Bangladesh Central Bank to mobilise $ 7 b for infrastructure

Tuesday, 22 September 2015 00:01 - - {{hitsCtrl.values.hits}}

DHAKA (Reuters): Bangladesh’s Central Bank plans to mobilise up to $7.0 billion to develop the country’s infrastructure and boost economic growth, its governor said on Sunday.

The bank would help reach that sum by establishing a sovereign wealth fund, issuing bonds and selling dollars from its reserves to designated banks and financial institutions, Governor Atiur Rahman told Reuters.

“It is possible to mobilise the fund for development of the infrastructure to accelerate economic growth to 8% from the present 6.5%, aiming to becoming a middle-income country by 2021,” he said. “The proposed sovereign wealth fund (SWF) can invite other SWFs to co-invest in infrastructure projects,” he added. Inward remittance is a major contributor to the country’s economic growth, according to the governor. Bangladesh’s reserves crossed $26-billion mark last Thursday mainly due to lower import-payment pressure on the economy.

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Bangladeshi children play on concrete pipes beside a road in Dhaka's Lalbagh area on 18 November, 2005 - REUTERS

“We may provide foreign currency for big infrastructure projects through receiving the equivalent amount of local currency from the implementing agency so that it cannot create any adverse effect,” Atiur explained.

He said the central bank is ready to provide adequate foreign funds for big projects, adding: “We may easily invest $6-7 billion from our foreign exchange if it serves the interest of people.”

S.A. Samad, Executive Chairman of the state-run Board of Investment, on Saturday told business leaders from bilateral foreign chambers of commerce in Bangladesh that the government wants to invest $8 billion over the next few years in infrastructure to improve the economy.

“If the government provides favourable support like credit from banks or issuing sovereign bonds, then the private sector can come forward to invest,” Masud Rahman, president of the Canada-Bangladesh Chamber of Commerce and Industry (CanCham) told Reuters after the meeting with Samad.