IMF loan ceiling will not put pressure on Bangladesh: Salehuddin
'We are being very cautious about taking foreign loans this year. No budget-support loans will be taken,' said the adviser
Finance Adviser Dr Salehuddin Ahmed has said that the loan ceiling set by the International Monetary Fund (IMF) will not create any pressure on Bangladesh.
Speaking at his office in the Ministry of Finance today (30 September), he told The Business Standard that the government has already cleared $5 billion in foreign debts and outstanding bills since assuming responsibility, while reserves have risen to over $30 billion.
"We are being very cautious about taking foreign loans this year. No budget-support loans will be taken," he said.
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The adviser emphasised stronger revenue collection, noting that letters have been issued to tax evaders and corruption has reduced, boosting tax receipts.
He added that during the IMF's upcoming October board meeting, Bangladesh will not seek any additional loans from the IMF, World Bank, or ADB.
Although China's New Development Bank has shown interest in providing loans, Bangladesh has declined for now, he said.
Salehuddin pointed out that excessive foreign borrowing could create a burden for the next government. Despite the IMF setting a loan ceiling of $1.91 billion for the first quarter of the current fiscal year, Bangladesh has drawn only about $300 million.
He further noted that budget-support loans often come with conditions that limit a country's ability to make independent policy decisions.
Extortion increased since 5 August
He said that extortion has risen across the country since 5 August, and the interim government has failed to bring it under control.
Speaking at his office in the Ministry of Finance today (30 September), he stated that without political commitment and an elected government, controlling extortion is not possible.
"For example if Tk1 was extorted earlier, now Tk1.5-Tk2 is being taken. Since 5 August, various groups have become involved in extortion, including those who were not previously engaged. Even members of business associations are involved," he said.
He added that extortion is driving up commodity prices, but tackling the issue is not the responsibility of his ministry. "The interim government is not following a 'catch this person, catch that person' approach," he remarked.
Despite these challenges, Salehuddin expressed optimism that inflation will come down to 7% by June next year.
