March 28, 2024, 11:26 pm


SAMI

Published:
2020-08-17 06:44:44 BdST

BB allows exporters to avail foreign soft loan


Bangladesh Bank has given the opportunity to local exporters to take foreign loans on easy terms to deal with the impact of coronavirus on the export sector. 

This loan can be taken through the process of internationally recognized factoring (loan taken under the guarantee of the importer, exporter and two agents of the two countries with the loan export bill mortgage).

As the interest rate is lower in the international arena at present, the interest rate of this loan will also be lower.

A report by the International Monetary Fund (IMF) has recommended to speed up an internationally recognised factoring process to increase the flow of money into the export sector to weather the shock of coronavirus pandemic.

They said that if this method is used to ease the flow of money to the importing countries and it will help Bangladesh cope with the Covid-19.

Meanwhile, Bangladesh Bank has decided to provide a foreign exchange as per the market demand to absorb the shock of coronavirus.

The central bank's foreign exchange reserves are close to $3,800 crore. Dollars will be supplied to the market from the reserves to ease the price of the dollar. 

Besides, in the export sector, low-interest loans are being given to exporters from Export Development Fund (EDF), Pre-Shipment Fund and incentive packages.

Sources in the central bank said that due to the impact of the coronavirus pandemic, global economic activities have been stagnant for the last four months and the exporters of the country have been stuck with bills for goods exported to different countries.

At the same time, the demand for new products is declining and so is the export. In this context, the global financial crisis has dogged the exporters as the global money supply has slowed down. 

Many fell in financial trouble due to the decline in new export orders. In this case, even though the central bank came forward but the exporters are not getting enough money. That is why initiatives have been taken to utilise factoring.

In this regard, the former governor of Bangladesh Bank Salehuddin Ahmed said factoring is an internationally recognised financing method.

It will be very beneficial for the country now if foreign loan opportunity is utilised. But despite the consent of the central bank, the private sector is not ready yet. If the private sector is encouraged in this regard, the flow of foreign money in the country will increase.

If these funds are paid regularly, a positive image of Bangladesh will be improved in the international arena. At the same time, it will be easier to get foreign exchange in any crisis.

In this regard, President of Bangladesh Exporters Association Abdus Salam Murshedy said that the country's banks are not ready for factoring. As a result, exporters are not able to enjoy this benefit. International interest rates are now much lower. But the rate has not decreased in the country. Now if you can use low-interest foreign loans, the cost of production will go down. This will help gain competence in this race.

There is an organization called Factoring Chain International (FCI) to ensure factory management and security internationally. You have to start this process by becoming a member of the FCI. Under this, about 4 billion dollars are transacted annually. There are four types of parties involved. Of these, one is an exporter along with a representative from exporting country and one is an importer along with a representative from importing country. Only then the exporter will be able to borrow in foreign currency from abroad by mortgaging the export bill, which is not in practice at present.

Interest rates have come down in the international arena recently. Euro interest rates are in negative territory. The dollar interest rate is 34 percent and the pound interest rate is 15 percent. With the addition of 1 to 2 percent of the loan is available. As a result, the interest rate is one and a half to a maximum of two and a half percent. For this reason, if you take a loan in these currencies, the interest rate will be lower.

 

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