Bangladesh is on track to receive the third installment of the International Monetary Fund’s $4.7 billion loan, as Finance Minister Abul Hassan Mahmood Ali confirmed yesterday.
The announcement followed a meeting with IMF Resident Representative Jayendu De. The IMF is scheduled to assess the country’s progress under the loan program during an upcoming visit.
This comes after the IMF released two previous tranches of $447.8 million and $681 million in February and December, respectively, last year.
Despite some shortcomings, Bangladesh has largely met the IMF’s conditions, particularly in tax revenue collection.
However, it fell short of the minimum net international reserves target by $58 million at the end of 2023.
Nevertheless, the government remains optimistic, with the finance minister stating that most targets have been achieved, indicating a positive outlook for passing the upcoming evaluation.
Apart from financial targets, Bangladesh has also fulfilled conditions related to external payments, social spending, and capital investment. However, it has yet to meet certain structural requirements, such as releasing quarterly GDP data.
Regarding monetary policy, Bangladesh intends to maintain its current exchange rate system, rejecting plans for a market-based approach. Instead, it will continue with the crawling peg system, as announced by the Bangladesh Bank earlier.
Bangladesh’s diplomatic relations remain strong, as evidenced by a recent meeting between the finance minister and the Canadian High Commissioner. Discussions included potential Canadian investments in Bangladesh, particularly in canola oil manufacturing mills.