The finance minister says keeping forex reserves in any foreign bank is not a profitable option now, as demand for money has substantially declined globally
The country's foreign exchange reserves have crossed $41 billion and are expected to reach $50 billion by December 2021.
Keeping the forex reserves in any foreign bank is not a profitable option now, as the demand for money has substantially declined globally after the Covid-19 pandemic. Therefore, the government has decided to invest in government-sponsored projects from the burgeoning reserves.
Finance Minister AHM Mustafa Kamal said this while briefing reporters after a meeting of the Cabinet Committee on Public Purchase on Wednesday.
Minister Kamal said, "If we have good projects, especially government-sponsored ones, then we can implement those from the reserves. In such cases, our money will remain within the country, would not go out, and we will also get the projects completed."
Replying to a query about whether the government has any plan to give loans to private firms from the reserves, Kamal said, "I have no opinion on this. Prime Minister Sheikh Hasina is the absolute authority to make a decision in this regard."
The finance minister thinks that Bangladesh economy's turnaround offsetting the virus fallout is extraordinary to the world. He said Bangladesh's position regarding the major indicators of the economy is much better than other countries.
"That is why the World Bank and the International Monetary Fund (IMF) are praising Bangladesh. Other countries also are trying to turn around. Bangladesh will stride forward further if the global economy turns around."
Noting that the government stimulus packages have played a crucial role in turning the economy around, the minister said the prime minister announced a $14 billion package. The economists and government critics never imagined that the government would implement such a big package.
While updating the reporters about the meeting, Kamal said the committee approved eight proposals including the import of crude oil and fertilizer at a cost of Tk5,664 crore.
Islamic Trade Finance Corporation and local banks will provide Tk5,440 crore while the government will spend Tk224 crore from its own fund.
Thirteen lakh tonnes of crude oil will be purchased in 2021 to be processed by the Bangladesh Petroleum Corporation (BPC). Bangladesh will buy it from Saudi Aramco and Abu Dhabi's Adnoc at a cost of Tk5,204 crore.
Besides, the committee approved four proposals to purchase 30,000 tonnes of urea from Karnaphuli Fertilizer Company Limited and to import 75,000 tonnes of the fertilizer from Qatar and Saudi Arabia. This will cost the country around Tk225 crore.