Short-term corporate borrowing from external lenders has reversed a months-long decline, rising slightly to $11.40 billion as of June 2024, according to the latest data from the Bangladesh Bank. 

This uptick in borrowing comes after a sustained decline in short-term foreign debt over the previous months. The outstanding balance had dropped from $12.43 billion in September 2023 to $11.79 billion in December, continuing to fall into early 2024, with figures reaching $11.25 billion in January and $11.04 billion in March.

Business leaders and banking officials attribute the recent increase to a complex interplay of domestic and international factors. Domestically, companies are grappling with inconsistent energy supplies, higher borrowing costs, and volatility in the foreign exchange market.

These challenges have made domestic funding more difficult to secure, especially given the central bank’s tight monetary policy to control inflation.

Internationally, easing import restrictions and stabilizing global interest rates have made overseas borrowing more attractive.

The latest figures also indicate that the United Arab Emirates (UAE) remains the largest creditor for short-term private external debt, with $2.25 billion. Other major creditors include Singapore with $1.88 billion, Hong Kong with $1.05 billion, China with $0.96 billion, India with $0.74 billion, and the United Kingdom with $0.72 billion.