Dhaka, Bangladesh (BBN)– The central bank of Bangladesh has increased the allocation of Export Development Fund (EDF) scheme by US$500 million aiming to facilitate the country’s exporters for boosting their business activities.

The EDF allocation rose to $3.50 billion from $3.0 billion earlier, according to officials.

The enhanced EDF scheme will also help boost the inflow of foreign currency in the local market, they explained.

Talking to the BBN, a senior official of the Bangladesh Bank (BB) said the central bank has enhanced the allocation of the low-cost fund considering the growing demand for the exporters recently.

He also said such enhancement of the fund will also help minimising mismatch between demand and supply of the foreign exchange in the market.

The demand for the US dollar is gradually increasing, mainly due to higher import payment pressure, particularly of capital machinery for power plants, intermediate goods, petroleum products and LNG (liquefied natural gas).

Under the existing provisions, the EDF financing is allowed for input procurements against back-to-back import letters of credit (LCs) or inland back-to-back LCs in foreign exchange, by manufactures producing final output for direct export and also by producers of local deliveries to manufacturers of the final export.

The EDF loans from the central bank are payable by the banks upon receipt of exports proceeds within 180 days from the date of disbursement, extendable by the BB up to 270 days in case of a longer period for repatriation of export proceeds.