Lending decision on Bangladesh in October: IMF

Bangladesh has to wait until next October for the International Monetary Fund (IMF) to make a final call on the country’s request to borrow funds from the Washington-based lending agency, according to a regional official of the organisation.

Rahul Anand, head of IMF’s Asia-Pacific Division, said now there is no dire situation in Bangladesh. In terms of foreign debt, the country has a different picture compared to other countries in the region, especially Sri Lanka.

Anand said this to some members of Bangladeshi media in a virtual briefing on Tuesday. IMF Policy and Review Department Deputy Director Uma Ramakrishnan was also connected at the time.

He also denied any connection of IMF loan conditions with the recent fuel price hike move of Bangladesh government.

He said that Bangladesh’s foreign debt is relatively small at around 14 per cent of gross domestic products (GDP). That is why the risk of the country going into default is low. Even, there is no reason to compare Bangladesh with Sri Lanka.

The official said that the IMF is ready to help Bangladesh, according to the rules and procedures regarding the funds. The IMF officials are discussing the program design with the Bangladesh authorities.

“The IMF will hold its annual meeting in mid-October. There will be a final decision on Bangladesh’s lending issue,” Rahul added.

“The IMF stands ready to support Bangladesh, and the staff will engage with the authorities on program design as per the established policies and procedures of the Fund,” an IMF spokesperson said following the request by Bangladesh government.

As the country recently faced several rounds of currency devaluation in the wake of dwindling reserves, Rahul said the devaluation of taka is not comparable to what we have seen” in other countries.

Even though Bangladesh’s reserves have come down, he said the stocks are still high enough to cover four to five months of prospective imports.