12:00 AM, May 31, 2014 / LAST MODIFIED: 12:00 AM, May 31, 2014

IMF to provide $141m more

IMF to provide $141m more

Staff Correspondent

The International Monetary Fund (IMF) has decided to disburse $140.9 million to Bangladesh as part of the three-year Extended Credit Facility (ECF) arrangement.
    The decision came after IMF completed the fourth review of Bangladesh's economic programme yesterday. This will bring the total disbursements under the arrangement to about $704.3 million.
"Bangladesh has made further progress in strengthening macroeconomic stability under the ECF-supported programme," said a press release of the IMF.  
"While economic activity was affected by unrest and uncertainty in the run-up to the January 2014 general elections, international reserves have continued to increase.
"The ratio of public debt to GDP is on a downward path, and underlying inflation has been easing," the release said.
The review said Bangladesh had been able to meet the standard set by the ECF arrangement in getting the next part of the disbursement.  
Earlier on April 11, 2012, the three-year ECF arrangement for Bangladesh was approved by the IMF Executive Board for a total amount equivalent to about $986 million.  
The IMF considered 'resurgence of unrest' the main risk for growth. The current account of the balance of payments is projected at a surplus of 1.3 percent of GDP in FY14, and is expected to move into a moderate deficit in FY15, said the press release.
Macroeconomic policies under the authorities' programme are set to remain focused on safeguarding stability and building policy buffers. With inflation risks tilted to the upside in the near term, monetary policy should remain prudent, it said.
"Strengthening the state-owned commercial banks remains another focus of financial reforms, centred on improving governance, automating financial reporting, and recapitalising these banks," the release said.
Steps have also been taken to improve working conditions in the garment industry, including through a sizeable increase in the minimum wage, and to strengthen the targeting and efficiency of social safety net programmes.
"Continued progress on these fronts should contribute to promoting high, sustained, and inclusive growth," it added.



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