IMF Reaches Agreement With Bangladesh in Step Toward More Funds

[Black_cats]

IMF Reaches Agreement With Bangladesh in Step Toward More Funds​

Arun Devnath, Bloomberg News

, Bloomberg

(Bloomberg) -- Bangladesh has reached a pact with the International Monetary Fund that would allow the country to receive further funds under a $4.7 billion loan package.

A team from the IMF reached a staff-level agreement on the policies needed to complete the first review of the loan program, the Washington-based lender said in a statement after concluding a visit to the country Thursday. The pact is subject to approval from the IMF board and will pave the way for release of $681 million worth of loans.

The funds will be key to cushioning Bangladesh’s economy from headwinds amid a global slowdown and elevated commodity prices. Rating agencies, including Moody’s, had slashed Bangladesh’s credit rating deeper into junk territory, citing a deteriorating external position.

The South Asian nation has made substantial progress on structural reforms, but global financial tightening, coupled with existing vulnerabilities, is making “macroeconomic management challenging, putting pressures on the taka and FX reserves,” IMF’s Bangladesh mission chief Rahul Anand said.

To tackle the challenges and restore economic stability, Bangladesh will need further monetary tightening, a neutral fiscal policy, and greater exchange rate flexibility, he said.

Bangladesh expects approval for the disbursement of the funds at an IMF board meeting in December, central bank spokesman Mezbaul Haque told reporters at a media briefing in Dhaka.

Authorities have hiked taxes, removed subsidies and allowed the taka to float freely to meet the key prescriptions from the IMF to unlock more money. However, the nation missed key targets on foreign currency reserves and revenue collection.

Bangladesh’s forex stockpile dropped to $21.1 billion as of Oct. 11, covering about 4 months of imports and way below the IMF target of $25.3 billion. Its tax revenues fell 150 billion taka ($1.36 billion) short of the target set for the fiscal year ended June.

“Raising revenue is critical to create additional space for social spending and investment,” Anand said, adding that a concerted tax policy and administrative measures will be needed to raise Bangladesh’s low tax-to-GDP ratio in a sustainable manner.

The funds will also ease pressures on Prime Minister Sheikh Hasina, who is facing calls to resign and give way to a caretaker government to ensure free and fair polls. The largest opposition group, the Bangladesh Nationalist Party, will hold a street rally in Dhaka on Oct. 28 to expand protests against the government. Bangladesh is set to hold elections in January next year.

(Updates throughout)

©2023 Bloomberg L.P.

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[@blue Ocean]

To tackle the challenges and restore economic stability, Bangladesh will need further monetary tightening, a neutral fiscal policy, and greater exchange rate flexibility, he said.

Now, a dollar cost around Tk120. Will it go up to Tk200? i was expecting it to reach Tk150, though!!

I wonder, what IMF wants the value to be.

 

[IndianLite]

Now, a dollar cost around Tk120. Will it go up to Tk200? i was expecting it to reach Tk150, though!!

I wonder, what IMF wants the value to be.

Another one of your predictions went to the toilet

Almost all non petro currencies have fallen about 20% against the Dollar.

That’s no surprise given USA is now the largest oil producer and Dollar is a petro and reserve currency!!

 

[saif]

IMF Reaches Agreement With Bangladesh in Step Toward More Funds​

Arun Devnath, Bloomberg News

, Bloomberg

(Bloomberg) -- Bangladesh has reached a pact with the International Monetary Fund that would allow the country to receive further funds under a $4.7 billion loan package.

A team from the IMF reached a staff-level agreement on the policies needed to complete the first review of the loan program, the Washington-based lender said in a statement after concluding a visit to the country Thursday. The pact is subject to approval from the IMF board and will pave the way for release of $681 million worth of loans.

The funds will be key to cushioning Bangladesh’s economy from headwinds amid a global slowdown and elevated commodity prices. Rating agencies, including Moody’s, had slashed Bangladesh’s credit rating deeper into junk territory, citing a deteriorating external position.

The South Asian nation has made substantial progress on structural reforms, but global financial tightening, coupled with existing vulnerabilities, is making “macroeconomic management challenging, putting pressures on the taka and FX reserves,” IMF’s Bangladesh mission chief Rahul Anand said.

