Bangladesh Bank Governor Abdur Rouf Talukder had quite a busy schedule over the weekend as he sat with top officials of both the International Monetary Fund, or the IMF, and World Bank, or the WB, in back-to-back meetings to discuss Dhaka’s request to get $5.5 billion in total in loans in the next three years, bdnews24.com reports.
The governor is currently in Washington, DC and had these meetings on the sidelines of the week-long annual joint summit of the two most influential global lenders. He is leading the Bangladesh delegation instead of Finance Minister AHM Mustafa Kamal.
While speaking to reporters after the meetings, Abdur Rouf said he met an IMF vice-president to discuss at length the country’s request to get $4.5 billion over the next three years.
According to Dhaka’s proposed credit request schedule, Bangladesh has requested $1.5 billion a year for the next three fiscal years under the global lender’s Resilience and Sustainability Trust, or RST.
Sources said the governor sought to iron out the details on behalf of the government before official negotiations begin in Dhaka this week with an IMF delegation.
Anne-Marie Gulde, deputy director of the Asia and Pacific Department at the IMF, said the global lender is ready to start negotiations with Dhaka,
“We are preparing for initial negotiations with Bangladesh, scheduled to kick off next week,” she said at a briefing on Sunday.
Member countries have access to loans from the IMF under three programmes- Extended Credit Facilities, or ECF, Extended Fund Facility, or EFF and RST to address climate change impacts. IMF rules dictate borrowing under any scheme that requires member countries to also borrow under ECF and EFF.
Reuters earlier reported Bangladesh will need a regular IMF-supported programme such as a stand-by agreement or an extended fund facility to be able to get this new type of financing. RST funds are capped at 150 per cent of a country's quota or, in Bangladesh's case, the maximum of $1 billion.
According to Rouf, who was the top official at the Ministry of Finance before taking up the new position of the central bank governor in July, Bangladesh can take up to $7 billion in loans in total from the IMF facilities.
He said Bangladesh sought loans for budget support to get the funds quickly because the IMF clears these funds at a time while funds for projects are cleared gradually. Rouf believes the loans from the IMF will help Bangladesh tackle the ongoing shortage of dollars.
MEETING WITH WORLD BANK
In the meeting with the World Bank, Rouf said Dhaka made an additional $750 million credit request from the top global development cooperation agency, along with the $250 million it already requested in the form of budget support.
The additional $750 million loan was asked under a programme known as Green Resilience Inclusive Development or GRID.
“We have discussed this total loan of $1 billion,” he said.