IMF approves $4.5b loan for Bangladesh

GBNEWS24DESK//

The International Monetary Fund yesterday gave the final approval to Bangladesh’s $4.5 billion loan proposal, in a development that is expected to calm the jitters surrounding the health of the country’s economy.

The decision came at a meeting of the IMF’s executive board, said finance ministry officials.

In his immediate reaction to the loan approval, Finance Minister AHM Mustafa Kamal told the media, “Many doubted that the IMF might not give us this loan. They thought that the fundamentals of our economy were weak, so the IMF would refrain from approving our loan proposal. This loan approval proves that our economy is standing on a solid foundation and our fundamentals are better than many other countries.”

This would be Bangladesh’s 13th loan from the lender, with the previous package taken in 2012.

The first instalment of $447.8 million would come in February, followed by six equal instalments of $659.18 million.

The interest rate would be about 2.2 percent. Of the $4.5 billion, $1.3 billion can be repaid over a 20-year horizon with a grace period of 10 years. The remaining amount must be paid back within 10 years; the grace period for a portion of the sum is 3.5 years and for another portion 5.5 years.

Earlier in November last year, the two parties reached a preliminary agreement on the loan programme, which would span over 42 months.

The government has agreed to time-bound conditions, including some key structural reforms stalled for years, that would preserve macroeconomic stability and support strong, inclusive and green growth while protecting the vulnerable.

The specifics of the loan programme could not be obtained at the time of going to print.

“Reforms in these areas, combined with measures to facilitate private investments and export diversification will help create conditions to make Bangladesh’s economy more resilient and support long-term, inclusive and sustainable growth,” said Antoinette Monsio Sayeh, the deputy managing director of IMF, earlier this month.