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International Monetary Fund (IMF) Deputy Managing Director Antoinette Monsio Sayeh is scheduled to meet Finance Minister AHM Mustafa Kamal on Sunday night to discuss Bangladesh’s economic challenges and how IMF can potentially assist to overcome them.
Before that, she would also meet Bangladesh Bank Governor Abdur Rouf Talukder on Sunday morning, ahead of the signing of a $4.5 billion loan agreement between the two parties.
Earlier on Saturday, Antoinette arrived in Dhaka for a five-day visit from January 14 to 18. She will get a complete concept of how Bangladesh should be presented before the executive board of the IMF through the experience of this visit.
This official visit is aimed to prepare Antoinette for discussion over the $4.5 billion loan agreement with the IMF executive board. She would inquire about Bangladesh’s economic progress for the past few decades, the country’s current condition and future possibilities.
During the visit, the top IMF official is also scheduled to meet with Prime Minister Sheikh Hasina, Jatiya Sangsad Speaker Shirin Sharmin Chaudhury, 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. Besides, she would visit an industrial unit to witness the progress of the readymade garment industry of the country and Dhaka University.
Antoinette would also visit India, Vietnam and Thailand after concluding her Dhaka tour focusing on strengthening IMF’s relation with Asian countries, stated the IMF sources.
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.
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.
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, the passage of the 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.
