[🇧🇩] Monitoring Bangladesh's Economy

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Loan review team disclosure today
IMF may disburse $1.14b in twin tranches

Total funds may rise to $1.3b on last-minute consensus
Syful Islam
Published :
Apr 17, 2025 00:28
Updated :
Apr 17, 2025 00:28

Bangladesh may receive US$1.14 billion in two instalments together from a package loan extended by the International Monetary Fund (IMF), finance officials expect as a latest review of the lending terms concludes.

An announcement to this effect will be given today (Thursday) in tune with staff-level agreements the multilateral lender has reached with the Bangladesh authority, they said.

The IMF review mission had a wrap-up discussion with Finance Adviser of the interim government Dr Salehuddin Ahmed at his office on Wednesday afternoon that ended on a positive note, according to the officials.

Headed by Chris Papageorgiou, IMF's Mission Chief for Bangladesh, came to Dhaka on April 6 and its mission would end with the announcement.

The $1.14-billion fund is coming under fourth and fifth tranches in $570 million each. The fourth tranche was scheduled to come by the first week of February, but got stuck.

Approval for the instalment was deferred by the IMF citing Bangladesh's failure to accomplish two prior actions-additional revenue mobilisation and exchange-rate flexibility.

The Washington-headquartered lender later informed Bangladeshi officials that approval for the fourth tranche would be taken together with review of achievements for the fifth tranche of the $4.7-billion lending programme.

Finance Ministry officials, however, could not confirm whether the lender will also provide an additional $750 million that the two sides had agreed in September last.

"It is certain that we are getting two instalments together," said one finance official, referring to their nearly two-week-long discussions with the IMF team.

However, he was hesitant to confirm that Bangladesh is also getting the additional $750 million.

The IMF granted the $4.7-billion loan to Bangladesh in January 2023 to help support the country's dwindling economy to accomplish stability. The loan was scheduled to be given in seven instalments by May 2026.

Finance Ministry officials say the National Board of Revenue (NBR) has made a commitment to generating additional revenue as suggested by the IMF. The Fund had been pushing to set a higher revenue target in the next fiscal budget aiming to raise the tax-GDP ratio by 0.9%.

On exchange-rate flexibility, the two sides have reached a sort of consensus, but still some differences remained pending, officials have said.

So, they say, the two instalments' coming together has been confirmed.

However, another official says, the total amount can even increase to $1.3 billion, each tranche bearing $650 million, if a last-minute consensus reached on some pending issues.

Contacted Wednesday, an IMF official in Dhaka did not make any comment regarding the mission outcome before a formal announcement.​

 

[Saif]

IMF delays staff level agreement with Bangladesh

The International Monetary Fund (IMF) has delayed reaching a staff level agreement due to existence of some differences with the Bangladeshi authorities. A visiting team of the IMF, headed by Chris Papageorgiou, the agency’s Mission Chief for Bangladesh, made the announcement on Thursday at

thefinancialexpress.com.bd

IMF delays staff level agreement with Bangladesh
FE ONLINE REPORT
Published :
Apr 17, 2025 17:00
Updated :
Apr 17, 2025 17:00

The International Monetary Fund (IMF) has delayed reaching a staff level agreement due to existence of some differences with the Bangladeshi authorities.

A visiting team of the IMF, headed by Chris Papageorgiou, the agency’s Mission Chief for Bangladesh, made the announcement on Thursday at a press conference in the capital.

“Discussions are continuing with the objective of reaching a staff-level agreement in the near term- including during April 2025 IMF-World Bank Spring Meetings in Washington, DC-to pave the way for the completion of the combined third and fourth programme review,” Mr Papageorgiou said.

