IMF mission wants workplan on revenue mobilisation, inflation

A fact-finding mission of International Monetary Fund (IMF) yesterday sought to know about the interim government's workplan for revenue mobilisation, curbing inflation and increasing foreign exchange reserves alongside reform initiatives for the banking sector.

Arriving in Dhaka yesterday on a weeklong visit, the four-member delegation, led by Mission Chief Chris Papageorgiou, made the query at a meeting with Salehuddin Ahmed, finance and commerce adviser to the interim government.

The mission is to assess Bangladesh's potential financial needs as Ahmed and Bangladesh Bank Governor Ahsan H Mansur had sought an extra $3 billion loan during separate virtual meetings with the IMF earlier.

The multilateral lender has an ongoing $4.7 billion loan programme for Bangladesh, which was approved in January last year.

The query highlights the fact that inflation has been at an elevated level for the past two years. Last month, overall inflation stood at 10.49 percent while food inflation was at 11.36 percent.

Meanwhile, revenue collection has dropped by 11 percent year-on-year in the first two months of the current fiscal year of 2024-25.

Moreover, foreign currency reserves have been dwindling over the past two years, having barely enough to cover import payments of a couple of months, which is the IMF's minimum benchmark.

And the scam-hit banking sector is struggling with a huge amount of bad loans and a lack of good governance.

At yesterday's meeting, the IMF mission gave a presentation on their plans centring the visit. It also discussed the government's near-term priorities and commitments under the IMF-supported programme and planned fiscal reforms.

The interim government informed the mission about various steps that have been taken for revenue mobilisation and curbing inflation, according to a finance ministry official who took part in the meeting.

"We have sought technical and financial assistance from the IMF," Ahmed told journalists at Bangladesh Secretariat afterwards.

"We need resources. We will utilise our local resources as much as we can, but for specific areas, we will require foreign assistance," he added.

However, the interim government may revise the amount of loan that it would finally seek as it is dependent on the assistance other donor agencies end up confirming.

"We asked for new resources (loans), but did not mention any figure. We will meet the IMF policymakers in Washington in October," he said.

Yesterday, the IMF mission also met Ahsan H Mansur and sought to know about the reforms being brought about in the banking sector and initiatives for increasing foreign currency reserves.

In response, Bangladesh Bank informed that a market-based exchange rate has been brought about for foreign currencies and further measures will be taken as necessary.