Will the govt borrow in dollars, Yen or Yuan?

While negotiating a new USD 4. 5 billion loan programme with the International Monetary Fund (IMF), the government is also exploring alternative ways to borrow in foreign currencies. To this end, Bangladesh is preparing to issue sovereign bonds in international markets for the first time. According to sources at the Finance Division of the Ministry of Finance, the government is considering issuing bonds in US dollars and euros, as well as exploring the possibility of Samurai bonds in Japanese yen and Panda bonds in Chinese yuan. The euro bond under consideration, however, would be dollar-denominated. The initiative aims to raise the equivalent of US$1 billion through bond issuance to diversify sources of foreign borrowing and create alternative financing options.

To achieve this goal, the government plans to hold discussions with investors or organise roadshows in London, New York and Hong Kong. However, the cost of borrowing through each type of bond will depend on interest rates, maturity, exchange rates and Bangladesh's creditworthiness in the eyes of international investors. Bonds issued by foreign governments or institutions in Japanese yen in Japan's domestic market are known as Samurai bonds. These allow issuers to raise funds from Japanese investors. Similarly, bonds issued by foreign governments or institutions in Chinese yuan in China's domestic market are called Panda bonds. Dollar-denominated Eurobonds, meanwhile, are a common means of raising funds by issuing bonds in US dollars in international markets. In this context, the term Eurobond does not mean a bond denominated in the European currency, the euro. The government plans to appoint US investment bank JPMorgan and Hong Kong-based advisory firm Bridgeworks International to manage the bond issuance. The…