ADB signals budget-support credit to BD

A signal comes from the Asian Development Bank (ADB) about considering 'letter of comfort' from the IMF to extend budget-support finance to Bangladesh.

ADB Vice President Yingming Yang gave the indication in a meeting with Finance Adviser of the interim government Dr Salehuddin Ahmed Sunday on the sidelines of the 58th ADB annual meeting in the Italian city.

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

The Finance Adviser said as the IMF does due diligence on macroeconomic issues, so it's a positive signal that is important for budget support of ADB.

"Scope of 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 the ADB found it has limited scope as other countries are also demanding the same, he added.

"Still, the ADB high-ups have assured us of considering the proposal," he said, adding, "We told the ADB that our negotiation with IMF going on and about to reach in a decision."

The ADB wants Bangladesh to sort out the IMF issues. "We won't rush to signing agreement accepting IMF's loan conditions," said the finance adviser.

He notes that Bangladesh's economic condition has improved in the last four months, and its banking fundamentals and private sector have improved.

"The ADB wants to support for our infrastructural development besides budget support," he said.

It also wants to help Bangladesh 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 unavailability of budget support from the IMF.

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