A government committee has suggested that the government should consider the risks before issuing the country\u2019s first ever sovereign bond to raise funds for infrastructure projects from the international money market, officials said.\u00a0The committee led by Bangladesh Bank deputy governor Shitangshu Kumar Sur Chowdhury in its interim report has identified the risks including appreciation of the local currency against the dollar and fall in soft loans from the donor agencies.
\nThe report which was sent to the finance ministry recently stated that the prevailing high political tension ahead of the next national elections might affect rate of interest and repayment arrangement for the bond.
\nThe suggestions made by the report are likely to deal a blow to the government\u2019s plan to raise around $1,000 million to meet the foreign currency needs for the infrastructure projects including Pamda Bridge project.
\nFailed to convince the donor agencies to fund the bridge project because of alleged corruption in the multi-billion infrastructure project across the river Padma the government decided to build the bridge with its own finance.
\nAs part of the plan finance minister Abul Maal Abdul Muhith had announced that there would a buffer of $1.8 billion, a substantial amount of which would be raised from the international market through issuing bond.
\nSK Sur Chowdhury admitted that the committee submitted the interim report but he did not disclose anything of it.
\nHe told New Age on Saturday over phone that the matter was very sensitive. \u2018I need time to talk on the issue,\u2019 he said.
\nBB governor Atiur Rahman who is now attending an Asian Development Bank programme in New Delhi told IFR Asia of Reuters that looming elections might prevent the county from issuing bond in the current year.
\n\u2018A lot of technical work is going on and we will be launching this bond at a very opportune moment, but we are quite far, I would say,\u2019 said Atiur Rahman.
\nBangladesh is expected to elect a new parliament within 90 days of expiration of the term of the current one on December 29. The political uncertainty ahead of the polls may make a bond offering this year impractical.
\nThe interim report said issuance of bond would increase the amount of foreign currency in reserve which would make further difficult for the BB to keep the value of the dollar against the local currency stable.
\nThe BB has already purchased big amount of dollars in last one year to keep the value of greenback stable for the sake of export and remittance.
\nThe report pointed out that the export and remittance would be discouraged if the value of the local currency goes up.
\nIt also pointed out that donors\u2019 contribution to development projects through funding at low interest rate would be discouraged. The committee stated that the government\u2019s negotiation with the donors was vital.
\nReferring to its discussion with the International Monetary Fund the committee said the IMF\u2019s views should be given due consideration.
\nThe IMF suggested to issue bond from a position of strength and to avoid a rush to the market with non-strategic view.
\nThe market prefers low political risk, an important factor in the context of Bangladesh, the IMF said.<\/p>\n

-with New Age<\/span> input<\/p>\n","protected":false},"excerpt":{"rendered":"

A government committee has suggested that the government should consider the risks before issuing the country\u2019s first ever sovereign bond to raise funds for infrastructure projects from the international money market, officials said.\u00a0The committee led by Bangladesh Bank deputy governor Shitangshu Kumar Sur Chowdhury in its interim report has identified<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_editorskit_title_hidden":false,"_editorskit_reading_time":0,"_editorskit_is_block_options_detached":false,"_editorskit_block_options_position":"{}","footnotes":""},"categories":[4],"tags":[1986,10604,10605],"yoast_head":"\n