Bangladesh will get a $500 million loan from the Asian Development Bank (ADB) to counter the second round of global economic meltdown, a senior official said on Monday. "The hard-term loan will be utilised for weathering the impact of the global economic crisis," said Musharraf Hossain Bhuiyan, secretary of the economic relation division of ministry of Finance.
"We have accepted the proposed loan as the country has already been affected by the second round impact of the global economic recession," he told Reuters. A Bangladeshi official of the ADB said the $500 million credit has to be repaid within five years with a three-year grace period and the LIBOR (London interbank offered rate) based interest rate will be around 2.8 percent.
The ADB already confirmed giving $500 million to the government from its "Counter-Cyclical Support Facility Fund" to face the adverse impact of the global economic recession on Bangladesh's economy. "We are expecting disbursement of the $500 million assistance by December this year" the official said.
He said the government might utilise part of the fund to support the export sectors, which had been hard hit by the global economic recession. Bangladesh's exports grew 10.3 percent to $15.56 billion in the 2008/09 fiscal year that ended in June, the lowest growth in six years, data showed, reflecting slowing demand as a result of the global economic slump.
In the current fiscal year's budget the government has a target of $350 million as budget-support credit from different donors to minimise the fiscal deficit. The ADB official said that the Manila-based lender was better placed to give more aid to Bangladesh, which it currently grants an average of $600 million a year, following the recent tripling of its capital base to $165 billion from $55 billion.
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