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Apex bank to pump in more funds for exporters
01 Oct '10
1 min read
Bangladesh Bank is set to pump in an additional $100 million into the Export Development Fund (EDF) to address the increasing demand of exporters, who use these funds to buy foreign inputs after signing an export contract.
EDF has been supporting goods' manufacturers for export markets since 1989, to pay for foreign inputs like cotton, with financing in foreign exchange. These funds hold around $300 million, at present.
Exporters return these funds back with 3.5 percent rate of interest, very less than the rate of interest on commercial borrowings which is 12 percent.
Last year in December, funds were increased two-fold to around $300 million to help exporters to deal with the global recession. In October 2007, these funds were augmented from $100 million to $150 million.
This year, as the fund has been exhausted and the demand has recently acquired momentum, especifically from apparel exporters, it would be increased by $100 million soon.
This decision has been hailed by the exporters, who expect that the fund will rise gradually up to $1 billion.
EDF has been supporting goods' manufacturers for export markets since 1989, to pay for foreign inputs like cotton, with financing in foreign exchange. These funds hold around $300 million, at present.
Exporters return these funds back with 3.5 percent rate of interest, very less than the rate of interest on commercial borrowings which is 12 percent.
Last year in December, funds were increased two-fold to around $300 million to help exporters to deal with the global recession. In October 2007, these funds were augmented from $100 million to $150 million.
This year, as the fund has been exhausted and the demand has recently acquired momentum, especifically from apparel exporters, it would be increased by $100 million soon.
This decision has been hailed by the exporters, who expect that the fund will rise gradually up to $1 billion.
Fibre2fashion News Desk - India
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