Japan to provide $225 million budget support to Bangladesh

Japan will provide 30 billion Japanese Yen (equivalent to $225 Million) as budget support to Bangladesh, which will further boost the country's foreign exchange reserves.

On Monday, the reserves surged to $31.15 billion thanks to the budget support extended by the Asian Development Bank, the Asian Infrastructure Investment Bank and the International Development Association (IDA).

Japan will provide the fund under a "Development Policy Loan for Strengthening Public Financial Management". 

An "Exchange of Notes" and a "Loan Agreement" for the budget support loan under 44th Japanese ODA loan Package (1st batch) were signed on Tuesday between the Government of Bangladesh and the Government of Japan, reads a press release.

Sharifa Khan, secretary, Economic Relations Division, Ministry of Finance signed the documents on behalf of Bangladesh. Meanwhile, Iwama Kiminori, ambassador of Japan in Bangladesh and Ichiguchi Tomohide, chief representative, JICA Bangladesh Office, represented Japan.

The interest rate of this loan is 1.6%, and the front end fee (at a time) is 0.1%.The repayment period is 30 years, which includes a 10-year grace period.

Earlier, the Government of Japan provided two other budget support loans amounting to 685 million yen ($4.7 million) in 2020 and 2021.

Japan is the single largest bilateral development partner of Bangladesh.

Japanese loans and grants are being utilised in a wide range of areas including power, roads, bridges, telecommunication, agriculture, health, education, water supply and sanitation, rural development, environment, human resource development etc. Since independence, Japan has provided financial support of $30.12 Billion to Bangladesh.