The government has scrapped a plan of creating Bangladesh Sovereign Wealth Fund (SWF) from the country’s foreign exchange reserves.
The Cabinet, chaired by Prime Minister Sheikh Hasina, cleared a proposal on the matter on Monday.
The proposal called for cancelling a previously approved decision for the creation of the fund.
The initial plan, approved in 2017 to establish the SWF with an authorized capital of $10 billion from its foreign exchange reserves, was to be used for ‘any purpose in the public interest’.
With a primary capital of $2 billion, the fund is supposed to draw $2 billion per year from the reserve.
Bangladesh’s foreign exchange reserves, which had grown rapidly during the pandemic, have now fallen to the $41.38 billion-mark as of 15 June, thanks to higher imports and lower remittance inflow.
This has raised concerns for the country about foreign exchange spending.
Amid concerns, the government planned to suspend low-priority development projects and suspend foreign travel by civil servants - the second round of restrictions after the pandemic.