To tackle the challenges and restore economic stability, Bangladesh will need further monetary tightening, a neutral fiscal policy, and greater exchange rate flexibility, he said.

Bangladesh expects approval for the disbursement of the funds at an IMF board meeting in December, central bank spokesman Mezbaul Haque told reporters at a media briefing in Dhaka.

Authorities have hiked taxes, removed subsidies and allowed the taka to float freely to meet the key prescriptions from the IMF to unlock more money. However, the nation missed key targets on foreign currency reserves and revenue collection.

Bangladesh’s forex stockpile dropped to $21.1 billion as of Oct. 11, covering about 4 months of imports and way below the IMF target of $25.3 billion. Its tax revenues fell 150 billion taka ($1.36 billion) short of the target set for the fiscal year ended June.

“Raising revenue is critical to create additional space for social spending and investment,” Anand said, adding that a concerted tax policy and administrative measures will be needed to raise Bangladesh’s low tax-to-GDP ratio in a sustainable manner.

The funds will also ease pressures on Prime Minister Sheikh Hasina, who is facing calls to resign and give way to a caretaker government to ensure free and fair polls. The largest opposition group, the Bangladesh Nationalist Party, will hold a street rally in Dhaka on Oct. 28 to expand protests against the government. Bangladesh is set to hold elections in January next year.

(Updates throughout)

©2023 Bloomberg L.P.

BNN Bloomberg – Canada Business News, TSX Today & Interest Rates

Get the latest Canadian business news, TSX updates, interest rates and Bank of Canada coverage. Explore stock market investing and get expert financial insights on investment portfolio strategies.

www.bnnbloomberg.ca

Tax collection needs to be increased and in order to do that NBR needs to target big business enterprises.

 

[@blue Ocean]

Another one of your predictions went to the toilet

Almost all non petro currencies have fallen about 20% against the Dollar.

That’s no surprise given USA is now the largest oil producer and Dollar is a petro and reserve currency!!

You seem to be comparing BD with Japan. But BD is an underdeveloped country without any technological prowess and Japanese know all kinds of technologies.

However, a weak yen is good for Japanese exports and a weak Taka is bad for BD economy for now. With an exchange rate of Tk200 to a dollar will down BD GDP to below $200 billion.
Do not you agree with me?

However, everything changes for better once the BAL party is gone. A weak Taka is then good. More exports and less imports, and gradually people start building factories.

Do you not like Hasina departure?

 

[SoulSpokesman]

Good news. All thanks to the wise governance by SHW.

Regards

 

[IndianLite]

You seem to be comparing BD with Japan. But BD is an underdeveloped country without any technological prowess and Japanese know all kinds of technologies.

However, a weak yen is good for Japanese exports and a weak Taka is bad for BD economy for now. With an exchange rate of Tk200 to a dollar will down BD GDP to below $200 billion.
Do not you agree with me?

However, everything changes for better once the BAL party is gone. A weak Taka is then good. More exports and less imports, and gradually people start building factories.

Do you not like Hasina departure?

As I keep telling you Bangladeshi “educated people” - Bangladesh faces two threats:

1. Wahhabism
2. Corruption

However, Wahhabism is an existential threat whilst corruption is a manageable threat.

Only Hasina can keep Wahhabism at bay because she is not scared of literally murdering the Mullahs.

Bangladesh’s education system is piss poor hence you lot are unable to see the real threats. You lot get easily seduced by Pinaki videos. You lot are too gullible hence not ready for democracy!!!

 

[saif]

You lot are too gullible hence not ready for democracy!!!

That's why I want military to take over at least for 5 years.

 

[@blue Ocean]

As I keep telling you Bangladeshi “educated people” - Bangladesh faces two threats:

1. Wahhabism
2. Corruption

However, Wahhabism is an existential threat whilst corruption is a manageable threat.

Only Hasina can keep Wahhabism at bay because she is not scared of literally murdering the Mullahs.

Bangladesh’s education system is piss poor hence you lot are unable to see the real threats. You lot get easily seduced by Pinaki videos. You lot are too gullible hence not ready for democracy!!!

So far, BALism has proved to be the worst enemy of BD. It stole democracy.