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Morningsun Online //

The International Monetary Fund (IMF) has decided to waive the third tranche of loans for Bangladesh. The executive board meeting of the organization in Washington on Monday approved the third installment of about 111.5 million dollars. In Bangladeshi currency, the amount is about 13 thousand crores. In the next two days, this dollar will be discounted and added to the country’s foreign exchange reserves. This information is known from sources of Ministry of Finance and Bangladesh Bank.

In this regard, Bangladesh Bank Executive Director and Spokesperson. Majbaul Haque told the media that the IMF Executive Board has approved the third tranche of the loan for Bangladesh. 111 crore 50 dollars of this installment is expected to be released in the next two days.

Earlier, on April 24, the IMF mission came to monitor the implementation of the conditions based on last December for the third installment under the loan program. The delegation led by the head of the development microeconomics division of the organization, Chris Papageorziou, said in a statement on May 8 that the Bangladesh government and IMF officials have reached a consensus on this matter after two weeks of meetings and review activities with various government departments.

Bangladesh signed a 4.7 billion dollar loan agreement with the IMF on January 30 last year amid dwindling foreign exchange reserves. Three days later, the company released 476.2 million 70 thousand dollars in the first installment. Then on December 16, the second installment of 682 million dollars was released. The loan is scheduled to be fully repaid in seven installments till 2026. Subsequent installments of the second installment were to have equal amounts. But Bangladesh wants more money in the third and fourth installments as the reserves are further reduced. The company agreed to pay $115.2 million instead of $680 million in the third tranche, having already met several tough conditions and promised more major reforms to come. But later due to some change in the exchange rate, approval of 111.5 million dollars was given today. However, the total loan amount and tenure will remain the same.

A portion of this loan is from the Climate Fund, which is the first to be given to Bangladesh. So the IMF wants this program to continue. For this, at the request of Bangladesh, for the fourth installment, the net reserve target has been reduced from 5.34 billion dollars to 14.76 billion dollars at the end of next June. Although on track to meet many conditions, Bangladesh has not been able to meet any of the quarterly reserve targets since the start of the loan program. The IMF later revised down the target at the government’s request.

In August 2021, Bangladesh Bank’s reserves reached a maximum of 48 billion dollars or 48 billion. Now this reserve is below 25 billion or 2 thousand 5 billion dollars. However, in the last two weeks, the country’s foreign exchange reserves have increased by about 260 million dollars. According to the data of the central bank, the reserve was 2 thousand 452 million dollars on 12 June. Last Wednesday, it increased by 26 million dollars to 2 thousand 478 million dollars.

According to International Monetary Fund (IMF) accounting method BPM-6, reserves have increased by 318.2 million dollars. At the beginning of this month, according to BPM-6, the reserves were 1 thousand 872 million dollars. Last June 12 increased to 1 thousand 920 million 97 million dollars. Last Wednesday stood at 1 thousand 952 million 79 million dollars. However, according to the net of the IMF, the amount of this reserve is below 1 thousand 350 million dollars. According to the conditions of the loan program, it should be increased to 1 thousand 476 million dollars by the end of June. The availability of the third tranche of the IMF loan will increase the reserves slightly.

Meanwhile, the World Bank is lending 500 million dollars to Bangladesh as budget support. This money is being given under World Bank’s Development Policy Credit-II (DPC). The loan was approved at the board meeting held last Friday at the World Bank headquarters in Washington. The government is also trying to get budgetary support from other donors to increase the amount of reserves.