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Dhaka Tribune

Dhaka wants expedited budgetary support from World Bank

World Bank first wants to know about Bangladesh's current economic situation, especially the state of forex reserve and inflation

Update : 20 Sep 2022, 05:15 PM

The government on Monday requested an expedited confirmation of a World Bank-pledged loan worth $1 billion for budget support and more funding to navigate economic headwinds blowing from global volatility.

At a meeting with visiting World Bank vice president for South Asia Martin Raiser in Dhaka, government officials made the request to the global development financier, officials said.

Martin, newly appointed VP for South Asia Department in the WB, is now in Dhaka for a three-day introductory visit to Bangladesh until Wednesday.

Economic Relations Division (ERD) Secretary Sharifa Khan at the discussion placed the request with the visiting World Bank high official for confirming the budgetary support as the funding was sought a few months back.

Finance Minister AHM Mustafa Kamal earlier had sought the budget support from the WB when the impact of the Covid-19 pandemic began to be felt on the national economy.

Finance Secretary Fatima Yasmin and Principal Secretary to the Prime Minister Ahmed Kaikaus also attended the meeting with the global lender's vice-president.

The newly appointed VP also called on the finance minister on Tuesday and discussed possible economic cooperation on a larger scale.

The WB executive would also meet private-sector and civil-society representatives, think-tanks and development partners working in Bangladesh on his final day in Dhaka Wednesday.

Raiser took over the vice presidency of the World Bank in July earlier this year.

Before taking on this role, he had worked as the country director for China, Mongolia, and director of Korea, and as country director for Brazil and Turkey, separately.

World Bank wants info on forex reserves

The World Bank has sought to know about Bangladesh's current economic situation, especially the state of forex reserve and inflation, ahead of providing budgetary support. 

"They wanted to know especially what we think about our foreign exchange reserves, whether the reserves will increase or decrease. Moreover, they want to know about the overall state of the macroeconomy," said State Minister for Planning Shamsul Alam.

The delegation also wanted to know the reasons behind the reserves falling below $48 billion and how Bangladesh can raise it, he said.

Besides, they wanted to know about the current status of inflation and steps taken to control it, he said.

Responding to the queries, Alam stated to have said, "We are facing challenges. But our situation is better than other South Asian countries."

"Our inflation has not increased as much as it was supposed to increase following the international market," he said.

"Since July our overall condition is good, because exports have increased by 25.31% in the last two months since July. On the other hand, imports increased by 23 per cent," he said.

Remittance flow through official channels has also increased, he said, adding, "We have been receiving remittances of $2 billion per month for the last two months. We have never had $2 billion together in a month in the past."

"As exports are increasing, remittances are increasing and as we have been able to reduce import costs drastically, the overall performance of our economy is now in a relaxed state," the state minister said to have told the delegation.

On the meeting's talking points, Alam said they had also informed that Bangladesh has already reduced the value of the local taka several times to keep the exchange rate stable. "Now our economic situation is stable," he added. 

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