Loan negotiation

THE International Monetary Fund (IMF) said last Wednesday (27) it would discuss with Bangladesh its loan request.

The IMF said Bangladesh was interested in its new Resilience and Sustainability Facility aimed at helping countries face climate-change challenges and had also requested negotiations for an “accompanying IMF programme”.

“The IMF stands ready to support Bangladesh, and the staff will engage with the authorities on program me design as per the established policies and procedures of the Fund,” an IMF spokesperson said. “The amount of support will be part of the programme design discussions.”

Earlier in the day, Bangladesh’s finance minister told reporters the government would take an IMF loan only if conditions are favourable and said the country’s macroeconomic conditions were fine. “If the IMF conditions are in favour of the country and compatible with our development policy, we’ll go for it, otherwise not,” minister AHM Mustafa Kamal said. “Seeking a loan from the IMF does not mean Bangladesh’s economy is in bad shape.”

The IMF’s resilience and sustainability trust caps funds at 150 per cent of a country’s quota or, in Bangladesh’s case, a maximum of $1billion (£818 million).

Bangladesh’s Daily Star newspaper reported on Tuesday that overall, the country wanted $4.5bn (£3.68bn) from the IMF, including for budgetary and balanceof-payment support.

After garments, remittances are the second highest source of foreign currency for Bangladesh. Its foreign exchange reserves fell to $39.67bn as of July 20 – sufficient for just over five months worth of imports – from $45.5bn a year earlier.