Dhaka: Finance Minister AMA Muhith on Thursday said the government will create a sovereign fund worth US$ 5 billion from the Bangladesh Bank's forex reserves to issue sovereign bond for implementation of mega projects smoothly.

"We have surplus foreign currency reserves at about $31 billion. If we can take money from the reserves instead of borrowing money from foreign sources, it will be good for the country. The size of the fund would be at least $5 billion" he said.

The minister said this while briefing journalists after emerging from a meeting with a committee in this regard led by BB Deputy Governor SK Sur Chowdhury at the secretariat in the city.  

The committee handed over a report with recommendations to the finance minister for formulating the fund.

Sovereign bond, a new idea for Bangladesh, Muhith said, must be used for implementing economically sound projects. Formulation of the fund will take time as a new law is likely to be made in this regard according to the report of the committee, he added.  

Muhith said, the government will pay the interests to the BB, so that it can earn from the reserve money through investing in different sectors.