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IFC proposes issuance of ‘taka bonds’ worth $1 billion in Bangladesh

 
 

IFC officials for South Asia made the
proposal at a meeting with Finance Minister
Abul Maal Abdul Muhith at the World Bank
headquarters in Washington on Saturday.
The minister told journalists he had
responded positively to the proposal.
“We’ve responded to their proposal. We’ll
start work on that immediately after I return
home. The bonds will be issued as soon as
possible,” he said.
Muhith said the government had received
several proposals on the issuance of taka
bonds. “But the IFC proposal seems very
positive.”
Bangladesh has ‘dollar bonds’ for
expatriates but these will be the first ‘taka
bonds’ in the country.
The IFC has already issued local currency
bonds in India worth $10 billion.
The second day’s proceedings of the World
Bank and International Monetary Fund’s
spring meetings began on Saturday with a
photo session of the board members.
IMF Managing Director Christine Lagarde
and the finance ministers of the member
countries joined the session at the IMF
headquarters.
The Bangladesh finance minister was in the
second row.
Later, Muhith held a meeting with officials of
the World Bank’s South Asia and
Communications Infrastructure departments.
World Bank Vice President for South Asia
region Annette Dixon led his side at the
meeting.
The bond issuance proposal came at another
meeting with IFC officials led by its
Executive Vice PresidentJin-Yong Cai.
Finance Secretary Mahbub Ahmed, Economic
Relations Division Secretary Mohammad
Mejbahuddin and National Board of Revenue
Chairman Nojibur Rahman were present at
the meetings.
The finance minister later told reporters:
“There is good news for Bangladesh
involving $1 billion. IFC has formally placed
a proposal to issue taka bonds. We’ve
accepted it happily.”
He said the Corporation will raise the $1-
billion from the international market and
release it in Bangladesh in taka form.
Anyone can purchase the bonds, he added.
Muhith expects them to be attractive to
expatriate Bangladeshis.
“Foreign banks offer zero interest on
deposits. But there will be 4-5 percent
interest on taka bonds,” he said.
The minister said: “Our expatriates will
benefit if they investment their money in
bonds instead of depositing that in banks.”
He said he had agreed to the bond proposal
to raise investment in the country.
“Both the Bangladesh government and the
IFC will benefit if the bonds are issued.”
To a question on Bangladesh’s gains at the
spring meetings, the minister said: “The IFC
bond and aid for the transport sector.”
He said several World Bank projects were
currently on in the Bangladesh road
transport sector and that the global lending
agency was keen to support other sectors as
well.
“We told them the Bangladesh government
is attaching a great deal of importance to
rail and water transports. We’ve sought
assistance for these two. They have taken up
plans on these.”
He said the plans would be finalised through
discussions.
A 15-member delegation led by Muhith is
participating in the spring meetings, 2015,
that began on Friday.
It will end on Sunday.

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