Bangladesh has repaid Tk 38 crore in interest to the International Monetary Fund (IMF) for the emergency fund it took from Rapid Financing Instrument (RFI), according to sources at Bangladesh Bank (BB).
The RFI provides prompt financial assistance to any IMF member country facing an urgent balance of payments. The RFI is one of the facilities under the General Resources Account (GRA) that provides financial support to countries, including in times of crisis.
The IMF asked Bangladesh to pay the money on August 3. Currently, Bangladesh’s liability to the global lender is Tk 23,352 crore.
“Due to taka’s devaluation against the US dollar, IMF’s liability has increased,” former finance secretary Mohammad Muslim Chowdhury told The Business Post.
BB sources said that this revaluation liability has been adjusted by debiting the central bank's Foreign Currency Transaction Adjusting Account (FCTA) on the advice of the IMF.
After adjusting this liability, the total balance of securities account against promissory notes issued by the government in favour of IMF as of April 30 will stand at Tk 23351,84,42,461.50.
A promissory note is a legally binding document that outlines the terms of the loan, including the amount owed, repayment terms, interest rate (if applicable), and maturity date. It is commonly used in various financial transactions, such as loans, mortgages and business contracts.
Concerned officials of the Finance Division told The Business Post that the government is interested in taking a loan from the World Bank ISF because the government does not have to give any collateral or security against this loan.
Only a promissory note has to be issued which is kept with the central bank. BB only has to inform the IMF through a letter or email that the government has issued their promissory note.
Bangladesh is the first country in Asia to receive a loan from the IMF's RSF. Barbados was the first country in the world to receive this IMF loan, followed by Costa Rica and Rwanda. However, Bangladesh is at the top of the list of borrowers from RSF.
In January 2023, the IMF approved a loan of $4.7 billion for Bangladesh, which is getting this credit in seven instalments. The average interest on the loan will be 2.2 per cent.
Earlier, Bangladesh took a loan in 2012, the amount of which was about $1 billion.
