Staff Reporter :
After seven consecutive months of decline, Bangladesh’s private sector short-term external debt recorded a notable rebound in February, increasing by $354.64 million (3.6 per cent) to reach $10.16 billion.
The unexpected rise contrasts with earlier projections of a continued slowdown and suggests a renewed appetite for foreign borrowing among private firms.
The primary driver of the increase was buyer’s credit, which rose to $5.29 billion from $5.08 billion in January – an increase of $ 208.92 million. Short-term loans also contributed, climbing by $101.07 million to $2.15 billion.
Import financing facilities registered a modest rise, up by $8.99 million to $652.63 million. Back-to-back letters of credit (LCs) increased by $29.81 million, reaching a total of $1.34 billion. Other short-term liabilities saw a slight uptick to $717.22 million.
The February figure marginally surpassed the total short-term debt for 2024 to date, which stood at $10.13 billion. This marked a 14 per cent decline from 2023’s $11.79 billion and a significant correction from the record $16.42 billion in 2022.
Over the past decade, Bangladesh’s private sector short-term external debt has expanded markedly, rising from $3.78 billion in 2014 to its peak in 2022. The subsequent decline has largely been attributed to tighter global liquidity conditions.
Pvt Sector Foreign Debt This recent uptick may indicate a cautious return to external financing channels, as businesses look to bridge working capital shortfalls and secure imports in anticipation of seasonal demand.
Meanwhile, as of the end of December 2024, the outstanding public foreign debt stood at $103.64 billion, with long-term debt accounting for at least $84 billion. Private sector foreign debt totalled $19.42 billion. Notably, between September and December 2024, the country’s overall outstanding foreign debt declined by $736 million.
