Commitments and disbursements of foreign assistance for development projects in Bangladesh fell in the July-October period of the current fiscal year, which may deepen the pressure on foreign exchange reserves.

According to data from the Foreign Aid Budget and Accounts of the Economic Relations Division (ERD), commitments declined by around 85 per cent year-on-year in the first four months of the current fiscal year while disbursements were down 25 per cent.

Commitments reduced to $413 million -- $300 million credit and the rest grant -- from $2,761 million.

The disbursements slipped 25 per cent year-on-year  to $1,977 million  in July-October this year  from $2,626 million in the identical period a year earlier.

An ERD official said the decline was an outcome of the global economic crisis alongside a go-slow strategy of the government and development partners.

However, negotiations are ongoing for loans and agreement signings are in the pipeline for a number of projects, said the official, adding that the situation may improve in the coming days.

Japan disbursed the highest, $580 million, against a number of mega projects, including the Matarbari coal-fired power plant, the Bangabandhu Sheikh Mujib railway bridge, and the third terminal of the Hazrat Shahjalal International Airport.

Next was China with $453.73 million, followed by the World Bank with $365.23 million and the Asian Development Bank with $240.77 million.

In the four months to October, the government repaid $724.27 million of foreign debts whereas it was $749.17 million during the corresponding period in the previous fiscal year, ERD data showed.

The disbursements slipped 25 per cent year-on-year to $1,977 million in July-October this year from $2,626 million in the identical period a year earlier

The foreign currency reserves of Bangladesh have been under pressure for months for higher import costs, fuelled by the Russia-Ukraine war.

The reserves stood at $46.4 billion at the end of 2020-21 and $41.83 billion at the end of the last financial year. But it fell to $34.06 billion on November 23.

The decline in both commitments and disbursements came after the government received the highest-ever foreign assistance of $10 billion in the fiscal year of 2021-22, which ended in June. 

The ADB topped the fund disbursement list with $2.57 billion. The Manila-based multilateral lender provided around $1 billion in assistance for Covid-19 vaccinations.

Japan was the second-largest lender with $2.20 billion and the World Bank came third with $1.67 billion in aid in the last fiscal year.