It said Bangladesh cannot get benefit from macroeconomic stability unless inflation is controlled.

IMF asked the central bank to take special measures to recover defaulted loans from top 20 defaulters of NCBs.

The visiting IMF mission detailed the measures at separate meetings with Bangladesh Bank (BB) and Finance Division.

The review commission arrived in the capital on February 21 to assess the implementation progress of IMF conditions for the second phase of Poverty Reduction Growth Facilities (PRGF) loan.

Finance Secretary Zakir Ahmed Khan chaired the meeting at the ministry and BB Governor Dr Fakhruddin Ahmed at the central bank.

Although the government target was to keep the inflation rate below 4.5 percent in this financial year, it crossed 6.5 percent already.

The BB officials apprised the team that the central bank has already reduced money supply to bring down the rate, and IMF endorsed the measure.

The commission was critical of the slow progress in appointing private management team for Agrani Bank. As per the government commitment to IMF, the management team was to take over the mantle of Agrani Bank by March 1.

The commission also asked BB to extend the memorandum of understanding (MoU) with the four NCBs up to December 2004, which was expired on December 31 last year.

IMF also asked the government to cut down the interest rate in post office savings equipment.

During a series of meetings over the last 12 days, the mission observed the projected GDP target of 5.5 percent is achievable, thanks to the booming harvest this year. But at the same time, IMF warned that frequent hartal may affect the GDP growth, finance ministry sources said.

The six-member commission, led by IMF's Asia Pacific Assistant Director Champen Puckahtikom, leaves Dhaka today.

IMF disbursed the first instalment of the PRGF loan in June last year and the second in the middle of January.

If the review report goes in favour, the third instalment should be disbursed by June 15.