Dollar rate reform key to IMF loan release

Staff Reporter :

The disbursement of the fourth and fifth instalments of Bangladesh’s $4.7 billion loan package from the International Monetary Fund (IMF) now depends on the government’s willingness to allow the US dollar exchange rate to be determined by market forces, according to Bangladesh Bank Governor Ahsan H Mansur.
Speaking from Washington DC on Thursday, Governor Mansur stated that while discussions are ongoing, a final decision is pending. “There is only one issue – making the foreign exchange market-centric. The IMF is firm on this point, and we must decide whether we will implement it before or after receiving
the loan tranches,” he said.
Bangladesh has so far received $2.31 billion of the total IMF loan, with $2.39 billion still pending. The release of the remaining instalments is contingent on fulfilling key reform conditions, particularly in the foreign exchange regime.
Governor Mansur, Finance Adviser Salehuddin Ahmed, and a delegation of 10 officials are currently attending the Spring Meetings of the World Bank and IMF, which began on 21 April and will conclude on 26 April. The Bangladeshi delegation also held a separate meeting with IMF officials on 23 April.
“We have made some progress, which is now at its final stage. We are hopeful of receiving a positive response within a day or two. Technical discussions are still ongoing,” Mansur told reporters.
Golam Mortoza, Press Minister at the Bangladesh Embassy in Washington DC, shared a video of Mansur’s remarks with the media. In the video, the governor said that the foreign exchange situation is currently stable, and the dollar market is performing well. “That is why we saw a significant rise in imports during Ramadan. Moreover, Bangladesh has met the IMF’s reserve targets for September, December, and March.”
Commenting on economic growth forecasts, Mansur expressed disagreement with the IMF’s projection of 3.3 per cent GDP growth for the current fiscal year. “I believe the actual growth rate will be higher,” he said.
An IMF mission visited Bangladesh earlier this month for a two-week review of the country’s progress in meeting the conditions for the third and fourth loan tranches. Following the mission’s conclusion on 17 April, IMF officials indicated that further discussions would be required, with the potential for loan disbursement by the end of June if conditions are met.
Bangladesh joined the IMF loan programme on 30 January 2023. It received the first and second tranches in February and December of the same year, respectively. The third instalment is expected in June 2024, subject to final approval.