Bangladesh finance minister sees no need for IMF loans now

Finance Minister AHM Mustafa Kamal has said the government does not need loans from the International Monetary Fund at the moment amid reports that Bangladesh is seeking budgetary assistance from the global lender.

Kamal refuted claims that the government sent a borrowing proposal to the IMF.

“We’ll take a loan if it is necessary. But we don’t need it now,” Kamal told reporters in Dhaka on Wednesday.

An IMF consultative team has recently visited Bangladesh and held meetings with different ministries and government offices. That triggered speculations over a possible $4.5 billion loan from the IMF.

The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, US, Sept 4, 2018. REUTERS/Yuri Gripas/File

“They advise the government and the government also advises them. Their advice is useful to the government,” Kamal said. “They usually suggest reforms. These are good for the country. We accept their proposals.”

Kamal said even if the government takes loans from the IMF, it will prioritise Bangladesh’s interests.

“Many fear that we might make some sort of commitment or get into some deal which will not benefit the country. If any proposal arrives, you will definitely know about them. And we will never take up any project or funding which will not be in the country’s interest.”

The IMF’s account of Bangladesh's foreign currency reserves differs from that of the government. “Our account is similar to other countries,” Kamal said.

He said Bangladesh has the capacity to repay IMF loans if the country borrows money from the organisation. “Haven’t we repaid their assistance? The IMF won’t be able to say that we delayed payments by even a day.”

“They will have no worries if they give us loans. We’ve repeatedly assured them that they’ll never have to think about waiving our loans.”

RESERVES AND INFLATION

Kamal brushed aside concerns over dwindling foreign currency reserves and rising inflation, saying the situation is better than how it was when the Awami League came to power over a decade ago.

He said people do not need to worry about 7.56 percent inflation in June, the highest in nine years, because the 12-month average inflation is 5.9 percent. “Inflation was 12.3 percent when the Awami League took charge.”

Kamal deflated concerns over the country’s shrinking foreign currency reserves due to high import costs amid global volatility triggered by the Russia-Ukraine war.

“Our reserves were $7 billion when we [Awami League took charge]. Now we have $40 billion even in this situation after reaching $48 billion.”