International Monetary Fund (IMF) has approved $4.5 billion in loans to Bangladesh. The loan will be disbursed to Bangladesh in seven instalments. Finance Minister AHM Mustafa Kamal made the announcement on Wednesday afternoon.
"We are getting the loan just the way we wanted. Total $4.5 billion will be lent to Bangladesh," he told the press during a briefing in the capital.
The amount will be disbursed in seven instalments till December 2026. The first instalment of $447.78 million will be cleared in February next year. The rest will be $659.18 million each, added the minister.
During the briefing, he also said that the finance ministry has calculated that the interest rate of the loan would be around 2.2% at the maturity period.
Speaking in this regard, Rahul Anand, who led the 10-member IMF staff mission has said "The staff-level agreement is subject to IMF management approval and executive board endorsement, which is expected in the coming weeks."
"The new ECF/EFF arrangement is aimed at restoring macroeconomic stability and preventing disruptive adjustments to protect the vulnerable while promoting structural change to support strong inclusive and green growth. Reflecting Bangladesh's large climate financing needs, the concurrent RSF, which supplements the resources made available under the ECF/EFF, will expand the fiscal space to finance climate priorities identified in the authorities' plans, including catalyzing other financings, and reducing external pressures from import-intensive climate investment," he added.
"Even as Bangladesh tackles these immediate challenges, addressing long-standing structural issues remains critical, including threats to macroeconomic stability from climate change. To successfully graduate from Least Developed Country (LDC) status and achieve middle-income status by 2031, it is important to build on past successes and address structural issues to accelerate growth, attract private investment, enhance productivity, and build climate resilience," he added.
Rahul said, "Against this backdrop, and following initial measures to maintain macroeconomic stability, the authorities have put together a program-supported by the IMF-that is expected to bolster its external position, reduce vulnerabilities, and prepare the ground for a robust and inclusive growth pick-up by scaling up much-needed social, development and climate spending."
According to an IMF press release issued in this regard, both parties reached a staff-level agreement to support Bangladesh's economic policies with a 42-month arrangement of about $3.2 billion under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) as well as of about $1.3 billion under the Resilience and Sustainability Facility (RSF).
At the request of the Government of Bangladesh, an IMF mission led by Rahul Anand visited Dhaka from October 26 to November 9, 2022, to discuss the IMF's support for Bangladesh and the authorities' comprehensive economic reform agenda.
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