After reviewing the dollar 4.7 billion loan program for the fourth time, the International Monetary Fund (IMF) is set to release dollar 1.3 billion to Bangladesh in June. These funds have been held up by the IMF as it pushes for greater exchange rate flexibility and the adoption of a crawling peg mechanism.
The fourth review held in Dhaka in April was followed by discussions during the bank fund spring meeting in Washington DC that month. The meeting focused on critical reforms in revenue management, fiscal policy and the foreign exchange regime.
“After carefully reviewing all the issues… Both parties have agreed on the revenue management, currency exchange rate, and other reform frameworks,” said the country’s finance minister in a statement on Wednesday.
Funds from Around
The Bangladesh government has also dissolved the National Board of Revenue (NBR) and replaced it with two divisions under the finance ministry to meet a key IMF condition. One Division will look into tax policy with the aim of enhancing efficiency, transparency and accountability, according to the government.
The government also expects a budget support of dollar 2 billion from development partners like the World Bank, Asian Development Bank (ADB),, Asian Infrastructure Investment Bank, Japan, and the OPEC Fund for International Development.
Bangladesh requested the IMF for the first time in 2023 for a dollar 4.7 billion bailout as its foreign reserves were pressured by the global surge in commodity prices after Russia’s invasion of Ukraine. The South Asian nation has already received dollars 2.3 billion across the first three rounds of funding.
