dependent sectors. India's forex reserves are stronger by comparison.
Respect to Bangladesh for taking decisive action. But 60,000 crore taka is roughly ₹4,700 crore Indian rupees, which seems modest for a country of their size. We spent much more during similar crises. Still, every step counts. 🇮🇳🤝🇧🇩
The allocation for North Bengal Agriculture Hub and export diversification is smart. Bangladesh is trying to reduce dependence on garments. India should take notes—we also need to diversify beyond IT and services. But is 10% interest on bank deposits sustainable? Seems risky.
This reminds me of India's PLI schemes and COVID relief packages. The challenge will be disbursing funds to actual factories without corruption. Bangladesh has improved governance, but we've seen similar pledges go awry. Let's hope for the best.
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