Loan from IMF only if it becomes necessary

Bangladesh will take financial assistance from the International Monetary Fund (IMF) only if becomes necessary, Finance Minister AHM Mustafa Kamal has said.

“IMF is already helping us. We are working [in many sectors] with its help. We will seek financial aid only if it becomes necessary,” he told reporters when asked whether the country was seeking a $4.5 billion bailout package.

“Everyone will learn about it if such necessity occurs. We’ll take the required steps at the time,” he said after a meeting with the visiting IMF team on Thursday.

On Wednesday, the minister dismissed media reports on Bangladesh seeking massive aid from the global lender for economic recovery, saying, “We don’t need any loan from the IMF right now. We also didn’t place any proposal to IMF for loan and IMF didn’t make any such offer to us.”

He, however, added that if any loan is taken from the IMF, Bangladesh will never accept any condition that will go against the country’s interest.

Responding to a question, Kamal on Thursday said the government was not considering scrapping any projects. “All projects will be implemented based on necessity.”

In line with Prime Minister Sheikh Hasina’s directives, all the authorities concerned have been told to take austerity measures in implementing the projects that have already gotten the green light, he said.

They have been asked to spend money only on the projects that are very important and needed to be implemented now and defer the rest as much as possible, he added. “We’ve classified them into three categories — A, B and C.”

The IMF team, led by Rahul Anand, division chief in the IMF’s Asia and Pacific Department, arrived in Dhaka on July 14 — at a time when Bangladesh is recovering from the shock of the Covid-19 pandemic and suffering from the impacts of the Russia-Ukraine war.

Since then, the delegation has held separate meetings with the senior officials of different ministries, including finance and commerce, and divisions, including the National Board of Revenue, Bangladesh Bank (BB) and the Economic Relations Division.

On Thursday, the last day of the trip, they held wrap-up meetings with the finance minister and Finance Division Senior Secretary Fatima Yasmin.

According to meeting sources, the IMF team said Bangladesh was still in a good position amid the ongoing global economic turmoil. But the country will have to take cautious steps to tackle the crisis in future.

Last month, BB Governor Abdur Rouf Talukder held a virtual discussion with IMF’s Resident Representative for Bangladesh Jayendu De, reportedly seeking the proposed $4.5 billion bailout scheme in the form of budgetary support.

Top Finance Division officials said they expect the deal, which has reportedly come to prop up the dwindling foreign currency reserves, to be finalised by September. But the finance minister brushed off the matter on Wednesday.

During the visit, IMF officials looked into the impacts of the Russia-Ukraine war and escalating global commodity prices on the Bangladesh economy, the status of recovery from the pandemic and the government’s large subsidy programmes.

Finance Ministry officials earlier said that the Washington-based global lender could tie in conditions for the bailout package. The conditions could include measures to increase revenue, lower subsidy expenditure, market-based exchange rate and lending rate, and reforms in the banking sector and tax administration.