Meeting with IMF on number of reserves are underway- BB

Al Ehsan

The visiting IMF delegation started discussing the conditions and reserve accounting system regarding the loan application of 4.5 billion dollars with Bangladesh Bank (BB) from 9:30 am yesterday.

Central Bank Spokesperson and Executive Director Abul Kalam Azad briefed reporters after 2 pm on the meetings held before the midday break.

Answering a question, he said, “The discussion between the IMF and BB on the calculation of reserves has been fruitful.”

A few years ago, the IMF raised questions about BB’s regular disclosure of foreign currency reserves.

The international organization raised the question about the reserve account management system of Bangladesh.

As a reserve of any country, this international organization follows BOPIIPX (Balance of Payments and International Investment Position) system. According to that method, the actual usable funds of the reserve should be disclosed. But BB has formed the Export Development Fund (EDF) from the reserve with about 7.8 billion dollars.

Also, Bangladesh has given loans from the reserves to Biman, Pyara Sea Port and Sri Lanka in economic crisis. The amount of these is about 8.4 billion dollars, which is supposed to be separated from BB’s reserves as IMF says.

According to the data of Bangladesh Bank, the amount of reserves as of last Wednesday is 35.80 billion dollars.

According to the IMF’s calculation, if 8.4 billion dollars are removed from the reserve, the amount of the reserve is below 27.4 billion.

In 2016, the amount of money that lost from the reserve of Bangladesh Bank through hacking, Bangladesh Bank is still showing the unreturned money in the reserve.

In the list of debt negotiations with Bangladesh, the IMF wants to know whether the IMF’s ‘BOPIIP6’ accounting system has been followed in the management of reserve accounts.

After the IMF raised questions about Bangladesh’s reserve accounting system last year, a proposal to discuss it was raised to the board of directors of Bangladesh Bank at the beginning of this year.

But the board of Bangladesh Bank has not yet accepted the proposal of IMF. Bangladesh Bank is calculating the reserve according to the old rules.

In yesterday’s meeting, the IMF asked Bangladesh Bank to know the actual amount of reserves both net and gross.

For this, a power point presentation was given by Bangladesh Bank. The central bank has also constituted a technical committee to give that report who responded to questions from the IMF delegation.

Abul Kalam Azad said about the first day’s discussion, “Bangladesh Bank’s discussion will continue with the IMF mission. IMF loan amounting to 1.5 billion to 4.5 billion dollars can be confirmed within the next two weeks.

Further discussions with the development partner organization include various variables of Bangladesh’s macroeconomics, currency exchange rates and their impact on the next three fiscal years, updated information on recent monitoring policies, banking issues, interest rates, bad debts, balance of payments, Policy reform various challenges of the economy and various commercial banks.

Meanwhile, the governor held a closed-door meeting with Deputy Governor Ahmed Jamal, AKM Sajedur Rahman and Kazi Chaidur Rahman on the agenda of the meeting at Bangladesh Bank in the first hour.

On the other hand, the 10-member IMF delegation is led by Rahul Anand, head of the organization’s South Asia and Pacific region.

The 15-day tour, which began on Wednesday, will end on November 9. A meeting with the Governor of BB is scheduled to take place on the last day of the visit as per the schedule.

Bangladesh’s current account deficit is constantly increasing due to a large trade deficit. It has also put pressure on foreign exchange reserves. As a result, the value of the Bangladeshi taka is constantly decreasing against the dollar.

Industrial production is constantly decreasing as imports are reined in to maintain reserves. The economy of Bangladesh is facing fuel crisis due to its influence.

In such a context, the government is trying to get funding from foreign sources as well as domestic initiatives to save dollars. The government has also applied for a loan from the IMF to receive foreign exchange assistance.

Regarding the loan, BB Governor Abdur Rauf Talukder said on October 16 that the IMF has agreed to give the loan in response to Bangladesh’s request.

The governor said that Bangladesh can borrow up to 7 billion dollars according to the IMF quota. Out of that, 4.5 billion have been applied for as a loan. They will approve a loan of one and a half billion dollars in the first phase for the current financial year.##