Bangladesh to make marketbased exchange rate: IMF
Staff Correspondent: International Monetary Fund (IMF) Asia and Pacific Region Director Krishna Srinivasan said, ‘Bangladesh is trying to unify market-based and currency exchange rates. This effort means having a peg of the US dollar against the taka. There are currently multiple rates against US dollar.
Srinivasan spoke about the currency exchange rate in an hour-long virtual press conference held on Thursday during the spring meeting of the World Bank and the IMF in the US capital Washington. In the press conference, Srinivasan was questioned about the fact that there are three types of currency exchange rates in Bangladesh. He said this while answering that question.
In the World Economic Outlook published on April 10, the IMF has forecast a gross domestic product (GDP) growth of 5.5 percent for the current fiscal year 2022-23 for Bangladesh.
In response to the question why the IMF made such a low estimate in the case of Bangladesh, Srinivasan said, ‘5.5 percent is not insignificant. In terms of GDP growth rate, Bangladesh is behind only India and Maldives in South Asia. He also mentioned that India’s GDP growth rate will be 5.9 percent instead of 6.1 percent.
Pointing out that the markets of the United States and Europe have slowed down, Srinivasan said, “This has created a kind of risk, which may affect the export market of Bangladesh.” However, the growth rate of Bangladesh will return to 6.5 percent in the fiscal year 2023-24. He mentioned that this has been said in the outlook.
Srinivasan believes that the economy of Bangladesh along with many other countries has been affected due to the Russia-Ukraine war. He said, “This war has put pressure on Bangladesh’s revenue sector and foreign exchange accounts. Bangladesh contacted the IMF at that time to start a loan program and the organization also responded to it.
Srinivasan said, “IMF approves the loan proposal of $4.7 billion and undertakes the program under it.” Reforms in several sectors were initiated under the programme, which are still ongoing. In the meantime, some progress has also been seen.
A team of IMF will visit Dhaka from April 25 to May 2. Three days after the IMF approved a $4.7 billion loan proposal on January 30, the first tranche disbursed $476,270,000. The entire amount of the loan will be paid in seven installments in three and a half years until 2026.
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