At the IMF meeting on Monday, the third tranche of Bangladesh’s debt may be waived

Last Updated on June 24, 2024 8:28 am

The proposal to waive the third tranche of debt in favor of Bangladesh will be presented at the meeting of the Executive Council of the International Monetary Fund (IMF) on Monday. In that meeting, the final approval of the proposal to waive the debt of Bangladesh can be obtained. If it is approved the money will be released in next one-two days. At the same time Bangladesh will get that money. Then the country’s foreign exchange reserves will increase slightly. There will be some temporary relief. The flow of dollars in the market will increase slightly.

The meeting will be held at the headquarters of the IMF in Washington, the capital of the United States, at 9:30 PM Bangladesh time on Monday. The IMF mission that visited Bangladesh had already informed that the proposal could be approved in that meeting.

An IMF mission arrived in Dhaka on April 24 to see the progress of economic reforms and the implementation of the conditions given by the IMF regarding the waiver of loan installments. They stayed till May 8 and held meetings with various agencies of the government. In this they want to know about the progress of implementation of conditions and future reform activities.

Before leaving Dhaka, the delegation conveyed that they were happy with the progress in implementing the conditions. They will recommend in the report regarding the waiver of the third installment of the loan. They expressed hope that the executive council would approve the loan waiver proposal.

If the meeting approves the proposal, the loan amount will be available on Tuesday or Wednesday. This time, it is proposed to pay 115 million 2 million dollars for the third installment. The installment amount has also increased due to the large devaluation of the currency. If this money is received, the net reserve of the country will again exceed 2 thousand billion dollars. Earlier, the net reserves fell below 2 trillion dollars several times.

Earlier on January 31 last year, the IMF approved a loan proposal of 4.7 billion dollars in favor of Bangladesh. Of this, $116 million has been disbursed in two installments. Now it is at the stage of releasing $115 million for the third installment.

Another mission may come to Dhaka at the end of November this year regarding the waiver of the fourth installment of the loan. The fourth installment of the loan is scheduled to be disbursed in December.

According to the conditions, the IMF will review the conditionality and progress of implementation of the economic reform program before disbursing each tranche. Interest rates and the dollar have been raised to implement the terms of the third tranche of the loan. Contractionary monetary policy is followed to reduce the rate of inflation. The mechanism of adjusting fuel oil prices to the international market has been introduced on a limited basis. Electricity prices have been increased. As the cost of goods increases, so does the consumer’s cost of living, which causes great discomfort for the consumer.

Meanwhile, the IMF said that the dollar price must be fully market-based by next December as a condition for the fourth tranche while evaluating the concession of the third tranche of the loan. No intervention can be made in the interest rate of the loan. Gas and electricity prices should be increased. Definition of defaulted loans should be international standard. As the product price in the market will increase, the pressure on the consumer will also increase.

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