Thursday, May 11, 2023

IMF team warns Bangladesh of risks as reserves continue to decline

IMF team flags risks to Bangladesh as reserves fall further

The Worldwide Financial Asset hailed dangers to the Bangladesh economy, for example, expansion, development and unfamiliar stores as it closed its main goal under the $4.7 billion advance program.

A press release issued by the International Monetary Fund (IMF) following the May 7 conclusion of the staff team visit stated, "Persistent inflationary pressures, elevated volatility of global financial conditions, and slowdown in major advanced trading partners continue to weigh on growth, foreign currency reserves, and the Taka."

According to the press release, the IMF will conduct the initial review of its arrangements for the Resilience and Sustainability Facility, Extended Credit Facility, and Extended Fund Facility later this year.

Saves are supposed to tumble to $29.86 billion, the most minimal in seven years, after import bill installments for a very long time one week from now.

Trades fell 16.5% to $3.95 billion in April from a year sooner as orders from dress retailers eased back. In April, incoming remittances that contribute to the country's balance of payments decreased by 16 percent year-over-year to $1.68 billion.

The first installment of the IMF loans, which Bangladesh received in February for $476 million, is expected to be paid out in November.

During the IMF team's visit to Bangladesh from April 25 to May 7, the country emphasized a more flexible exchange rate and changes to banks' lending rates.

Beginning in July, banks will be able to set lending rates that are no more than 3% higher than the weighted average rates for Treasury bills over the previous six months. The IMF's crucial condition of the rate corridor takes the place of the 9% lending rate cap. 

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