Bangladesh expected to receive IMF loan’s 2nd instalment in Nov

Staff Reporter :

The government is expecting to receive the second installment of the $4.7 billion loan from the IMF by November this year despite failed to meet two of the six quantitative targets set by IMF for the first half of 2023.
The government has failed to maintain minimum net international reserves (NIR) of $24.46 billion at the end of June of the just-ended financial year.
Besides, the minimum tax revenue target also missed by a margin. The government needed to collect at least Tk 345,630 crore in tax revenue in fiscal 2022-23.The target missed by about Tk 20,000 crore as collections slowed down due to the import curbs put in place to preserve the strained dollar stockpile.
However, a official of the finance ministry said the government is expecting that second installment of the loan will be released timely as the officials of the International Monetary Fund (IMF) visited Dhaka several times and found satisfactory achievement in different sectors.
It is informed that the finance ministry has already written to the Washington-based multilateral lender explaining why the country missed the two conditions in the last month.
Economists are still concern about the timely disbursement of the second installment of the IMF loan as the forex reserves of Bangladesh Bank have fallen below the benchmark set by the IMF.
In practice, if a country missed a quantitative performance criteria (QPC) condition, the IMF executive board may approve a waiver if it is satisfied that the programmed will still succeed. This may be because the deviation was minor or temporary or because national authorities
are taking corrective actions. Recently, a Bangladesh delegation held several meetings with the IMF delegation. At the meeting, the IMF delegation assured that the second tranche of the loan would be released on time.
Meanwhile, IMF approved about USD 3.3 billion under the Extended Credit Facility ECF) and the Extended Fund Facility (EFF), and about USD 1.4 billion under the Resilience and Sustainability Facility for Bangladesh in the last year.
Bangladesh Bank received the first installment of USD 476 million from the IMF on February 2.
The total amount of the IMF loan will be released to Bangladesh in seven installments for a 42-month arrangement till 2026.