ADB may back Bangladesh budget with IMF nod

The Asian Development Bank (ADB) has signalled to consider a ‘letter of comfort’ from the International Monetary Fund (IMF) to extend budget support for Bangladesh, said Finance Adviser Dr Salehuddin Ahmed.

ADB Vice President Yingming Yang said this in a meeting with the finance adviser on Sunday at the 58th ADB annual meeting sideline events in Milan, Italy.

Talking to the FE, at the meeting premises, Dr Salehduddin said signing an agreement with the IMF may not be so important if the ADB gets a green signal from the IMF on the macroeconomic stability of Bangladesh.

The finance adviser said as the IMF does the due diligence on macroeconomic issues, its positive signal is important for budget support of the ADB.

“The scope of a soft landing has already been squeezed gradually as we have exhausted it,” he said.

Bangladesh has proposed to go for Ordinary Capital Resources (OCR), but ADB found it has limited scope as other countries are also demanding the same, he added.

Still, the ADB high-ups have assured us to consider the proposal, added Dr Salehuddin.

 “We told the ADB that our negotiation with the IMF is going on and about to reach a decision,” he added.

ADB wants Bangladesh to sort out the IMF issues, said the adviser.

“We won’t rush to signing an agreement accepting the IMF’s loan conditions,” said the finance adviser.

Bangladesh’s economic condition has improved in the last four months; its banking fundamentals and private sector have improved, he added.

ADB wants to support our infrastructural development besides budget support, the FA said.

It also wants to help us with reforms, banking and project support.

“We will be able to present a manageable, realistic budget,” he said, adding that the economy has the strength in case of non-availability of budget support from the IMF.

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