Finance Adviser Dr. Salehuddin Ahmed on Tuesday said the government expects commitments of around $6 billion from development partners, including the World Bank and IMF, by next June.
“Following our discussions with the development partners in Washington, we’re expecting around $6 billion from the development partners by next June,” he stated.
Dr. Salehuddin made this comment after an IMF Mission, led by IMF Country Representative Jayendu De, met him at his office at the Bangladesh Secretariat.
The third review mission of the IMF arrived in the capital today to assess progress in meeting the conditions for releasing the fourth tranche of the $4.7 billion loan agreement.
In Washington, the Finance Adviser said discussions were held with the World Bank, IMF, the OPEC Fund, and the government expects some commitments by next June.
“We’re also expecting funding from ADB and OPEC Fund in the near future. The commitments will come, but the aid flow will not arrive all in one year,” he added.
The Adviser noted that the IMF Mission is likely to return in March next year for further discussions on their next course of action.
Regarding the ongoing $4.7 billion loan package, he said $1.11 billion is expected to be released this time.
The IMF Mission’s visit will focus primarily on the revenue sector, fiscal deficit, growth, and inflation, according to Dr. Salehuddin.
“They will also evaluate the strategies we’ve undertaken so far and those planned for the coming days. The IMF Mission will hold discussions with the Bangladesh Bank on banking reforms, default loans, depositor stress, and other issues,” he said.
Dr. Salehuddin emphasized that economic stability has improved, although not entirely.
“Now is the time to attract investments and encourage foreign donors to contribute,” he said.
He noted that the foreign exchange rate is relatively stable. Although some banks required liquidity support, Islami Bank, the largest private sector bank, is recovering, and other banks are expected to gradually stabilize.
Dr. Salehuddin pointed out that inward remittance and export growth remain strong, while imports are lower, particularly in capital machinery, due to restrictions.
“We are considering possible actions to address this situation,” he added.
The IMF Mission will stay in Bangladesh for several days, according to the Adviser.
“We assured them that all measures we take will benefit the country in the long term,” he said, adding that the government avoids taking decisions that could create challenges for future administrations.
“All measures are thoroughly scrutinized and well-considered. The IMF Mission is also convinced,” he stated.
Dr. Salehuddin, a former central bank governor, expressed optimism that the IMF would set realistic targets beneficial for the country’s economic development.
When asked, he said additional funding would be considered after discussions on the current loan package.
“We are discussing the ongoing loan package now and will consider seeking extra funds later,” he said.
The Adviser added that the government’s reform initiatives, such as banking and revenue sector reforms, require foreign funding, as well as measures to address the trade deficit and current account balance.
“We have already approached the World Bank in this regard,” he said.
The IMF review mission will leave on December 17.
Bangladesh has received three installments under the IMF loan agreement so far, with the fourth installment expected to be released in December.
On June 24 this year, the IMF approved the release of $1.11 billion as the third tranche of Bangladesh’s $4.7 billion loan.
