The central bank has increased the allocation for the export development fund (EDF) by 20 per cent to US$ 1.2 billion from $ 1.0 billion to meet the growing demand from the country's exporters.
"We've enhanced the allocation for the EDF scheme to help the country's exporters gear up their business activities," a senior official of the Bangladesh Bank (BB) told the FE Sunday.
He said the BB was providing the re-financing facility to the exporters through commercial banks as a short-term liquidity support. "Other provisions related to the EDF will remain unchanged."
Currently the exporters are getting the foreign currency loans through commercial banks at the interest rate of London Inter-bank Offered Rate (LIBOR) plus 1.50 per cent instead of 2.50 per cent earlier, as the central bank on December 15 last year slashed the interest rate by 1.0 percentage point.
The BB slashed the interest rate for its EDF scheme for the next six months to help exporters recover their losses caused by the political unrest that took place late last year.
"The exporters will get the foreign currency loans at the interest rate of LIBOR plus 1.5 per cent until June 30 this year," the BB official explained.
Under the existing provisions, the EDF financing is offered for input procurement against back-to-back import letters of credit (LCs) or inland back-to-back LCs in foreign exchange, by manufacturers producing final output for direct export and also by producers of local deliveries to manufacturers of final export.
The EDF loans from the central bank are payable by the banks upon receipt of exports proceeds within 180 days from the date of disbursement, extendable by the BBup to 270 days in the event of a longer period for repatriation of export proceeds, according to the central banker.
BB raises export dev fund allocation to $ 1.2b
Siddique Islam | Published: April 07, 2014 00:00:00 | Updated: November 30, 2024 06:01:00
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