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Bangladesh to get $1.5bn in IDB loan PDF Print E-mail
Friday, 06 June 2008

Islamic Development Bank has agreed to sign loans for Bangladesh at a 1.75 percent interest rate in addition to Libor to finance oil import, finance adviser AB Mirza Azizul Islam said Thursday.

The bank also raised the amount of yearly loans to $1.5 billion from $1 billion for Bangladesh, the adviser told reporters on his return from Jeddah where he had attended the 33rd annual meeting of IDB.

Mirza Aziz hoped that the inflation rate would come down to a single digit in the next fiscal year.

The adviser said the government would take steps to boost purchasing power of people, particularly "fixed-income" group, as they bore most of the brunt of rising food prices.

"The condition of low-income people was relatively better."

"Income of the low-income group, including rickshaw-pullers, increased. Government allowances for the elderly and widows benefited them a bit," he said.

The adviser said the social safety net would be widened in the new budget. A scheme will be undertaken to ensure employment of poor people.

Mirza Aziz said he did not find any point making a development budget, with people starving.

"The government's main target should be to feed people. Development comes next."

Government employees would get dearness allowances and there would be guidelines in the budget for fiscal 2008-09 for employers in the private sector to increase the salaries of employees, he said.

On the price hike, the adviser said the government cut import duty on many goods including rice and wheat to zero to keep prices stable, but prices remained unchanged.

"Budget cannot cut prices. What matters most is the global market. A review on the global market shows that the situation will remain in our favour in the coming days," he said.

Price of wheat decreased on the global market. "Fuel prices also showed signs of coming down and there was an indication that rice prices would not increase," the adviser said.

On oil prices, the adviser said the United States had good reserves. "OPEC member states are better off. So there is no possibility of a fuel price hike."

Asked how much money siphoned out of the country had been brought in, Mirza Aziz said he did not have the precise figure.

"The retrieved money was deposited to Bangladesh Bank," the adviser added.

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