IMF team now in Dhaka for talks on $4.5 billion loan

An International Monetary Fund (IMF) team is now in Dhaka to discuss the terms and conditions of a prospective $4.5 billion loan for the Bangladesh government.

Officials of the Ministry of Finance said the global lender would hold meetings with various government departments during then visit slated to last till November 9, reports UNB.

IMF Mission Chief to Bangladesh Rahul Anand is leading the delegation.

Fatima Yasmin, senior secretary of the Ministry of Finance, said, "We are optimistic about getting a loan from the IMF to deal with the ongoing crisis due to the Russia-Ukraine war."

She said this to reporters on Wednesday after meeting members of the IMF delegation who called on her at the Secretariat.

Earlier on October 21, the IMF in a statement released by its head office in Washington said the team would start discussions on economic and financial reforms and policies with the Bangladeshi authorities.

The two sides will be hoping to make progress towards a staff-level agreement on funding in the coming months – the loan agreement is not expected to be finalised before January.

A staff-level agreement means that the IMF team and the negotiating team of a sovereign country, in this case Bangladesh, are able to reach a deal on a country's overall economic programme incorporating the loan, its disbursement schedule, and the planned reforms and policies. This will then be presented to the IMF Executive Board.

The purpose of the visit is to start that process formally. Discussions will include borrowing from the IMF's Enhanced Credit Facility (ECF), Enhanced Funding Facility (EFF) program, and New Initiatives, Resilience and Sustainability Fund (RST) program.

While the first two were part of the IMF's existing lending toolkit, the RST was established last May, in light of the war in Ukraine breaking out to hurt the world economy's recovery from the devastating pandemic.

The newly-established fund is meant "to help countries build resilience to external shocks and ensure sustainable growth, contributing to their long-term balance of payments stability."

Last July, the IMF confirmed that Bangladesh had become the fourth country to apply for a loan under the RST facility.

Abdur Rouf Talukder, Governor of Bangladesh Bank, recently returned from the annual meetings of the IMF and World Bank in Washington, and said there were positive indications on a loan agreement being reached between the two parties.