IMF loan: Bangladesh receives $681 million in second instalment
Bangladesh has received US $681 million as loan from the International Monetary Fund (IMF) in the second instalment as the global lender authorised the release of the money for the country after concluding it was making progress on programmes aimed at preserving macroeconomic stability.
Finance Minister AHM Mustafa Kamal confirmed this to Prothom Alo.
The IMF’s executive body held a meeting in Washington on Tuesday and decided to release the money for Bangladesh.
Speaking to Prothom Alo on Tuesday night, the finance minister said immediately after the IMF’s decision on Tuesday, $681 million was deposited to Bangladesh’s account.
Bangladesh sought loan from the IMF in July, 2022. After assessing the situation for six months, the organisation decided to lend $4.7 billion to the country. It said that the money will be released in seven instalments over a period of seven and a half years until 2026.
Bangladesh received $476.3 million as the first instalment of the loan on 2 February this year.
The letter sent to the IMF seeking the loan said this is a critical time. That’s why Bangladesh needs money for maintaining the balance in dealings and as budget assistance.
Bangladesh will receive the IMF’s loan under three categories - the Extended Credit Facility (ECF), Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF). But the global lender organisation will monitor implementation of 38 conditions to release the loan in different instalments.
The conditions to get the loan are - withdrawing interest rate caps for bank loans, let the market fix the dollar exchange rate, maintaining the forex reserves at a certain level, adjusting the fuel prices with the international market, increasing the tax-GDP ratio and decreasing collecting loans through selling savings bonds and so on.
On 4 October, an IMF mission led by its senior economist in the Asia Pacific Department Rahul Anand arrived in Dhaka to monitor the progress in implementing the conditions. They held meetings with different ministries, divisions and organisations here for over two weeks.
The IMF mission found that neither Bangladesh could retain the stipulated $24.46 billion as forex reserves at the end of June, nor could it achieve the targeted tax-GDP ratio. The forex reserves at that time was $20.47 billion.
The Bangladesh side told the IMF mission that the country would fulfil the reserve requirement and tax-GDP ratio after the forthcoming 12th parliamentary elections.
While leaving the country, the IMF mission on 19 October said in a statement that they have agreed to the Bangladesh government on various issues.
Since then the government had been expecting to get the loan instalment.
Speaking to Prothom Alo, Policy Research Institute’s (PRI) executive director Ahsan H Mansur, also a former official at IMF, said following the release of the second instalment of the loan, another IMF mission will arrive in the country in March to monitor what the Bangladesh government has been doing to fulfil the required conditions set for December. At that time they will discuss the third instalment.