Government expects commitments of $6 billion from development partners by next June: Salehuddin

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DHAKA, December 03, 2024 (BSS) – Financial Advisor Dr Salehuddin Ahmed today said the government expects commitments of around $6 billion from development partners including the World Bank and the IMF, by next June.

“Following our discussions with development partners in Washington, we expect around $6 billion from development partners by next June,” he said.
The financial advisor said this after an IMF mission, led by IMF Country Representative Jayendu De, met him at his office in the Bangladesh Secretariat today.

The third IMF review mission arrived in the capital today to assess progress in meeting the conditions for releasing the fourth tranche of the $4.7 billion loan agreement.

Dr Salehuddin said in Washington that they had discussed with the World Bank, the IMF and the OPEC Fund and expected this amount to be reached by next June. “We also expect financing from the ADB and the OPEC Fund in the near future,” he added.
He went on to say: “The commitments will come, but the flow of aid will not arrive in just one year…”

The advisor said the IMF mission would likely come again in March next year to discuss the next line of action.

Regarding the progress of the ongoing $4.7 billion loan program, he said they expect to get $1.1 billion this time, probably in February-March 2025.

He said the IMF mission had come this time to look primarily at the income sector, along with fiscal deficit, growth and inflation.

“What kinds of strategies we have adopted so far and what we will undertake in the coming days… discussions will be held in this regard. The IMF mission will also hold discussions with the Bangladesh Bank on banking reforms, defaulted loans, depositor stress and other issues,” he added.

The financial advisor said that, overall, they argued that stability had arrived, even if not completely. “Now is the time to make investments and involve foreign donors,” he said.

He said that the exchange rate does not fluctuate too much now, although some banks required liquidity support, but Islami Bank, the largest private sector bank, has rebounded while other banks, will hopefully rebound gradually.

Dr Salehuddin said inward remittance flows are very good, export growth is good but imports are a little less as import of capital goods is a little less due to certain restrictions.

“We are considering what can be done in this regard,” he added.
Overall, he said the IMF mission would stay here for a few days.

“We told them that whatever steps we take will be beneficial for the country in the future,”

He said the government would not take any fancy steps that could put the successive government in discomfort. “We will take action after careful consideration and careful consideration. They (the IMF mission) are also convinced,” he said.

Dr Salehuddin, also a former central bank governor, said he hoped the IMF would set such targets in the interest of the country’s economic development.

Responding to a question, he said they would seek additional funds after the discussions.

“Now we are discussing the ongoing loan program and then we will consider seeking additional financing,” he added.

The financial advisor said the government’s reform initiatives, such as banking and revenue sector reforms, have costs and require foreign financing as well as resolving the trade deficit and current account. “We have already contacted the World Bank about this,” he said.

The IMF assessment mission is scheduled to leave on December 17.

Bangladesh has received three installments under the IMF loan agreement so far.
On June 24 this year, the IMF approved the release of $1.11 billion as the third tranche of Bangladesh’s $4.7 billion loan.