Economy
IMF’s 3rd instalment of loan confirmed
The International Monetary Fund has finally given Bangladesh the green signal for $681 million as the third instalment of the lender’s $4.7 billion loan package.
The visiting delegation of the lender has confirmed that the instalment will be released in June, several top finance ministry officials told the news reporter following a meeting with the IMF team yesterday.
They said various aspects of an agreement for securing the third instalment were finalised in a series of meetings with the IMF and different wings of the finance ministry yesterday.
The lender is likely to reduce the requirement for June’s net foreign exchange reserve from $20.10 billion to $17-$18 billion, they added.
The IMF had a condition for Bangladesh to have reserves of $19.26 billion by March-end and $20.10 billion by June’s end for the third instalment.
An official from the finance division told the news reporter that despite current reserves now around $15 billion, receiving the third instalment is assured even if this condition is not met.
Bangladesh and the IMF do not have much disagreement on most issues, said the official, adding that the government is working to implement the conditions imposed by the IMF including reducing subsidies, increasing revenue and reserves.
He said a new reserves requirement will be finalised in a meeting with the central bank on Tuesday. The IMF will also determine the net reserve target for October and December for the fourth instalment.
Bangladesh also failed to meet the net reserve requirement and revenue target before receiving the second instalment. Back then, the IMF signed the MoU by reducing the targets for next March and June.
Another official said the government also has doubts about achieving the lender’s condition for revenue target for June.
“Therefore, the finance ministry has also sought concessions from the IMF’s targets for June revenue collection. In the new MoU, the IMF is also likely to make concessions in this regard,” said the official.
The government has collected Tk1,62,164 crore against the revised target of Tk1,43,640 crore till last December, according to the finance ministry. However, revenue of Tk3,94,530 crore has to be collected at the end of the financial year.
Assessing revenue collection growth over the current fiscal year’s nine months, the revenue board predicts falling short of the target by at least Tk10,000 crore by June’s end.
Govt actively following IMF’s directives
Ahsan H Mansur, executive director of the Policy Research Institute, told the news reporter that the IMF’s current focus includes transitioning to a market-based exchange rate, leaving interest rates to the market, enhancing revenue collection, and reducing government subsidies.
He said the government is actively aligning policies with the IMF’s directives.
“The IMF may reduce the June net reserve requirement from $20.10 billion to $17-$18 billion. But it will be difficult to achieve before June,” said the economist.
Ramifications of not meeting conditions
Mahbub Ahmed, former senior secretary of the Finance Division, told the new reporter that the government is working to meet IMF conditions to secure the third loan instalment.
He said, “Despite not meeting conditions on foreign exchange reserves or revenue, we remain optimistic about receiving the third tranche.”
He said failing to meet the conditions satisfactorily may hinder receiving the two instalments scheduled for the next fiscal year.
“As the government has until the next fiscal year to fulfil the conditions, the IMF may get strict for the next instalments,” said the former secretary.
He further mentioned that Bangladesh has never received the last instalment of the IMF loan except once due to not being able to fulfil the conditions.
“In 2016, when I was finance secretary, I received the last instalment of the IMF’s $1 billion loan. Before this, Bangladesh could never take the final instalment of the loan,” he added.
Meeting with BB today
The IMF officials will meet with central bank officials on Tuesday morning to adjust banking sector conditions for securing the third and fourth loan instalments.
Later in the day, they will finalise the MoU with State Minister for Finance Waseqa Ayesha Khan and Finance Division Secretary Khairuzzaman Mozumder, attaching the revised terms for releasing the instalments.
The delegation, led by Chris Papageorgiou, head of IMF’s Development Macroeconomics Division, will leave Dhaka after a press briefing on 8 May. The team arrived on 24 April to review the loan programme.
In January last year, Bangladesh signed a $4.7 billion loan agreement with the IMF due to dwindling foreign exchange reserves. The loan is being distributed in seven instalments by 2026. The lender cleared $447.8 million of the first instalment in February last year, and $681 million of the second instalment in December
Expatriate Bangladeshis sent approximately US$ 2.11 billion in remittances during the first 28 days of September in the fiscal year 2024-25, according to data released by Bangladesh Bank on 29 September.
Of this total, state-owned and specialised banks handled $679.10 million, while private banks received $1.43 billion in remittances.
Chief Adviser to Bangladesh’s interim government, Professor Muhammad Yunus, has vowed to expedite reforms and hold elections swiftly. Yunus, who recently assumed the role after the collapse of Prime Minister Sheikh Hasina’s 15-year administration, expressed his commitment during an interview with Tokyo-based news outlet NHK WORLD in New York on Sunday. He was attending the United Nations General Assembly at the time.
Following mass student-led protests that ended Hasina’s long-standing rule in August, Yunus stepped in as the leader of the caretaker government. Known for founding Grameen Bank, an institution providing microloans to the underprivileged, Yunus, along with the bank, earned the Nobel Peace Prize in 2006 for his efforts in poverty alleviation.
During the interview, Yunus emphasized that the interim government’s primary mission is to implement reforms promptly and ensure elections are held as soon as the groundwork is complete. He underscored the importance of success, stating, “Failure is not something that we can accept.”
Addressing the pivotal role of students in the ousting of the Hasina administration, Yunus acknowledged the sacrifices made by young people, referring to their involvement as part of a “revolution.” He highlighted his intention to engage the younger generation in shaping policy.
Furthermore, Yunus called for continued support from Japan, Bangladesh’s largest donor, during this crucial transition period. He stressed that Japan’s assistance is vital to stabilizing Bangladesh’s economy and fostering a democratic foundation in the nation.
Syeda Rizwana Hasan, the Adviser for Environment, Forests, and Climate Change, announced today that steps will be taken to restrict the use of polythene shopping bags to safeguard future generations.
Starting from October 1, polythene bags will be banned in shopping malls, followed by a ban in kitchen markets from November 1.
“Everyone must take responsibility and stop using polythene voluntarily. Action against polythene producers will begin from November 1,” Rizwana Hasan stated during a seminar.
The Department of Environment (DoE) organized the seminar to raise public awareness about alternatives to banned polythene bags.
Rizwana Hasan highlighted that the restriction on polythene will be executed in phases according to legal provisions, and discussions with shopping centers and store owners are ongoing to ensure a smooth transition.
She also announced plans to make the government secretariat a plastic-free zone by December.
Other speakers at the seminar included Environment Secretary Dr. Farhina Ahmed, DoE Director General Dr. Abdul Hamid, Director Rajinara Begum, President of the Shop Owners Association Muhammad Helal Uddin, and Md. Arifur Rahman Bhuiyan, Assistant Professor of Environmental Science at BUP. They discussed the harmful effects of polythene and the need for alternative products.
Earlier, Rizwana Hasan inaugurated a fair showcasing eco-friendly alternatives to polythene bags and visited 24 stalls. The fair featured products from government and private entrepreneurs, including reusable bags, jute bags, paper bags, and items made from bamboo and cane.