However, Jayendu De, Resident Representative of IMF in Dhaka, said the agency will try to release the fourth and fifth tranches of the $4.7 billion loan before the end of the current fiscal year.​

 

[Saif]

No sign of taming inflation and getting at the root of problems

In this country what the businesses demand, they get and they get it at the cost of the consumers. The public are a disparate lot and in the absence of a unified platform, their demands are met with indifference. Contrary to this, traders take resort to all kinds of tactics ---from creation of arti

thefinancialexpress.com.bd

No sign of taming inflation and getting at the root of problems
Nilratan Halder
Published :
Apr 17, 2025 21:50
Updated :
Apr 17, 2025 21:50

In this country what the businesses demand, they get and they get it at the cost of the consumers. The public are a disparate lot and in the absence of a unified platform, their demands are met with indifference. Contrary to this, traders take resort to all kinds of tactics ---from creation of artificial crisis to arm-twisting to unilateral price hike ---in order to get their way. A case in point right now is the price increase of soybean oil by Tk 14 and Tk 12 to Tk 189 and Tk169 a litre for the bottled and loose varieties respectively. Palm oil price has also shot up by Tk 12 to Tk169 a litre. The importers and millers of the cooking oil had been clamouring for long to get the prices increased. But after the increase, they still grumble that the price of soybean oil justified a hike of Tk 21 a litre. They have foregone the profit of Tk 7.0 a litre considering the greater good of the consumers! How condescending!

The truth is that this time businesses involved with cooking oils have at least a valid excuse for hiking prices. With the government withdrawing the 10 per cent duty waiver from the 15 per cent granted earlier for keeping the prices at a tolerable level during the month of Ramadan, they are unlikely to sell cooking oil at the same prices as before. But is the claim made by the Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association (BVORVMA) that the withdrawal of duty waiver justified a Tk21 increase? Did the ministry concerned take a meticulous account of the import, transport and production costs before agreeing to the BVORVMA's demand for the record price rise? Price of soybean oil was increased by Tk8.0 a litre in December last. Since then its price has declined in the international market.

The question is, can the common people afford cooking oils at these atrocious prices? Even the commerce adviser had to admit that the current levels of cooking oil prices "would pose challenges for consumers". But then, on the question of VAT waiver, he flatly denied the government had any other option. Duty waiver at the moment is a highly sensitive matter, he claimed. How ludicrous! The compulsion of revenue collection and no concessions in matters of tariff as dictated by the International Monetary Fund (IMF) have proved more sensitive than the unpopular price hike drawing public flak!

What about the release of the fourth and fifth tranches of the $4.7 billion IMF loan? After an IMF team's visit to Dhaka, the news about it has almost gone blank. Although there is a casual report on the release of the two tranches together in June, there may be more to it than meets the eye. Once a least developed or developing country seeks help from the multilateral organisations, particularly the Bretton Woods Institutions, the compulsion for going by the recipes, stinging as they may be, is overwhelming. No wonder, the diktat from such organisations has to be complied with even if the people are left to bleed.

What is particularly galling is that cooking oil is not the only essential item that has registered such an outrageous price hike. Onion, egg and vegetables have followed suit. All this comes right at a time when gas price for new factories and industries as well as for the existing ones using the fuel in excess of the approved load has been increased by 33 per cent. According to the Petrobangla, a total of 147.8 million cubic metre of gas was used in excess of the approved load by the country's industrial units between November 2023 and October 2024. The captive power plants also used an additional 57.6 million cubic metre of gas to their approved quota. Now the 33 per cent increased price will be applicable on this volume of gas.

The implications and indications of all these transpire a further escalation of prices of commodities. It was the winter's abundant supply of vegetables and items of a short-duration shelf life that was mainly responsible for bringing the inflation below the double digit. Nothing goes to the government's credit. In fact, rice -not easily perishable---continued to register price increase even in the peak harvesting season of Aman paddy. Meanwhile, wheat has also become costlier by Tk 2.0-5.0 a kilogram. The government's policy failure becomes more glaring when it fails to protect the interests of farmers. Right now potato growers are suffering because of low price as well as a lack of storage facility.

Market is most likely to grow further jittery with the onset of the lean season and the monsoon. Already onion has raised the signal that the country will have to grapple with this perennial trouble maker. Construction of a number of modern cold storages and warehouses for some basic food items such as paddy or rice, potato, onion, tomato etc; by the government for meeting emergencies or offsetting market manipulation by business syndicates could be undertaken on a priority basis. A good dispensation ought to be proactive instead of reactive in solving food crises. Unfortunately, the interim government has failed to plan innovatively to deal with the crises of essentials both locally produced in abundance and imported like cooking oil, the share of which is more than 90 per cent. Elimination of the middlemen and putting in place a market mechanism to offset business syndicates' intrigues can make the market stable and rein in inflation.​