Export development fund size rises to $6bn
The move is aimed at enhancing export earnings amid Covid-19
The size of the Export Development Fund (EDF) has been increased again after three months, with it reaching $6 billion.
Asked about the $500 million increase in the fund, Kazi Sayedur Rahman, deputy governor of the Bangladesh Bank, told The Business Standard the move was aimed at growing export earnings and exporters' competitiveness in the pandemic.
In March, the size of the fund was increased from $5 billion to $5.5 billion.
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Earlier in April last year, the size of the fund was increased from $3.5 billion to $5 billion.
Under back-to-back letters of credit, members of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Bangladesh Textile Mills Association (BTMA), and other export organisations receive loans from the EDF to increase raw material import facilities.
BGMEA and BTMA members borrow more from the EDF and their credit limit is also higher. They can borrow up to $30 million.
Shahidullah Azim, BGMEA vice-president, said they had demanded the EDF be raised to $10 billion.
He said loans received from the fund play a key role in meeting import costs.
Exports will rise further if the fund size can be increased, he added.
In October last year, the interest rate on loans taken from the EDF was reduced from 2% to 1.75%.
The EDF was formed in 1989 to provide low-interest loans in foreign currency to continue the ongoing trend of development and expansion of export-oriented industries.
At the time, it was a $3.9 million fund.
