VAT Hike on 100 Products Fails to Sway IMF; Fourth Installment Delayed

Bangladesh’s Fourth Installment of $47 Billion Budget Support Loan Delayed Until March by IMF

Dhaka: The International Monetary Fund (IMF) has postponed the release of the fourth installment of Bangladesh’s $47 billion budget support loan until March. IMF cited the suspension of its activities due to natural disasters as the reason for the schedule change.

A senior official from Bangladesh Bank told UNB that the issue was initially scheduled to be discussed in the IMF Executive Board meeting on February 5. However, the meeting has now been postponed, with a new date set for March 12.

IMF has clarified that the change in schedule is due to the suspension of its month-long activities caused by natural disasters.

The IMF has added several conditions for the loan disbursement. One key condition is the simplification of the US dollar exchange rate, which the central bank is aligning with the current market. Another contentious issue is the revenue target set by the National Board of Revenue (NBR).

While IMF officials have expressed concerns about these targets, a source from the NBR has stated that efforts to increase revenue collection are already underway and that there are no major obstacles on their end.

Following the first three installments under the loan program, Bangladesh is set to receive $645 million in the fourth installment. Meanwhile, Bangladesh has requested an additional $750 million under the $47 billion package.

While IMF has agreed to this request, it has attached stringent conditions, including structural changes such as increasing revenue collection and separating tax collection from policy-making.