IMF board meets on Jan 30 to release Bd loan package


Post View:

IMF board meets on Jan 30 to release Bd loan package

The IMF board scheduled to be held on January 30, 2023 at Washington DC Headquarter is likely to pass on around US$ 5000 million fund for Resilience and Sustainability of country’s waning economy, sources said.

The multilateral agency is typically insists Bangladesh government to do: reduce public spending, raise taxes and implement reforms designed to lower their debt-to-GDP ratios, such as cutting subsidies for fuel or food.

Bringing down the banking sector’s default loans to within 10 percent and raising the capital adequacy ratio to the BASEL 3 requirement of 12.5 percent, periodically adjusting the fuel price, implementing the climate-related proposals made in the budget and on various international conferences and increasing remittance receipts through the formal channels are also on the task list.

Increasing social spending and better targeted social safety net programmes, increased exchange rate flexibility, developing the capital and bond market, expanding and diversifying exports and modernising the monetary policy framework are the other agreed reforms.

Withdrawing the interest rate cap or cutting back on fertiliser subsidy and tax exemption were off the table, Kamal said.

The reforms will shore up the foreign currency reserves in the short-term and create the fiscal space for higher social spending and mitigating the effects of climate change in the medium- to long-term.

The immediate task at hand is to stabilise the macroeconomic situation by rebuilding the reserve buffer.

The government yesterday reached a preliminary agreement with the International Monetary Fund over a $4.5 billion loan programme, putting to bed all suspense on whether a deal would be struck with the multilateral lender at all.

The amount would be disbursed over a 42-month period, with the first instalment expected in February next year, Finance Minister AHM Mustafa Kamal told reporters after wrapping up his engagements with the visiting IMF staff mission.


For all latest news, follow The Daily Star’s Google News channel.

The first instalment would be $447.8 million, followed by six equal instalments of $659.18 million. The interest rate would be about 2.2 percent. Of the $4.5 billion, $1.3 billion can be repaid over a 20-year horizon with a grace period of ten years. 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.

This would be Bangladesh’s 13th loan from the Washington-based multilateral lender, with the last package taken in 2012.



Please enter your comment!
Please enter your name here

Share post:




More like this

Social Islami Bank distributes agricultural finance to maize cultivators at Khansama, Dinajpur

BM Desk: Social Islami Bank distributed agricultural finance at 4%...

Bashundhara MD honours TRUB Smart Performance Award 2024

BM Desk: Sayem Sobhan Anveer, Managing Director (MD) of Bashundhara...

Islami Bank holds discussion on International Mother Language Day

BM Desk: Islami Bank Bangladesh PLC organized a discussion and...

BKB commemorates Language Martyrs on International Mother Language Day

BM Desk Bangladesh Krishi Bank (BKB) led by its Chairman...