IMF likely to approve $4.5b loan to Bangladesh on 30 Jan

The $4.5 billion loan proposal of Bangladesh is expected to be approved at a meeting of the International Monetary Fund's (IMF) executive board scheduled for the last week of January.

"The IMF executive board is expected to consider approving the loan programme with Bangladesh on 30 January," said IMF Deputy Managing Director (DMD) Antoinette Monsio Sayeh in a press statement on Monday following a meeting with Prime Minister Sheikh Hasina.

"Bangladesh does not want any assistance from the IMF for bail-out, rather the country has sought the support as a preemptive measure," quoting the PM, her speech writer Md Nazrul Islam told reporters after the meeting with the IMF official at Ganabhaban.

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), to support the authorities' home-grown reform agenda. 

Bangladesh does not want any assistance from the IMF for bail-out, rather it has sought the support as a pre-emptive measure: PM

Sayeh said that the macroeconomic policies taken by the Bangladeshi authorities in recent years have helped keep inflation stable, debt-to-GDP ratio low, and external buffers adequate.

During the meeting with the PM, Antoinette Monsio Sayeh said the IMF cherishes the long-standing partnership with Bangladesh, and she came to Dhaka to further strengthen the relationship.

She said the IMF will continue to support Bangladesh to accomplish its aspiration to become a developed, prosperous and higher-income country by 2041.

In the press statement, Sayeh congratulated the PM, Finance Minister Mustafa Kamal and Bangladesh Bank Governor Abdur Rouf Talukder on Bangladesh's impressive economic growth and social development in recent decades, which have allowed steady progress in poverty reduction and significant improvements in living standards.

The IMF will continue support for Bangladesh to become a developed, prosperous and higher-income country by 2041: IMF DMD

She said, "Just like countries around the world, Bangladesh is now dealing with the impact of global shocks – first from the pandemic and then from the ongoing war in Ukraine." 

"We discussed the impact of these shocks on Bangladesh's economy, and I welcomed Bangladesh's comprehensive set of measures to deal with them – including their focus on ensuring protection for the vulnerable during these difficult times," the IMF DMD noted.

She said, "In our discussion [with the Bangladesh side], 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. 

"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."

Stating that discussions were made about Bangladesh's plans to address the longer-term challenges related to climate change that could threaten macroeconomic stability, Antoinette Monsio Sayeh explained, "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".