Talks with IMF for $4.5b budget support 'positive'

The discussion with the International Monetary Fund (IMF) about receiving $4.5 billion in budget support over the next three years has been positive, according to Finance Division officials.

"Formal discussions will now begin with the agency. Prior to that, the finance minister will send a summary to the prime minister seeking her consent," a Finance Division official told The

Business Standard after the virtual meeting with the IMF on Wednesday.

The official said a letter asking for the credit line would be formally sent to the IMF after the agency's proposed reforms get the government's political consent. The process will start immediately after Eid – in the second week of July.

A mission from the IMF's Washington headquarters will visit Dhaka on 12 July. Although this will be a regular mission, there will be talks about the credit line.

Finance Division Secretary Abdur Rouf Talukder, Economic Relations Division (ERD) Secretary Fatima Yasmin and Planning Commission Member Sharifa Khan attended the virtual meeting.

According to the finance ministry officials, it might take at least six months to sign the loan agreement after all such formalities are completed. 

There are now big deficits in Bangladesh's balance of payments and current account balance because of rising prices of commodities in the global market and higher import bills than export earnings.

As a result, the forex reserve has come under strain and inflation hit an eight-year high with Taka losing its value substantially.

With Europe and the United States facing recession risks, Bangladesh might see its export earnings fall in days to come.

In July-April of the current fiscal year, Bangladesh's trade deficit stood at $27.57 billion, while its current account deficit was $15.32 billion.