Bangladesh seeks US assistance to manage Tk 22 trillion in debt

Bangladesh has sought assistance from the United States to manage its massive public debt, which has exceeded Tk 22.59 trillion, and secure financing at lower costs in the future. The US Treasury Department will provide technical assistance in debt risk analysis, raising funds through government bonds and forecasting government revenue and expenditure.

These issues were discussed at a meeting between a high-level Bangladeshi delegation and the US Treasury Department on Wednesday on the sidelines of the annual meetings of the World Bank and the International Monetary Fund (IMF) in Bangkok. Relevant sources said the United States had assured Bangladesh of assistance based on its needs.

The meeting was held at 10 a.m. local time at the Queen Sirikit National Convention Center in Bangkok. The Bangladeshi delegation was led by Finance Minister Amir Khasru Mahmud Chowdhury. The US delegation was led by Robert Kaproth, deputy assistant secretary for the Asia Pacific region at the US Treasury Department. The hour-long meeting focused on various technical aspects of debt management.

After the meeting, the finance minister said discussions with the US Treasury Department covered debt management and overall bilateral relations. Bangladesh imports various products from the United States, including aircraft, fuel oil and soybeans. He said Bangladesh’s efforts to maintain the balance of external transactions and the need for US cooperation in this regard were also raised at the meeting.

Rashed Al Mahmud Titumir, the prime minister’s economic adviser, told Agamir Somoy that discussions with the US Treasury Department covered overall issues. He said the United States had assured Bangladesh of all kinds of assistance, taking the country’s challenges into consideration.

What kind of assistance will be provided for debt management?

The US Treasury Department will help modernize Bangladesh’s debt management through debt risk analysis, annual borrowing plans, government bond market development and strategies that take interest rates and repayment schedules into account. The assistance will also cover government revenue and expenditure accounting, forecasting when and how much money will be needed, improving debt management laws and policies, and strengthening communication with investors.

In simple terms, the United States will help Bangladesh plan in advance how much money the government will need and when it will need it, where it can borrow at lower costs, and when interest and principal payments on existing loans will fall due. This could reduce the need to borrow at higher interest rates when sudden financing shortages arise. Developing the government bond market could also expand opportunities to raise funds across different maturities.

Government debt reaches Tk 22.59 trillion

According to government documents, Bangladesh’s total public debt stood at Tk 22.59 trillion as of March 2026. This included Tk 8.82 trillion borrowed from the banking sector, Tk 4.13808 trillion from nonbank sources, including savings certificates, and Tk 9.64 trillion in foreign debt.

The government borrows domestically through banks, savings certificates and government bills and bonds. It also uses foreign loans to implement development projects. Interest and principal on these loans must be repaid according to their respective schedules. If the government has to spend more on debt servicing, it may have less room to allocate funds to other sectors, including development, education and health. Repaying foreign loans also requires foreign currency, which can put additional pressure on the country’s external transactions.

Advance planning could reduce borrowing costs

One of the most important aspects of US assistance is forecasting government revenue and expenditure. Knowing in advance how much revenue will be collected, how much will be spent and when debt repayments will be due can make it easier to arrange the necessary funds. This could reduce pressure to borrow at higher interest rates at the last minute.

It will also be possible to assess in advance which borrowing sources offer lower interest rates, which loan maturities are more advantageous and which debts could create greater repayment pressure in the future. However, the benefits of these initiatives will depend on implementation, interest rates and investor interest.

Initiative to seek US assistance began in 2025

Bangladesh’s initiative to seek US assistance to modernize public debt management began on January 29, 2025. The then finance adviser, Dr. Salehuddin Ahmed, wrote to US Treasury Secretary Scott Bessent seeking assistance in five areas. These included forecasting government cash flows, maintaining revenue and expenditure accounts, modernizing debt management, increasing revenue collection and improving revenue administration.

Several meetings were subsequently held between officials from the two countries. In October 2025, the US Treasury Department conducted a virtual assessment. Based on the assessment, approval was given on December 3, 2025, to begin designing the project.

In June this year, a US Treasury Department delegation visited Bangladesh and held discussions with officials from the Finance Division, Economic Relations Division, Directorate of National Savings and Bangladesh Bank. Most recently, a letter sent to the finance secretary on July 24 conveyed preliminary approval for the project.

The next steps in implementation are to finalize the terms of reference (ToR) and sign a memorandum of understanding between the two sides. A senior Finance Division official said the US Treasury Department would send a draft of the terms of reference soon. Arrangements for signing the agreement will be made after the draft is reviewed.

Finance Secretary Dr. Md. Khairuzzaman Mozumder has also recommended moving the initiative forward. He said efforts should continue to restore economic stability and strengthen public debt management through this initiative.

However, technical assistance alone will not ease the debt burden. To realize its benefits, the government must increase revenue, maintain spending discipline and borrow in a planned manner.