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International Monetary Fund (IMF) Deputy Managing Director Antoinette Monsio Sayeh is scheduled to arrive in Bangladesh today ahead of the signing of a $4.5 billion loan agreement between the two parties.
She will stay in Dhaka for five days from January 14 to 18, said IMF and finance ministry sources.
During the visit, the top IMF official is scheduled to meet with Prime Minister Sheikh Hasina, Jatiya Sangsad Speaker Shirin Sharmin Chaudhury, Finance Minister AHM Mustafa Kamal, Bangladesh Bank Governor Abdur Rouf Talukder, Finance Secretary Fatima Yasmin, and Economic Relations Division Secretary Sharifa Khan, according to the finance ministry sources.
Her meeting with Prime Minister Sheikh Hasina is scheduled to be held on January 16.
On January 18, Antoinette Sayeh will visit the Padma Bridge where she will be briefed about the construction technique of the bridge and its importance in the national economy.
Sources said the $4.5 billion loan agreement will be signed within a few weeks after getting the approval of the IMF executive board.
The IMF executive board’s meeting is likely to be held on January 29 or 30 after Antoinette leaves Dhaka. She is likely to place the loan proposal at the board meeting.
As per the rules, a draft of the loan agreement signed by the finance minister and the central bank governor will be sent to the head office of the IMF before the proposal is placed at the board meeting.
Bangladesh sought the $4.5 billion loan from the IMF in July last year and the global lender agreed to provide the loan to Bangladesh subject to conditions.
A team led by Bangladesh Bank Governor Abdur Rouf Talukder met with the IMF on the sidelines of the World Bank-IMF annual meeting in Washington in October last. After the meeting, the governor told reporters that Bangladesh will get a loan from the IMF.
In order to set the conditions before giving the loan, an IMF delegation visited Dhaka from October 26 to November 9. The delegation met with the top management of several important government departments including the Bangladesh Bank and Bangladesh Energy Regulatory Commission.
On November 9, after the concluding meeting with the IMF delegation, Finance Minister Kamal clarified the reasons behind seeking the IMF loan.
He said, “The global economy is going through a transitional period. Almost all countries’ currencies depreciated against the dollar and foreign exchange reserves fell. The global economic crisis has affected the economy of Bangladesh to some extent. The IMF loan has been sought as a precautionary measure; to ensure that the global recession does not precipitate the country’s economic crisis.”
However, according to the letter the government sent to the IMF, Bangladesh urgently needs money for the balance of payments and budget support as times are bad.
The finance ministry sources said before participating in the meetings, the IMF delegation sought information from the relevant sectors. In response, the government departments have also provided information.
The IMF will disclose the terms of the loan after its executive board approves the loan proposal.
The first instalment of the loan, around $45.45 crore, will be released within 10 days of the board’s approval. It is expected to be available in the first week of February. The last instalment of this seven-phased loan will be released in December 2026. The average interest rate on the loan will be 2.2 per cent.
Conditions
Sources at the Financial Division said the expected IMF conditions for the loan falls into three categories — quantitative performance criteria (QPC), structural performance criteria (SPC), and general commitments. Among those, all QPC conditions will be binding.
For many years, the Washington-based multilateral lender has been looking to bring in reform to calculate Bangladesh’s foreign exchange reserves following international standards. The Bangladesh Bank has already started working on it.
The rate of internal revenue collection is still below 10 per cent in proportion to the gross domestic product (GDP). The IMF is expected to seek a standardised rate in this regard, according to the sources.
The international lender is also expected to set a limit on the budget deficit.
Other expected conditions are the implantation of international standards in fixing fuel prices, passage of Income Tax Act in parliament, amendments to the Bank Company Act, formation of a separate company for defaulted loans, detailed audit on tax exemptions, and earmarking of a specific portion of the national budget for social security programmes, etc.
Apart from these, there may be conditions for the reduction of subsidies, separation of savings certificates from the budget, withdrawing of the interest rate of 9 per cent on bank loans, bringing in transparency in cash and debt management, reduction of defaulted loans and ensuring good governance in the banking sector.
