International Monetary Fund (IMF) mission is coming to Dhaka in early December to hold talk on releasing the fourth tranche of 4.7 billion loans it granted to Bangladesh last year.
The mission will be visiting the country at a time when it is facing multiple economic challenges such as high inflation, sluggish revenue collection, a fragile banking sector and a lack of investment.
The mission will evaluate the country's economic conditions before finalizing the releasing of the fourth tranche of the loan for 1.5 billion. The government had earlier agreed under multiple conditions for improvement in NBR revenue collection and reserved at the central bank.
The 10-member team is scheduled hold meetings with officials of the Ministry of Finance, Bangladesh Bank, National Board of Revenue, and the Planning Commission to assess the loan compliance and various other aspects of the financial sector.
This visit is the first one since the interim government assumed office on 8 August. The mission will be led by Chris Papageorgiou, chief of the Development Macroeconomics Division at the IMF's Research Department.
Earlier in October this year, Finance Adviser Dr Salehuddin Ahmed and Bangladesh Bank Governor Dr Ahsan H Mansur attended the IMF's annual general meeting in Washington where they made a request for an additional $3 billion loan to cope with the pressures of changing times. They are hopeful of getting $1 billion from this request.
Amid IMF's conditions for releasing the loans from the beginning were increased revenue collection and maintaining a specific level of reserves-both of which Bangladesh has so far failed to meet.
As per the IMF specification, the government was supposed to collect Tk394,530 crore tax revenue by June this year but it stood at Tk369,209 crore falling short of the target by Tk25,321 crore as per finance ministry estimates.
Secondly, as per the initial condition by the IMF, Bangladesh was supposed to maintain a net international reserve (NIR) of $20.11 billion by 30 June. Later, the lender revised the target, lowering it to $14.79 billion. As of 30 June, Bangladesh reported an NIR of $16.7 billion. Many structural reform and reform in the banking sector still remain in hanging.
Despite the shortcomings Bangladesh has received three tranches of the IMF loan so far and evaluation of economic condition is on the table to get the fourth tranche. It will be released based on an evaluation of the country's compliance with the IMF's conditions up to June.
