The IMF Programme Action Committee, constituted by the Finance Division, recently held meetings with the Ministry of Planning and the National Board of Revenue (NBR) to discuss how to fulfil the conditions set by IMF against its loan.
The committee will hold the third meeting with the Bangladesh Bank.
According to finance ministry sources, the 22-member committee will hold a series of meetings with relevant ministries, organisations and divisions of the government to meet the conditions set by the International Monetary Fund (IMF) against its $470 crore loan. The meetings will assess the impact of fulfilling the conditions on the public.
The sources said in the meetings with NBR and the planning ministry, the committee advised fixing an appropriate time for the fuel price hike, reducing defaulted loans and fixing market-based interest rates.
Seeking anonymity, a senior official of the finance division told The Business Post, “We want that fulfilling the IMF’s conditions do not make any negative impact on the purchasing power of the common people.”
He said, “The price of electricity has been increased several times recently. The action committee will suggest that electricity prices do not increase unnecessarily due to IMF conditions. We will also take care that increasing the tax-GDP ratio does not increase the tax burden of the people.”
The Finance Division constituted the 22-member IMF Programme Policy Action Coordination Committee, headed by Additional Secretary Rehana Perven, through a circular on January 4 this year.
This committee will immediately inform the finance division if there is any obstacle to fulfilling the IMF conditions. The committee is supposed to hold a meeting every two months to review the implementation progress of the first instalment of the IMF loan.
Bangladesh received the first instalment of the $470 crore loan from the IMF on February 2. The amount of this instalment was $47,62,70,000. The rest of the loan will be available over the next three years in six equal instalments.
The second instalment will be available in December this year and the last instalment will be available in December 2026. Each of the next instalments will be $70,40,00,000.
Bangladesh will have to carry out five types of reforms for getting the loan which was approved by the IMF board meeting on January 30. They are fiscal reforms, currency and exchange rate reforms, financial sector reforms, climate change reforms and structural reforms.
Although these reforms will be going on till 2026, some of them have to be done on an urgent basis within the next year.