Finance and commerce adviser Salehuddin Ahmed on Tuesday said that they had asked China for restructuring its loans given to the immediate past government for development projects on high interest rates and short grace periods.
He made the request for reduced interest rates and increased grace periods for the China-funded projects when Chinese ambassador in Bangladesh Yao Wen paid a courtesy call to the adviser at the finance ministry of the interim government.
鈥榃e want repayment period to be extended by 10 years鈥�, said the finance and commerce adviser of the interim government led by Nobel laureate professor Muhammad Yunus since prime pinister Sheikh Hasina was ousted from power on August 5 amid mass uprising.
The Chinese ambassador admitted that they received some requests and wishes during the meeting, and without elaborating what聽 they were he said that there were scopes for discussion on the issues.
The Chinese ambassador highlighted that the relation between Bangladesh and聽 China was based on mutual respect as well as benefits.
Calling the meeting with finance adviser constructive, the Chinese ambassador said that they had already extended support to the interim government committed to keep the country鈥檚 development.
Economic Relations Division officials who attend the meeting said that loans worth four billion had been disbursed so far by China against a commitment of $7 billion.
Some of the Chinese funded projects, including a tunnel underneath Rriver Karnaphuli in Chattogram, have failed to fulfil major aims, and a sewage treatment plant at Dasherkandi in Dhaka has remained inoperative despite inauguration of the project in 2023.
The government鈥檚 outstanding foreign debt already stood at $62.4 billion in FY23, marking more than a threefold increase in 14 years, and the outstanding domestic debt increased to Tk 10.35 lakh crore at the end of 2023.
The foreign debt as a percentage of GDP increased to 44 per cent in FY24 from 37 per cent in FY20, and the domestic debt dropped to 56 per cent in FY24 from 63 per cent FY20, according to the latest debt strategy released by the Finance Division in July.
Among the bilateral lenders, Japan stands out as the biggest creditor, accounting for 42 per cent of the bilateral debt. Russia, China, India and South Korea are the other major sources of bilateral external financing accounting for 25 per cent, 21 per cent, 5 per cent and 3 per cent respectively.
Chinese loans increased to 21 per cent of the total external debt in FY24 compared with 6 per cent in FY20.
Noting that the interim government is aware of the fact, the finance and commerce adviser said that loans would be taken in future to implement projects serving the best interest of people.
Answering a question, the finance and commerce adviser dismissed the speculation regarding withdrawing the Tk 1,000 note from the market.
Earlier, the adviser had also a courtesy call with Canadian high commissioner to Bangladesh Lilly Nicholls at his office.