Enhanced IMF credits expected amid forex crunch

Bangladesh's current interim government eyes enhanced IMF credits as a fact-finding mission from the Washington-based Fund arrives here shortly for reappraisal of progress on an ongoing lending package worth US$4.7 billion, officials say.
The International Monetary Fund (IMF) mission is scheduled to visit Bangladesh in few days to discuss the country's overall economic development and future funding needs.
Julie Kozack, Director of the Communications Department of the IMF, disclosed the plans while speaking at a press briefing at the IMF headquarters in Washington, DC, on Thursday.
Ms. Kozack said the IMF team is assigned to find the real facts on the economic development of Bangladesh which the country is now undergoing centering the ousting of former prime minister Sheikh Hasina.
Further details about the team's visit will be communicated in due course, she added.
"We remain fully committed to working with Bangladesh, and in support of the people within the context of the IMF program, we will continue to work closely with the authorities to help advance the reform agenda," she explains in a transcript of the IMF press briefing.
And the team will be assessing all of the economic developments and any potential financing needs, according to Ms. Kozack, also the spokesperson for the IMF.
The multilateral development financier has also expressed its profound condolences for the loss of life and wishes early recovery for those who sustained injuries during the recent protests.
"It is very distressing to -- it was very distressing to hear about those losses of lives. From the IMF side, we are working closely with the interim government," she notes.
The delegation is scheduled to meet senior officials, including Governor of Bangladesh Bank (BB) Dr Ahsan H. Mansur, from September 24 to 30 discussing the overall macroeconomic situation that includes banking-sector reforms, exchange rate, balance of payments and monetary policy issues.
"We're taking preparations to face the IMF mission," a senior BB official told the FE Friday, without elaboration.
However, the central bank's senior officials have already held two virtual meetings with the IMF officials discussing issues like getting an extra US$3.0-billion loan from the global monetary watchdog.
At the meetings, the IMF officials wanted to know the loss of life and property that had taken place during the student protests followed by the devastating floods in Bangladesh.
Bangladesh has already sought $3.0 billion more in budget support in addition to the present $4.7 loan package bound by strings that commit Bangladesh to reforms.
In an interview with Bloomberg, Bangladesh's new central bank governor, Ahsan H. Mansur, said the loan is needed to recover from the recent political turmoil that the country went through in the lead-up to the August-5th uprising.
During the interview, the governor also said the central bank is also buying dollars from local banks to clear unpaid debts.
Dollar-denominated funding support is deemed exigent as the country's foreign-exchange reserves plummeted below $20-billion mark when this stand-in regime was installed in state power through the July-August student-mass uprising.
Forex crunch forced import squeeze and buildup of back pay to creditors, particularly in energy and power sector.

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