IMF team reviews Bangladesh’s compliance with loan package conditions
Dhaka, Apr 25 (EFE).- A team of the International Monetary Fund started a weeklong visit to Bangladesh on Tuesday to review the implementation strategies for reforms it had proposed while approving a $4.7 billion support loan package for the country in January.
The IMF Asia and Pacific Division head, Rahul Anand, will lead the delegation in meetings with Bangladesh Bank, the finance ministry, and National Board of Revenue officials until May 2, authorities said.
Md Mesbaul Haque, executive director and spokesperson of Bangladesh Bank, told EFE that the team would meet the central bank and other government authorities to discuss macroeconomic issues related to the loan package on Tuesday.
“They will start their kick-off meetings today. Another round of meetings will be held before they wrap up their visit,” he said.
Some reform proposals made by the IMF, including the expansion of the tax network, will likely be discussed in the meeting, among other issues, he said.
On Jan. 30, the IMF Executive Board approved a $4.7 billion loan package for Bangladesh amid a worrying state of the country’s economy.
As part of the 42-month borrowing package, Bangladesh will get $3.3 billion under the Extended Credit Facility and the Extended Fund Facility arrangements.
The IMF board also approved $1.4 billion under the newly created Resilience and Sustainability Facility for Bangladesh, making it the first Asian country to access the fund.
While agreeing to the loan package, the IMF made several reform proposals that it said would focus on “creating fiscal space to enable greater social and developmental spending; strengthening the financial sector; modernizing policy frameworks; and building climate resilience.”
Bangladesh Bank spokesperson Haque said that the country had already received $476.2 million in the first installment of the loan immediately after its approval, with the next installment due in June.
Bangladesh has been facing multiple economic challenges in recent months, with inflation jumping from 5.86 percent in January 2022 to 8.57 percent a year later.
The authorities raised fuel prices by almost 51 percent in August, which drove inflation to a nine-year high of 9.52 percent that month.
The inflation rate remained consistently high at 9.10 percent in September, 8.91 percent in October, 8.85 percent in November, and 8.71 percent in December, according to the Bangladesh Bureau of Statistics.
The IMF said Bangladesh’s robust economic recovery from the Covid-19 pandemic was interrupted by Russia’s war in Ukraine.
It has led to a sharp widening of Bangladesh’s current account deficit, a depreciation of its currency, the taka, and a decline in foreign exchange reserves.
The country is currently facing a severe dollar crisis, with the country’s foreign exchange reserves dropping to $31.142 billion in March 2023 from $44.146 billion in March 2022. EFE