IMF delegation to arrive in Dhaka on Saturday before loan disbursement

A delegation from the International Monetary Fund (IMF) is coming to Dhaka on Saturday (April 5) to ensure that Bangladesh will receive the remaining $2.39 billion of its loan.

During the visit, they will meet with the government on various conditions, including reducing subsidies, increasing electricity prices, and making the currency exchange rate market-based. However, financial advisors say that not all of the IMF's conditions can be implemented at the moment to maintain economic stability. Economists say that if the IMF installment is stuck, development partners like the World Bank and ADB may be conservative in providing loans.

The IMF started providing a $4.7 billion loan on January 30, 2023 to help Bangladesh's troubled economy due to various reasons including money laundering and defaulted loans. So far, $2.31 billion has been received in three installments. The government wants the remaining $2.39 billion of the two installments together for budget support. Which may be available in June.

An IMF team is coming to Dhaka next Saturday to see the progress of fulfilling various conditions before releasing the fourth and fifth installments together. There are several conditions including making the currency exchange rate market-based, collecting additional revenue at the rate of 0.5 percent of GDP, and increasing electricity prices to get the loan.

At least TK 57 thousand crore of additional revenue will have to be collected in accordance with the IMF conditions. Tax exemptions will have to be reduced. CPD Honorary Fellow Dr. Mustafizur Rahman said, incentives are being given in the field of taxes. These are given for various interest groups. This needs to be a rationalization plan.

The dollar price, which has been rising rapidly due to the crawling peg method of determining the exchange rate, is currently stable at 122 taka. This time, the IMF wants Bangladesh to get out of this method. With which the Financial Advisor himself does not agree.