IMF team to arrive this week for negotiation

Staff Reporter :
Bangladesh is going to receive loans worth $4.5 billion as budgetary support from International Monetary Fund (IMF) with reformed conditions, according to Bangladesh Bank sources.
Bangladesh Bank Governor Abdur Rouf, now in Washington, said that the ongoing dollar crisis would be solved, if the IMF-World Bank loans are available.
A delegation from IMF will arrive here this week to start negotiations on Bangladesh’s request for a $4.5 billion loan as budgetary support, official sources at the Bangladesh Bank said on Sunday.
The team from the Washington-based lending agency is likely to be led by Rahul Anand, Chief of IMF Asia and Pacific Division, they added.
The BB governor Abdur Rouf held separate discussions with Anand and IMF Deputy Managing Director Antoinette M Sayeh on Bangladesh’s loan request.
The IMF has requested the Bangladesh government to speed up its revenue collection activities as Tax-GDP ratio in the country is the lowest in South Asian countries, the central bank governor said.
The IMF also suggested for simplifying Value-Added Tax (VAT) system and modernization of National Board of Revenue (NBR) to increase revenue, he added.
He further said that high rate of non-performing loans in the banking sector is a major problemme for Bangladesh and it is very evident in state-owned banks. The IMF has recommended several initiatives to restore discipline in the sector.
Among other recommendations, strengthening corporate governance, strong monitoring for infrastructural development, proper reform of the legal system to ensure stronger cooperation for enforcement of creditors’ rights and incentives for borrowers to repay debts, Abdur Rouf said.
The governor expected that Bangladesh to be somewhat relieved by the end of next year if remittances and exports are fine.
Rouf attended the IMF annual meeting in Washington on 10-16 October.
The IMF team during its upcoming visit will focus their negotiations on conditions for the loan and financial reforms.
The sources said an agreement is likely to be inked on the programme which will then be sent to the IMF executive board for approval. Disbursement of money starts only after the approval.
The team will meet Finance Minister AHM Mustafa Kamal during the visit.
The IMF’s standard practice is to work closely with the authorities to come up with a programme that is most relevant to the borrowing country’s economic and social dynamics.
Bangladesh’s economy was still recovering from the losses of the pandemic when the Russia-Ukraine war began in February, disrupting global supply chains and eventually causing inflation in many countries including Bangladesh.
The IMF loan will help Bangladesh ease the forex crisis created here due to external effects from the Covid-19 pandemic and the Russia-Ukraine war.