In the face of rising demand from exporters, the central bank yesterday increased the size of its export development fund by 33 percent to $2 billion.The size of the fund was last raised in June last year — to $1.5 billion. Exporters get foreign currency loans from the fund at almost one-third the rates commercial banks charge.Kazi Sayedur Rahman, general manager of Bangladesh Bank’s foreign exchange reserve and treasury management department, said a hike in demand and adequate reserves of foreign currency have prompted them to increase the size of the fund.The revolving fund was introduced at just $100 million in 2006. Its size rose to the present level from only $200 million five years ago, riding on demand and swelling foreign exchange reserves, now nearly $24 billion.The interest rate for loans from the fund is 2.5 percent plus LIBOR (London Interbank Offered Rate). Businesses from various sectors, including garments, can take loans worth $1 million to $15 million for a maximum of 180 days.lso, by a notice yesterday, the BB raised exporter’s retention quota (ERQ). The central bank allowed exporters to retain specified parts of their export earnings in foreign exchange, for utilisation without prior approval from the BB for bonafide business expenses abroad, including maintenance of offices abroad, import of raw materials, machineries and spares.The ERQ for exports of high domestic value-added merchandise was raised to 60 percent from 50 percent now.The quota for merchandise exports of high import contents (like apparels using woven fabric) rose to 15 percent from existing 10 percent, according to the notice.The ERQ for export of services increased to 60 percent from existing 50 percent of repatriated export receipts.
Source: https://www.thedailystar.net/business/export/export-fund-raised-2b-88372
