The International Monetary Fund on Wednesday said it had reached a staff-level agreement to release around $1,152 million as the third tranche under the ongoing $4.7 billion loan programme with Bangladesh.
The disbursement is pending with the IMF executive board approval which is likely to take place in the current or the next month, said IMF mission chief Chris Papageorgiou at a press conference in the city after concluding the 15-day visit here.
The announcement from the IMF came after the Bangladesh Bank had introduced the crawling peg that pushed up the exchange rate of local currency Taka against the US Dollar to Tk 117 from previous Tk 110 on the day.
Besides, the BB also introduced market-based interest rate on the day to maintain another IMF recommendation to tighten the money supply to contain inflation hovering a decade-high for the past 21 months.
The government that decided to borrow from the IMF until May 2026 to tackle the financial crises has already received $1.1 million in two tranches in 2023.
Chris Papageorgiou said that significant progress on structural reforms under the IMF-supported programme has been achieved but the persistent high inflation and declining foreign exchange reserves keep pressuring the macro-economy.
The IMF has projected 5.4 per cent growth in gross domestic product and 9.4 per cent average inflation in FY24.
It hopes that inflation may decline to 7.5 per cent in FY25 and the GDP growth goes up to 6.6 per cent in the next financial year.
Answering a question on revision of forex reserve requirement for the next review based on criteria set for the deadline in June, the IMF mission chief said that the new target would be made public later on.聽聽
The central bank, which failed to fulfil the forex reserve requirement and sought revision, will once again get concession to revise down the target to around $15 billion from $20.10 billion.
During the previous review held in October also the international lender brought down the forex reserve requirement to $17.78 billion from $26.8 billion for the deadline of December following requests by the government.聽
Chris Papageorgiou has once again emphasised the importance of higher revenue generation by the National Board of Revenue against the backdrop of the country鈥檚 poor tax-to-GDP ratio, which is one of the lowest in the world.
He said that measures for generating extra revenue of 0.5 per cent of GDP s should be taken in the coming budget.
The IMF said that tackling the banking sector vulnerabilities sould remain a priority for the Bangladesh Bank to reduce non-performing loans and enhance financial sector resilience.
Answering another question, Chris Papageorgiou said that the IMF supported the ongoing BB effort on voluntary merger of sick banks.
He, however, refused to comment on any individual commercial banks.
The Washington-based lender also attached importance on strengthening institutional capacity and improvement in corporate governance to attract the foreign direct investment and mobilise the climate finance, particularly from private sources, said an IMF press release.
