IMF team due in Dhaka to discuss financial sector reform

In this file photo taken on 15 April 2020 a sign is seen outside the headquarters of the International Monetary Fund (IMF) in Washington, DC.AFP File Photo

A team of the International Monetary Fund (IMF) is expected to arrive in the capital this week to set the ball rolling on financial sector reform, as part of the $ 4.5 billion loan program agreed with the Bangladesh government, reports UNB.

The IMF team will hold discussions with Bangladesh Bank, key personnel in the Finance Division, as well as officials at the Ministry of Forest, Environment and Climate Change – around $1.3 billion of the loan amount will be disbursed under the Resilience and Sustainability Facility (RSF).

The RSF is expected to provide affordable, long-term financing to support Bangladesh’s climate investment needs, catalyse climate financing, and reduce balance of payment pressures from import-intensive climate investment.

During their stay here, the delegation would want to know updated information on different economic indicators with a view to releasing the next installment of the loan for Bangladesh, sources at Bangladesh Bank told the news agency.

The central bank is implementing different policy reforms including on reserves, foreign exchange rate, monetary policy, loan recovery, interest rate, and GDP and inflation issues.

Among the proposed reforms is to let the currency float against the US dollar – it remains to be seen just how far the central bank will ultimately go on this. The proposals also include allowing the private sector to import fuel, and increasing electricity prices at the retail level.

Besides, a long-term plan will be made to make the prices of imported goods, including energy products, use-based and to increase the tax-GDP ratio. A decision has already been taken from the highest level of the government regarding the implementation of these measures, the official said.