IMF has sanctioned $278.8 million aid to Bangladesh

                                        The important global economic body International Monetary Fund, mostly known as IMF, has sanctioned a huge financial aid of $278.8 million to Bangladesh. That’s not all; eventually the IMF has also approved the request of Bangladesh for a waiver for non-observance of the performance criterion on new non-concessional external debt, which is maturing in more than a year.

                                            The above information has been accumulated from a press release, which has came out after the IMF Executive Board meeting, which was held on 20^th February of this year.

                                            The honorable Deputy Managing Director and Acting Chair of the IMF, Mr. Naoyuki Shinohara said a few things about this aid approval. He showed some key lights on this matter, which is essential considering the present scenario of Bangladesh in the global economy market.

                                          The following is an exception of what Mr. Naoyuki Shinohara quoted in the press release,

 “Macroeconomic pressures have eased in Bangladesh, aided by stabilization measures aimed at containing government borrowing, reducing the inflation rate, and building foreign reserves. While the global economic situation remains fragile, Bangladesh's economy continues to show resilience, with growth this fiscal year expected to slow only moderately.

 However, risks remain to the downside, mainly arising from a slowdown of exports to mature markets, spike in world commodity prices, further deterioration in state bank finances, and election-year uncertainty."

                                                      He carried forward the matter by stating that the fiscal policy has remained broadly on track for Bangladesh, but the tax collections were very much underperformed. In fact the country had seen quite a slowdown of bilateral trades too in the last few years. According to Mr. Shinohara what the mentioned country required is some upfront actions to broaden the tax base and strengthen enforcement.

                                                    In his article the IMF official added, “"Continued vigilance is needed to contain energy and fertilizer related outlays, while improving the reach of safety nets, all with a view to create more space for growth critical development spending”

                                                   He concluded that the monetary policy of various leading Bangladesh Bank’s has helped a lot to cut down inflationary pressure and credit growth. This is the one of the first essential things that need to be done in order to carry forward the journey of road to glory.

                                                        As per Mr. Shinohara Policy effectiveness can be easily enhanced by continued exchange rate and interest rate flexibility. He stated that the country should set up macroeconomic and financial stability first in order to carry on the ongoing development process.

                                                      You may like to know about the IMF’s prediction on India’s FY13 growth rate. Eventually IMF has lowered India’s growth rate to 5.4% for FY13, which is quite low in deed.

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