Monday, 28 November, 2022

IMF Team in City

Govt optimistic about getting loan

  • Staff Correspondent
  • 27 October, 2022 12:00 AM
  • Print news

Bangladesh is optimistic about getting the $4.5 billion loan it sought from the International Monetary Fund (IMF) to overcome the economic crisis.

Senior Finance Secretary Fatima Yasmin expressed the hope after holding the first meeting with the IMF team that reached Dhaka on Wednesday to discuss the issue.

“It was the first meeting with the visiting IMF team. More meeting will follow. We’re hopeful of getting the required loan,” Fatima Yasmin told reporters after a meeting with the IMF delegation at the secretariat.

Bangladesh government sought $450 million in loans from the IMF as the country’s economic woes started deepening because of free fall in the value of taka against US dollar amid soaring imports compared to exports and remittances.

The government is optimistic about getting $1.5 billion in loans by this December. However, it has to fulfill some IMF requirements to get the loan.

A 10-member IMF team, led by the lender’s South Asia and Asia Pacific region’s Chief Rahul Anand, reached Dhaka on Wednesday.

From the very first day of the visit, the team started a series of meetings with different government agencies.

It will hold meetings with National Board of Revenue (NBR), Bangladesh Bank, financial institution division, Economic Relations Division (ERD), planning ministry and commerce ministry and other agencies concerned until November 09. Bangladesh sent a letter to IMF in July this year seeking $450 million loan.

After attending the recent annual meeting of the World Bank and IMF, Bangladesh Bank Governor Abdur Rouf Talukder also informed that IMF was positive is giving the loan. 

He had held a meeting with the IMF officials on the sidelines of the meeting about the issue, official sources said.

On October 21, IMF said in a statement that this Dhaka visit’s main objective is to discuss reforms in economic and financial sectors and policies.

The discussions will be held on the loans as ECF, EFF programme, RSTF, among others, it said.

Out of the $4.50 billion loans, $1.5 billion is expected to come for fixing balance of payment (BOP), $1.5 billion as budget support and the rest $1.5 billion as Resilience and Sustainability Trust (RST) fund.

IMF provides long-term and low-cost loans to the countries under risk of climate change under RSTF.

A decade ago, Bangladesh had taken $1 billion ECF loans with seven installments.

The loans negotiations with the IMF team will include modernization of tax administration, making revenue collection system faster, enhancing revenue-GDP ratio, enactment of new income tax and duty law, ensuring good governance in the banking sector, lowering NPLs, lowering subsidies and incentives, setting reserve calculation method, among others, sources said.