International Monetary Fund has raised ceiling of non-concessional external debt by $1.25bn as of June 2014 for Bangladesh.
Earlier, the ceiling of the debt taken from international sources now reached $5.75bn from $4.5bn, according to an IMF staff report.
The lender added the new ceiling would be $6bn for the July-December period of 2014.
Bangladesh’s officials said ceiling has been raised to meet appetite of external borrowing for the projects taken by the government at the end of its tenure. The last-moment projects are usually politically motivated.
The report came after approving the fourth instalment of ECF on November 27.
According to the report, the total loan and guarantee stands at $5.89bn from July 2013 to December 2014.
The government has already received non-concessional loans and supplier credits from China and India at the end of its tenure.
Dr Zaid Bakht, research director of Bangladesh Institution of Development Studies (BIDS) said such high cost foreign loans might result in macro-economic instability in future.