‘Discussion with IMF focused on reforms not on loan release’

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Staff Reporter :
The International Monetary Fund (IMF) delegation’s visit was a scheduled tour which primarily focused on macroeconomic developments and various reforms related with the fund supported by IMF. The second tranche of the loan was not discussed this time, according to the Bangladesh Bank (BB) spokesperson on yesterday.

As the IMF staff team will visit Bangladesh again in October, and the second installment of the loan will be disbursed in later part of the year, issues of fulfilling the loan conditions are primary concerns at this moment.

Spokesperson of the central bank, Mezbaul Haque, shared the information on Sunday after meetings between the officials of the BB and the IMF.

To Implement IMF recommendations are challenging, especially with the current inflationary pressure world witnessed. Increasing commodity price propelled by global fuel price hike added further pressure to meet the challenges, he added.

Following the closing meeting of the visiting IMF delegation visit with the central bank the spokesperson of Bangladesh Bank said, the central bank highlighted various reforms related with IMF fund support.

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The spokesperson of the central bank claimed that the IMF staff team satisfied with the steps taken by Bangladesh Bank.
Mezbaul Haque also said that the calculation of net forex reserve, as per the IMF’s advice, will be published in the next monetary policy.

”A single dollar exchange rate has almost been implemented. The difference between the rate at which Bangladesh Bank is selling dollars and the rate at which various commercial banks are collecting import expenditure and export earnings is almost two percent.”
As per rule, if this difference is within 2 percent, it is called single exchange rate. The country is close to the single exchange for the US dollar rate as per IMF demands, Spokesperson added.

Regarding the gradual reduction of Export Development fund (EDF) from $ 7.5 billion to $ 5.00 billion Mezbaul Haque said, “We have already formed an alternative fund of Tk 10,000 crore in local currency. Hence, there will be no negative impact on exports due to reduction in EDF fund.

Addressing recent news reports on Country’s unrealized export, Haque said that there was no observation from the IMF that the country has $3 billion unrepatriated. As of now, export proceeds of around $1.4 billion are waiting for being repatriated, he informed.
Earlier on January 30 this year, IMF approved a $4.7 billion loan for Bangladesh to support the country’s economic policies in a development. Out of the amount, Bangladesh has received the first installment of $476 million in last February. The remaining amount will be in six equal installments of $704 million each.

Of the $4.7 billion, $1.3 billion can be repaid over a 20-year horizon with a grace period of ten years with 2.2 percent of interest. The remaining amount must be paid back within ten years; the grace period for a portion of the sum is 3.5 years and for another portion 5.5 years.

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