Bangladesh’s foreign reserves could soar to $24.3 billion by the fiscal year-end, suggests the IMF. As of December 6, reserves stand at $19.1 billion, based on Bangladesh Bank’s latest data.
A balanced monetary policy and enhanced exchange rate flexibility to ease foreign exchange pressures. If implemented sincerely, reserves might surge to $30.6 billion next fiscal year and $39.2 billion by 2025-26.
However, the government’s failure to meet two of the IMF’s six conditions didn’t hinder the approval of the second tranche of the $4.7 billion loan.
The IMF urges tax reforms to boost the tax-GDP ratio, which is projected to rise 8.4% in the next fiscal year from the previous 7.4%. They also emphasize financial sector reforms, aiming for 6 percent growth this year and 6.6 percent the next fiscal year.
Despite the revised growth projection of 6.5% for this fiscal year, reforms are vital, according to economists. Zahid Hussain of the World Bank’s former Dhaka office anticipates potential boosts in reserves post-election, potentially adding $5 billion.
The IMF projects $12 billion of unrepatriated export proceeds and an additional $1.5 billion from multilateral partners. However, Hussain warns of challenges without substantial policy reforms.
