$1.0b IMF credit in February likely

Syful IslamThe International Monetary Fund (IMF) is likely to approve US$1.0 billion worth of Extended Credit Facility (ECF) for Bangladesh in February next year as the government is taking various measures in line with the suggestions of the former, a senior official working in a major donor agency said. "The steps the government has taken during the last couple of weeks, including the price hike of electricity and fuel oil, do indicate that it is following the suggestions of the IMF the Board of Directors of which will be meeting soon," the official, also an economist, told the FE seeking anonymity. Bangladesh has been trying to get loan from the IMF as budgetary since 2009 but could not succeed failing to meet the conditions set by the lender. The official said though the conditions set by the multilateral lender are very tough, the government is seeking the IMF loan because of the balance of payments (BoP) pressure. The conditions set by the IMF to its ECF disbursement included, passage of the new value added tax (VAT) law, reduction in subsidies given on fuel oils and power and cut in the government's bank borrowing. If approved, the ECF amount will be disbursed in three phases over a period of two fiscal years.