Finance
Bangladesh Bangladesh is getting $4.5 million assistance from the IMF
Dhaka, 16 October 2022 : Bangladesh received the assurance of financial assistance of 4.5 billion dollars from the IMF.
This money will be released in three installments after the final negotiation with the organization in Bangladesh. Central Bank Governor Abdur Rauf Talukdar said that apart from this, 1 billion dollar budget support will be available from the World Bank in two separate projects. However, the IMF has given various conditions to Bangladesh to get four and a half billion US dollars in aid.
The governor said these things in a press conference at the organization's Bangladesh office in Washington DC on Sunday (October 16). He said that the pressure of inflation, the decrease in the value of rupees against the dollar and various crises, this year, Bangladesh's reserves have been strained. A few months ago, the government asked the International Monetary Fund for a four-and-a-half billion or $4.5 billion loan to deal with the crisis. In this context, the annual meeting of the IMF has assured the budget support.
Abdur Rauf Talukder said that the dollar crisis will be solved if IMF-World Bank loans are available soon. The Governor expects Bangladesh to be somewhat relieved by the end of next year if remittances and exports are fine.
He also said that the IMF has requested Bangladesh government to speed up its revenue collection activities. The country has a very low tax to gross domestic product (GDP) ratio. This ratio has long been stuck at 7.6 percent, the lowest in South Asia and one of the lowest in the world.
To raise revenue, the IMF has recommended setting targets such as simplification of VAT infrastructure, modernization of revenue administration and management to reduce the risk of non-collection of tax from large taxpayers, he said.
The IMF also noted that high levels of non-performing loans in the banking sector are a major problem for Bangladesh. This problem is very evident in state-owned banks. The IMF has recommended several initiatives to restore order in the sector.
Out of the $4.5 billion loan, Bangladesh has asked for $1.5 billion to $3 billion for balance of payments and budget support. The remaining 1.5 billion is sought from the IMF's new initiative, the Resilience and Sustainable Development Fund (Trust).
