1st instalment of $4.7b IMF loan received

Bangladesh on Thursday received $476 million from the International Monetary Fund (IMF) as the first instalment of a $4.7 billion loan, which the global lender approved late on Monday.

Confirming the matter to The Business Post, Bangladesh Bank Executive Director and spokesperson Md Mezbaul Haque $476.17 million was added to the foreign exchange reserve on Thursday.

He said a total of $482.40 million was added to the forex reserve on the day. The rest of the amount — $6.13 million — came from Asian Development Bank.

As a result, the country’s gross foreign exchange reserve rose to $32.69 billion on Thursday, from $32.19 billion on Wednesday.

On that day, the central bank injected $83 million into the banking sector from reserves to meet the US dollar shortage.

The IMF loan will be given in tranches over a 42-month programme to help preserve macroeconomic stability, protect the vulnerable and foster inclusive and green growth.

Bangladesh will get about $3.3 billion under the Extended Credit Facility and the Extended Fund Facility, and about $1.4 billion under the Resilience and Sustainability Facility, as per the IMF press release.

The remaining amount of the loan will be disbursed in six equal instalments of $704 million each in later phases. Industry insiders said the fresh injection will boost the forex reserve, which is now seeing a falling trend due to high import payments.

In the last six months, the central bank injected over $9 billion into the banking sector from the reserves, which was at a record $48.6 billion in August 2021.

IMF said that Bangladesh’s robust economic recovery from the Covid-19 pandemic has been interrupted by Russia’s war in Ukraine, leading to a sharp widening of Bangladesh’s current account deficit, depreciation of the taka and a decline in foreign exchange reserves.

Expressing gratitude to the IMF for approving a loan of US$ 4.7 billion to Bangladesh, the finance minister said, “Many people suspected that the IMF might not give us this loan. They thought the fundamental areas of our macroeconomics were weak, so the IMF would refrain from lending.

“Special thanks and gratitude to IMF Deputy Managing Director (DMD) Antoinette Monceau Sayeh and Head of Mission Rahul Anand who visited Bangladesh on this loan,” he said issuing a press release on Tuesday.

Besides, the Finance Minister also expressed his gratitude to Bangladesh Bank Governor Abdur Rauf Talukder and Finance Department Senior Secretary Fatima Yasmin and related officials of the Ministry of Finance who worked on this loan program.