The government has increased the interest rates of two US dollar-denominated bonds by up to two percentage points to attract investments from Bangladesh migrants (NRBs) for boosting US dollar inflows into the country.
The Internal Resources Division of the finance ministry on Sunday restructured the interest rate of the US Dollar Premium Bond and the US Dollar Investment Bond.
The upward adjustments are aimed at wooing Bangladeshi migrants in an effort to improve the flows of the greenback and increase foreign exchange reserves, which have slumped over the past two and a half years.
As per the new rates, the interest rate on the investments in the US Dollar Premium Bond up to $100,000 will range from 6.50 percent to 7.50 percent in the first year to the third year. It is up from 4.50 percent to 5.50 percent.
Investments of up to $500,000 will fetch 5 percent to 6 percent, which were 3.50 percent to 4.50 percent previously. The return on investments above $500,000 will stand at 4 percent to 5 percent, up from 2.50 percent to 3.50 percent.
In the case of the US Dollar Investment Bond, the interest for an investment of up to $100,000 will range from 5.50 percent to 6.50 percent at maturity in the first year to the third year. It was 4 percent to 5 percent before yesterdays restructuring.
Investments of up to $500,000 will generate 4 percent to 5 percent in interests, an increase from 3 percent to 4 percent.
The return against investments of more than $500,000 will be 3 percent to 4 percent, up from 2 percent to 3 percent.
The bond return has been revised upwards at a time when the country is facing a severe dollar crisis due to higher outflows compared to inflows.
The reserves have been declining for the lower receipts in the form of exports and remittances and higher outflows through an elevated level of imports. Capital flight is also blamed for the drying up of reserves.
The foreign currency reserves stood at $20.18 billion on January 10, which was $40.7 billion in August 2021.
