As part of the $ 4.5 billion loan program negotiated with the Bangladeshi government, a team from the International Monetary Fund (IMF) is anticipated to appear in the capital this week to start the process of financial sector reform.
The IMF team will meet with representatives from Bangladesh Bank, the Ministry of Forest, Environment, and Climate Change, and important figures in the Finance Division. Roughly $1.3 billion of the loan amount will be disbursed through the Resilience and Sustainability Facility (RSF).
The RSF is anticipated to support Bangladesh’s need for affordable, long-term funding for climate investment, stimulate climate financing, and ease balance of payment strains from import-intensive climate investment.
According to sources at Bangladesh Bank, the group would like to learn the most recent data on various economic indicators during their visit with the aim of releasing the next loan payment for Bangladesh.
The central bank is putting into effect a number of policy reforms, including those pertaining to reserves, the foreign exchange rate, monetary policy, debt recovery, interest rates, and GDP and inflation concerns.
It is unclear how far the central bank will go with this change, which includes letting the currency float against the US dollar. The plans also call for raising retail electricity prices and enabling the private sector to import fuel.
Additionally, a long-term strategy will be developed to raise the tax-to-GDP ratio and convert trade prices, including those for energy products, to a use-based system. The official stated that a decision has already been made regarding the execution of these measures at the highest level of the government.