The World Bank and the Asian Development Bank (ADB) have respectively proposed $750 million and $1.5 billion loans to the Bangladesh Bank for policy implementation. However the US treasury did not mention any loan amount.
The three organisations’ representatives met with the central bank governor Dr Ahsan H Mansur on Sunday and assured to lend such amount to help the Bangladesh amid the new national political shift.
BB spokesperson and executive director Husne Ara Shikha confirmed the matter to the media.
She said that, World Bank proposes $750 million Policy Based Loan (PBL) for which BB needs to do some policy implementation with another $250 million investment loans are under process. ADB proposes $1.5 billion PBL in three phases ($500 million will be disbursed within 2025).”
Policy-based loans or PBLs offer borrowing member countries flexible and liquid (fungible) funding to support policy reforms and/or institutional changes in specific sectors or subsectors, as noted by the mentioned organisations.
The BB spokesperson stated that the US delegation, led by Brent Neiman, under secretary of the US Treasury, held detailed discussions on improving Bangladesh's macroeconomic conditions. Donald Lu, US assistant secretary for South and Central Asia, was also part of the delegation visiting Bangladesh.
The US representatives assured the interim government of their support in restoring and stabilising the country's economic trajectory.
On August 5, Sheikh Hasina's regime fell in the face of public protests lead by the student-led mass uprising. Since then, weaknesses of the Bangladesh’s economy began to surface in the face of proper administration.
The massive money laundering schemes of the Hasina regime and its irregularities in managing the country’s foreign exchange reserves have led to an alarmingly low reserve level. This decline has driven up the exchange rate, further fuelling inflation.
On his first day in office, the newly appointed BB governor, under the interim government, has begun efforts to curb inflation. According to insiders, policy reforms, including loans from the World Bank and ADB, are expected to boost foreign exchange reserves, which will have a positive impact on the economy.
