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BNP govt repays record $2.04b foreign debt in five months
Published : Tuesday, 8 September, 2026 at 6:35 PM
Observer Online Report
The BNP government has repaid a record $204.76 crore in foreign debt principal and interest in its first five months, overcoming severe financial pressures inherited from the previous Awami League administration.
According to the latest statistics from the External Resources Division (ERD), the government paid approximately Tk 25,163 crore between March and July this year. This marks the highest amount of external debt servicing ever recorded in any five-month period in the country's history.
During the same period last year, foreign debt repayments stood at $189.71 crore, or around Tk 23,310 crore. This reflects a year-on-year increase of $15.04 crore, or about Tk 1,849 crore, in debt service obligations.
The ERD report shows that the government paid $135.24 crore in principal and $69.52 crore in interests between March and July, averaging an outlay of around $41 crore per month.
The BNP government assumed office on 17 February following its victory in the 13th National Parliamentary Election, led by Prime Minister Tarique Rahman. Managing the escalating repayment installments for mega-project loans taken out by the previous administration immediately became a major economic hurdle.
Government policymakers noted that the grace periods for numerous large infrastructure and mega-project loans taken out between 2009 and 2024 have expired. As a result, both principal and interest obligations have peaked simultaneously under the current term.
Speaking to BSS, Rashed Al Mahmud Titumir, Adviser to the Prime Minister on Finance and Planning, criticized the previous Awami League government for indiscriminate borrowing without properly evaluating project "value for money" or interest rates.
He highlighted that massive financial liabilities and subsidy burdens were created in the power sector due to capacity charges. Despite inheriting a fragile economy, the current administration is prioritizing prompt, regular debt service payments to preserve the country's international creditworthiness.
Titumir added that the current government has adopted a cautious borrowing strategy. Future external and domestic loans will be strictly tied to manufacturing productivity, job creation, and clear financial returns rather than arbitrary spending.
ERD data outlines a steady surge in foreign debt servicing over recent fiscal years. Repayments rose from $267 crore in FY 2022-23 to $337 crore in FY 2023-24, and reached $409 crore in FY 2024-25.
For FY 2025-26, external debt service obligations have climbed further to $449 crore, representing a nearly 10 per cent increase over the previous fiscal year.
-SA
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Editor : Iqbal Sobhan Chowdhury
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Published by the Editor on behalf of the Observer Ltd. from Globe Printers, 24/A, New Eskaton Road, Ramna, Dhaka.
Editorial, News and Commercial Offices : Aziz Bhaban (2nd floor), 93, Motijheel C/A, Dhaka-1000.
Phone: PABX- 41053001-06; Advertisement: 41053012; 01793317829, 01550707291, E-mail: [email protected], [email protected] Online: email: [email protected] 41053014; 01550707297 Advertisement: 01550707296
