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IMF agrees on USD 4.5b loan to Bangladesh; First installment due in Feb next: Finance minister

November 9, 2022

· The International Monetary Fund (IMF) has agreed to lend Bangladesh USD 4.5 billion in loans in seven installments, says Finance Minister AHM Mustafa Kamal.

· "The amount will be disbursed in seven installments till December 2026. The first installment, USD 447.78 million, of the loan will be cleared in February next year. The rest will be USD 659.18 million each."

· "Interest rate of the loan will depend on the market rate at the time of maturity. The finance ministry has calculated that the rate would be around 2.2%.

· As per an IMF press release issued in this regard, "IMF staff and the Bangladesh authorities have reached a staff-level agreement to support Bangladesh's economic policies with a 42-month arrangement of about USD 3.2 billion under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) as well as of about USD 1.3 billion under the Resilience and Sustainability Facility (RSF).

· ECF's grace period is 5.5 years and the payment period is 10 years. EFF's grace period is 3.5 years and its payment period is also 10 years.

· Meanwhile, the grace period for RSF is 10 years and the payment period is 20 years.

From: https://www.tbsnews.net/economy/imf-agrees-45b-loan-bangladesh-first-instalment-due-feb-next-finance-minister-528658

https://today.thefinancialexpress.com.bd/first-page/imf-agrees-to-lend-bd-45b-1668015315

Govt bank borrowing surges around BDT 6,000cr in October

November 8, 2022

· Government borrowing from the banking sector and savings tools increased by BDT 5,796 crore in October, according to central bank data, as the government's domestic borrowing from the banking sector escalated to BDT 18,323 crore at the end of the first four months of the current fiscal year.

· Government borrowing from the banking sector stood at BDT 2,88,508 crore at the end of October, according to Bangladesh Bank data. It shows government borrowing from the banking sector decreased in October compared to the previous month.

· The banking sector lent around BDT 15,000 crore to the government in September as the loan portfolio reached BDT 282,712 crore at the end of that month.

· For the current fiscal year, the government's bank borrowing target is BDT 106,334 crore to meet the budget deficit. At the end of October, the government had borrowed 17.23% of the target from the banking sector.

· In the last one year, the central bank accounted for 84% of the loans taken by the government, while commercial banks provided the remaining 16%.

· According to central bank data, the government borrowed BDT 76,380 crore from the banking sector in the last one year from October 2021. Of it, BDT 64,185 crore came from the central bank and BDT 12,195 crore from the commercial banks.

From: https://www.tbsnews.net/economy/banking/govt-bank-borrowing-surges-around-tk6000cr-october-528394

Check evasions, raise tax-GDP ratio to 9.6pc, suggests IMF

November 10, 2022

· As a detailed report on the revenue front was placed before an International Monetary Fund (IMF) mission reviewing Bangladesh's creditworthiness, the Fund spelt out a course of dos to the National Board of Revenue (NBR), including raising the tax-GDP ratio-billed one of the lowest by even regional standards for reasons like evasions and window-dressing of financials.

· The income-tax wing of the revenue board showed data on ratio of its types of taxpayers where 29% constitute salaried taxpayers, 3.0% corporate, 1.0% firms.

· Other individuals like contractors, businessmen, entrepreneurs and non-salaried individuals constitute 67% of the total taxpayers.

· The income-tax-policy wing prepared the report for its recent meeting with the IMF, as the Fund mission rummaged through entire financial records of the country in spot assessment pending a 44.5-billion loan the government has sought for budgetary support at this hour a global crunch.

From: https://today.thefinancialexpress.com.bd/first-page/check-evasions-raise-tax-gdp-ratio-to-96pc-suggests-imf-1668015534

BB sells USD 5.47b from reserve in 4 months

November 10, 2022

· The Bangladesh Bank has sold record USD 5.47 billion to banks since July of the current financial year due to a severe dollar crisis that hampered letter of credit payment obligation settlement.

· On Wednesday, the foreign reserve dropped to USD 34.25 billion after the BB sold USD 60 million at BDT 97 each.

· According to the suggestion of the International Monetary Fund, if USD 8 billion used as export development fund is excluded from the foreign exchange reserve, the reserve stands at USD 26.3 billion. It is the lowest in seven years.

· In addition to dollar sales, the reserve fell such a level as the BB on November 7 paid import bills worth USD 1.32 billion to the Asian Clearing Union for the month of September and October.

· The ACU payment is made at a two-month interval.

From: https://www.newagebd.net/article/186010/bb-sells-547b-from-reserve-in-4-months