Bangladesh won’t extend IMF loan term, says finance minister

Finance Minister AMA Muhith says he does not want an extension on the term of International Monetary Fund’s Extended Credit Facilities programme.

Staff Correspondentbdnews24.com
Published : 23 Sept 2014, 03:26 PM
Updated : 23 Sept 2014, 03:26 PM

Speaking to reporters after meeting an IMF delegation on Tuesday, Muhith told reporters that IMF wanted to extend the ECF project but said there would be no additional funds.

“I don’t want that. I want to bargain more. Thisis is no longer necessary anyway. We can start some other project with IMF instead of ECF,” he said.

File Photo

The five-member IMF team is touring Dhaka to evaluate progress in meeting the terms of ECF and the programme.
Under the ECF, IMF is giving Bangladesh $1 billion credit in six instalments. The fifth instalment is due to be released in November.
Under the loan’s conditions, IMF wants a new VAT law to take effect from 2015. But Muhith said he had told the delegation it would come into effect from 2016.
“When we started working on the new VAT law we saw that it needed to be implemented gradually. IMF has asked us to tell them about 2016 work plan,” the minister said.
The minister explained his position on the ECF extension.
“When we need money and they’re not going to give more, what’s the point in extending the programme? Besides, we’re not ready.
“The Pay Commission will file their report in December. It will bring big changes to various sections of the government. The VAT law and budget will also see some changes. Then we can talk to them in July,” he said.
Speaking on the Pay Commission’s report, Muhith said, “If the commission’s suggestions are easy to implement it won’t take long to do it. If we have to revise the report it will take some time.”
“No matter what, it will be effective from July 1, 2015,” he added.
The finance minister said the World Bank would give Tk 500 million aid in the next budget.
This will be finalised at the World Bank’s annual conference next month, which he will attend.