The IMF has established 33 requirements for the forthcoming two loan installments.
Bangladesh must meet 33 new conditions by June next year to qualify for the next two disbursements under the International Monetary Fund's $4.7 billion loan program. The IMF approved the third tranche of $1.15 billion recently, bolstering Bangladesh's foreign exchange reserves.
These conditions aim to address persistent challenges including dwindling foreign currency reserves, rising inflation, lower revenue generation, and governance issues in the banking sector. In a letter to IMF Managing Director Kristalina Georgieva, Finance Minister Abul Hassan Mahmood Ali acknowledged ongoing external economic pressures hindering macroeconomic stability, pledging intensified efforts in response.
The outlined steps include increasing revenue to support higher development and social spending, enhancing fiscal governance, modernizing monetary policy frameworks, and further enhancing exchange rate flexibility. Additionally, measures will target reducing financial sector vulnerabilities, developing capital markets, improving the investment climate, and creating a climate-resilient environment.
The IMF's loan conditions include seven performance criteria and numerous structural benchmarks. Key criteria involve increasing net international reserves to $19.47 billion by next June and reducing the primary budget deficit to Tk 128,300 crore. Revenue targets necessitate raising tax revenue significantly, despite historical collection rates averaging lower than the current goal.
Structural benchmarks focus on improving tax compliance, modernizing monetary policy frameworks, and enhancing governance in state-owned enterprises. By December, these benchmarks include adopting a tax compliance improvement plan, formulating sector strategy papers, simplifying bank supervision structures, and increasing electronic fund transfers for government transactions.
The finance minister emphasized ongoing adjustments in monetary and fiscal policies to support inflation control and external resilience. The IMF praised recent measures to realign the exchange rate and implement new arrangements, underscoring the importance of periodic reviews to ensure effectiveness.