IMF reviewing reserves, macroeconomic condition ahead of next fund release

A delegation of the International Monetary Fund (IMF) is reviewing Bangladesh’s economic update including foreign exchange reserves before releasing the second installment of $4.70 billion loan.

One of the conditions of the IMF loan was that there should be real (net) foreign exchange reserves of $24.46 billion as of last June.

According to the conditions, Bangladesh Bank (BB) could not keep that amount of foreign exchange reserves.

The visiting IMF delegation held a meeting with the Bangladesh Bank on Wednesday (October 4).

The central bank’s progress, success, and failure in fulfilling various conditions came up in the discussion. The failure to meet the conditions of the reserve was also informed in the meeting.

The IMF will hold several meetings with different ministries, institutions, and business groups. Financial sector stability, banking sector reforms, liquidity management, dollar market rate transactions, revenue management modernisation, expendable reserve calculation method, interest rate, and monetary policy implementation would be discussed.

The BB in the meeting informed the IMF that most of the conditions related to the central bank have been fulfilled.

Central bank’s Executive Director and spokesperson Mezbaul Haque told reporters on Wednesday, “The IMF gave us some conditions while approving the loan, some of these have been fulfilled."

There are two failures--reserves slide a little and the revenue collection is low. But many other areas have been implemented successfully, he said.

The central bank revealed the financial stability report of the banks as per conditions. Reserves are being calculated as per BPM-6. A market-fixed exchange rate of the currency was also introduced. New rules of interest have been introduced.

“I have mentioned the conditions given by the IMF which have been achieved and those which have not been achieved. It has also been informed why it did not happen,” said Mezbaul.