Staff Reporter:
Finance Adviser Dr Salehuddin Ahmed yesterday said that discussions are ongoing with various interna-tional development partners, including the IMF, ADB, IDB, and the World Bank for availing support in various sectors in line with the country’s demands.
“Currently, two agreements are expected to be signed soon with the World Bank, while the rest are pro-gressing as usual under ongoing commitments,” he said.
The Finance Adviser further noted that the future negotiations would focus on demonstrating progress under the IMF pipeline and outlining the government’s future plans.
“After the new government takes office, it will take major decisions regarding future borrowings and project implementation,” he added.
The Finance Adviser was responding to the queries of reporters after chairing a meeting on the Advisers Council Committee on Government Purchase at the Bangladesh Secretariat yesterday.
When asked about his upcoming visit to the World Bank and IMF annual meetings, he said that the gov-ernment has already exceeded the set ceiling by the International Monetary Fund (IMF) in external bor-rowings.
But, he said, development partners’ concerns over debt sustainability are understandable and rooted in ensuring prudent financial management.
“We have already exceeded the ceiling as around $4 billion additional fund has been used. But, overall, we have shown progress,” Dr Salehuddin said.
When asked about the reason behind the borrowing ceiling, the Adviser explained that the limit was in-troduced to maintain the country’s debt sustainability and repayment capacity.
“The rationale behind the ceiling is that our development partners want to make sure we don’t become overambitious and undertake projects beyond our repayment ability. If borrowings grow too rapidly, then there’s a risk of inefficiency and wastage. So, their concern is quite genuine,” he said.
The IMF has for the first time set a maximum US$ 8.44 billion ceiling of foreign borrowing for Bang-ladesh. The global lender sets the external borrowing limit for the fiscal year 2025-26.
The new condition was revealed in the IMF’s ‘Bangladesh Country Report,’ published recently after the approval and release of the fourth and fifth tranches of the loan, totaling $1.34 billion.
This new limit is a key benchmark Bangladesh must meet to secure subsequent loan installments.
The report stipulates quarterly ceilings to monitor the country’s debt management closely. A maximum of $1.91 billion in external borrowing in the first three months, $3.34 billion by the six-month mark, $4.34 billion after nine months, and the overall limit of $8.44 billion for the full fiscal year.
This borrowing limit was not part of the original $4.7 billion IMF loan program approved in 2023.
The limit was set based on the IMF’s latest Debt Sustainability Analysis (DSA).
According to the DSA, the debt-to-export ratio soared to 162.7 percent in the FY2023-24, significantly surpassing the projected 116-118 percent range.
