DHAKA, Bangladesh (Diya TV) — Bangladesh yesterday formally approached China for the lowering of interest rates as well as the extension of the repayment period for its loans, moves that are likely to ease the financial burden on the South Asian nation. Bangladesh’s Foreign Affairs Adviser, Touhid Hossein, met Chinese Foreign Minister Wang Yi in Beijing this week during a visit there as part of negotiations about the terms of a proposed deal under China’s Belt and Road Initiative (BRI).
Dhaka has asked China to lower the interest rate on its loans from the current 2-3% to 1%, waive the commitment fee, and extend the repayment period of the Preferential Buyer’s Credit (PBC) loan and Government Concessional Loan (GCL) from 20 years to 30 years, according to a statement from Bangladesh’s Ministry of Foreign Affairs (MoFA).
Beijing has provisionally agreed to a 10-year extension of the repayment period in exchange for an eventual final agreement and has reportedly shown openness to lowering interest rates. This action is part of China’s strategy to deepen relationships with Bangladesh as part of the ambitious BRI infrastructure development initiative, in which China has heavily invested in the region.
Bangladesh’s foreign debt burden has increased recently. Therefore, Bangladesh is seeking financial relief as it tries to maintain stable economic growth and continue its development projects under the BRI framework.
