Foreign debt increasing due to taka devaluation

Mahfuz Emran: Bangladesh’s foreign debt has been increasing rapidly for the past few years. However, the growth rate has come down a lot in the last financial year. On the other hand, the local currency has been fairly stable against the dollar for the past few years. Although this rate has decreased a lot in the last two financial years. This has seen a big jump in foreign debt in domestic currency.
This information has emerged in a report published by Bangladesh Bank recently. It can be seen that in six years the foreign debt increased by $42.93 billion or 76.65 percent. However, at this time, the foreign debt increased by Tk 5 lakh 79 thousand 820 crore 30 lakh or 123.64 percent.
According to the data, the foreign debt of Bangladesh in the financial year 2017-18 was $56.01 billion. The dollar exchange rate that fiscal year was Tk 83.73. In this, the amount of foreign debt in domestic currency was four lakh Tk 46,943 crores. In the financial year 2018-19, the foreign debt position of Bangladesh increased to $62.63 billion. The dollar exchange rate that fiscal year was Tk 84.50. In this, the status of foreign debt in domestic currency stands at Tk 5 lakh 29 thousand 223 crore 50 lakh. That is, the foreign debt increased by 11.8 percent in dollar terms. But in terms of money, it has increased by 12.9 percent.
In the financial year 2019-20, the external debt position further increased to $68.55 billion. In that financial year, the dollar exchange rate was Tk 84.90. In this, the status of foreign debt in domestic currency stands at Tk 5 lakh 81 thousand 989 crore 50 lakh. In that fiscal year, foreign debt increased by 9.5 percent in dollar terms. And the money has increased by 10 percent.
In 2020-21 financial year, the amount of foreign borrowing increased a lot. At the end of that financial year, this balance increased to $81.62 billion. In that financial year, the exchange rate of the dollar decreased slightly to Tk 84.81. In this, the status of foreign debt in domestic currency stands at Tk 6 lakh 92 thousand 243 crore 50 lakh. In that fiscal year, the growth of foreign debt in dollar terms was 19.1 percent. And the growth in terms of money was 18.9 percent.
In the next financial year too, foreign debt increased rapidly. However, there was a major change in the exchange rate that fiscal year. In this, the foreign debt in domestic currency increased significantly compared to the dollar.
Analysis of the data shows that the foreign debt position for the financial year 2021-22 stands at $95.45 billion. In that fiscal year, the dollar exchange rate stood at Tk 93.45. In this, the status of foreign debt in domestic currency stands at Tk 8 lakh 91 thousand 980 crore 30 lakh. As a result, foreign debt grew by 16.9 percent in terms of dollars in that financial year, but it was 28.9 percent in terms of taka.
Meanwhile, the foreign debt position increased slightly to $98.94 billion in the fiscal year 2022-23. At that time, the dollar exchange rate stood at Tk 106. In this, the status of foreign debt in local currency stands at Tk 10 lakh 48 thousand 746 crores. As a result, the foreign debt increased by only 3.7 percent in dollar terms last financial year. However, in terms of money, it has increased by 17.6 percent.