Interest payments against foreign loans shot up 162 percent year-on-year in the first nine months of the last fiscal year as debt servicing of loans taken for some mega projects has started.

The allocation for interest payments of domestic and foreign loans will likely increase by 38 percent to Tk 129,000 crore in the upcoming budget due to a significant hike in the cost of borrowing from both sources

The interest costs for domestic loans increased 13.58 percent to Tk 42,313 crore while the same for foreign credits surged 195.81 percent to Tk 7,910 crore.