IMF bosses favour ECF to calm forex reserve

Most of the 24 directors of the executive board of the International Monetary Fund (IMF) have favoured US$1.0 billion loan under extended credit facility (ECF) to help stabilise Bangladesh's foreign exchange reserves, reports bdnews24.com. The executive board on October 28 concluded consultation with Bangladesh on the Article IV and discussed the macroeconomic situation to make its assessment. "Many directors favourably noted authorities' interest in a possible extended credit facility supported programme to help stabilise the reserve position and foster the reform process," the assessment of the executive board said. Bangladesh Bank Governor Atiur Rahman after coming back from Washington last month said that Bangladesh had positive talks with the IMF about the ECF and the government was hoping to get the money soon. Mr Atiur went to the US to attend the IMF's annual meeting. "There are no conditions on the ECF, it is a good loan. We had been discussing about this loan for some days now and are expecting positive results. I think the negotiations have gone well and I believe that positive decision will come from the IMF board meeting," Mr Atiur said. The central bank's foreign currency reserves fell below $10 billion recently. The directors feared that at the end of the current fiscal year (FY) 2011-12, the foreign exchange reserves may help pay costs of import for about 70 days (2.3 months), down from 87 days (2.9 months) in the FY 2010-11. The board in the meeting emphasised well-designed measures to reduce subsidy cost by adjusting domestic energy price with targeted safeguards to protect the poor.