Bangladesh may receive $1.15 billion in the third instalment of the International Monetary Fund’s (IMF) loan in the last week of June, which will give a much-needed relief to the country’s dwindling foreign exchange reserves.
The proposal for the third tranche will be placed at the executive board meeting of the Washington-based lender for approval on June 24 or June 25, said an official of the Bangladesh Bank.
On Sunday, Finance Minister Abul Hassan Mahmood Ali told reporters that Bangladesh would get the instalment by June.
He made the comments after a meeting with IMF Executive Director Krishnamurthy Venkata Subramanian at his secretariat office.
In January last year, the IMF approved the $4.7 billion loan. Bangladesh has received more than $1 billion in two instalments.
In order to facilitate the release of the third tranche, an IMF team led by Chris Papageorgiou completed the programme’s second review last month. It reached a staff-level agreement with the government on the policies needed to complete the second review.
The IMF will disburse the third instalment as per the fulfilment of the conditions set for December 2023. Except the forex reserve target, Bangladesh has met all conditions.
In December, the central bank was supposed to maintain net international reserves of $17.78 billion. It fell short by more than a billion dollars. This prompted the IMF mission to lower the target.
The government has brought in some critical reforms to address macroeconomic imbalances, including the realignment of the exchange rate, the adoption of a crawling peg regime, and the full liberalisation of retail interest rates.
In 2022, Bangladesh turned to the global lender after its forex reserves plunged to a critically low level amid higher import bills, leading to a sharp depreciation of the taka and an unprecedented level of inflation, hurting the poor and derailing the economic growth trajectory.
The reserves have fallen to $18.4 billion recently from $41 billion accumulated in August 2021, according to the IMF’s balance of payments and investment position manual.
Source: thedailystar
