IMF to consider approving $4.5bn in loans for Bangladesh on Jan 30: statement

A senior official from the international lender met with Sheikh Hasina, the finance minister, and the BB governor on the matter

News Desk
Published : 16 Jan 2023, 07:11 AM
Updated : 16 Jan 2023, 07:11 AM

The IMF Executive Board is expected to consider approving a $4.5 billion loan programme for Bangladesh on Jan 30, according to a senior official from the international lender.

Antoinette M Sayeh, IMF deputy managing director, revealed the information in a statement following a meeting with Prime Minister Sheikh Hasina on Monday.

She had met Finance Minister Mustafa Kamal and Bangladesh Bank Governor Abdur Rouf Talukder on Sunday.

Bangladesh and the IMF recently reached a staff-level agreement under the Extended Credit Facility, Extended Fund Facility, and the IMF’s new Resilience and Sustainability Facility (RSF), for a $4.5 billion loan programme to support the government’s efforts to recover from the economic hit of the pandemic and the Russia-Ukraine war.

“In our discussion, we focused on the key elements of this programme, including the long-standing challenges of raising tax revenues, and building a more efficient financial sector,” Sayeh said. “Reforms in these areas, combined with measures to facilitate private investments and export diversification will help create conditions to make Bangladesh’s economy more resilient and support long-term, inclusive and sustainable growth.”

“We also discussed Bangladesh’s plans to address the longer-term challenges related to climate change that could threaten macroeconomic stability. The IMF’s RSF aims 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.”

The 42-month arrangement with the IMF includes $3.2 billion under the extended credit facility and $1.3 billion under the Resilience and Sustainability Facility.

Some of the key elements of this plan are creating additional fiscal space, containing inflation and modernising the monetary policy framework, strengthening the financial sector, boosting growth potential and building climate resilience.

The IMF Executive Board’s approval is the final step in the process for the approval of the loan programme.