A delegation of the International Monetary Fund (IMF) is scheduled to arrive in Dhaka on Wednesday to discuss the terms of the USD $4.5 billion loan sought by Bangladesh.
The delegation will take part in discussions on different issues including reforms in financial sectors and policies from October 26 to November 9. The team will be led by Rahul Anand, IMF mission chief to Bangladesh.
The objective of the delegation is to make progress towards a staff-level agreement on funding a long-term credit line specifically aimed at helping build resilience against climate risks, officials say.
Bangladesh sought a $4.5 billion loan from the IMF and $1.0 billion from Asian Development Bank (ADB), but there is concern over whether the amount is enough to tackle the situation. Experts and economists say the IMF loan will build the country’s image to overcome the crisis of foreign exchange management.
They say to get a loan from the IMF, conditions must be met.
A decade ago, Bangladesh received an extended credit facility (ECF) of nearly $1 billion from the IMF in seven installments. One of the conditions, on the contrary, was to enact a VAT law.
Economist Dr. Ahsan H Mansur said that all developing countries were facing two problems – firstly, large deficits in the balance of payments and secondly, inflation is rising due to the inability to keep exchange rates under control.
“Bangladesh is no exception,” he told UNB.
“I think this is where the IMF can play a role. The IMF’s program is not related to money, but monetary policy reform. Those reforms will be the real thing, which will normalise the financial situation,” he added.
Bangladesh Bank (BB) governor Abur Rouf Talukder earlier gave some ideas to reporters about the conditions of IMF. These are to modernise the revenue administration, accelerate the revenue collection process, increase the amount of tax collection in ratio GDP, bring good governance in the banking sector and reduce bad debt.
The IMF can also stipulate conditions for reducing subsidies and incentives.
Source: United News of Bangladesh