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After spot checks of the country's current situations, the International Monetary Fund (IMF) says it will assist Bangladesh in conducting necessary reforms and policy adjustments to navigate emerging headwinds on the economic front.
"We support the authorities' efforts to initiate policy adjustments, including continued monetary tightening and rationalising non-priority capital spending, in response to these challenging circumstances," the IMF said Monday in a statement capping its staff mission's exhaustive consultations on the Fund's lending programme.
Led by Chris Papageorgiou, the IMF Mission Chief for Bangladesh, the team visited Dhaka on September 24-30 discussing recent developments and the government's reform priorities.
The current interim government of Bangladesh sought an additional $3.0 billion worth of assistance from the IMF in addition to the ongoing $4.7 -billion loan programme that was granted to help restore macroeconomic stability, particularly to prop up foreign-exchange reserves on fast decline during the past regime. The team visited Dhaka, according to officials concerned, to assess the macroeconomic situation of the country and the possible financial needs.
Expressing sorrow over the loss of lives and injuries during the recent public uprising, the IMF said it "stands in solidarity with the people of Bangladesh during these difficult times".
"The timely formation of an interim government has helped stabilise political and security conditions, fostering a gradual return to normalcy in the economy," the IMF says on a positive note on the country's post-uprising situation.
The Fund points out that, nonetheless, economic activity has slowed markedly, while inflation remains at double-digit levels, owing to the recent turbulence and major floods.
"The deterioration in the balance of payments has put additional pressure on foreign-exchange reserves," says the multilateral lender, headquartered in Washington.
It further says concurrently the tax -revenue collection has declined, while spending pressures have increased, and domestic payment arrears have accumulated. "Financial -sector vulnerabilities have become more pronounced."
Notwithstanding the headwinds, the IMF remains a "steadfast partner, fully committed to supporting Bangladesh and its people," said Mr Papageorgiou, the mission chief.
He committed that within the framework of the ongoing IMF-supported programme, "we will continue to work closely with the authorities to advance Bangladesh's reform agenda, which aims to ensure macroeconomic stability, promote job creation, strengthen institutions, and foster strong, sustainable, and equitable growth".
"We welcome the authorities' renewed commitment to implementing the reforms under the IMF-supported programme," the statement said, adding that further discussions on how to proceed with programme reviews will continue during the upcoming 2024 IMF-World Bank Annual Meetings in Washington, D.C.