Textiles and clothing exporters will continue enjoying the enhanced credit limit under the Export Development Fund (EDF) for six more months as the impacts of the coronavirus pandemic persist, the Bangladesh Bank said.
The members of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Textile Mills Association (BTMA) will be able to use the facility until June 30, according to a central bank notice.
In May last year, the central bank widened the credit limit under the fund to $30 mn from $25 mn for the rest of the year for the BGMEA and BTMA members as part of its efforts to help them tackle the economic downturn deriving from the coronavirus pandemic.
The central bank has taken the decision following a request from the exporters affiliated with the two associations, a Bangladesh Bank official said. “The decision will give a boost to exports in the coming months.”
Financing from the EDF is extended to manufacturers so that they can purchase raw materials in the form of back-to-back letters of credit. This helps them produce export-oriented items. After the pandemic hit the country, the central bank expanded the fund’s size by $1.5 bn to $5 bn to protect the exporters as shipment collapsed because of the economic slowdown. The BB also cut the interest rate on the loans under the scheme. Exporters can borrow at a rate of 1.75 per cent from 2 per cent previously.
