Decisive meeting to be held todayGovt gives way to most of the IMF strings, except raising oil prices further: Official

The government gives way to most of the International Monetary Fund strings to secure $4.5 billion credit that the government is propagating as “budget support.”

But the IMF's main conditions---increasing oil prices and trimming subsidies---have already been accepted. Some other conditions will be met in stages for which the government has sought time, an official of the finance division, said.

Sources in the finance division who were involved with IMF discussion said a number of decisions have been made by higher levels of the government regarding the IMF terms. These have already been communicated to the IMF.

The government however told the lending agency that they will not raise the prices of fuel oil, gas and electricity, further, at this point.

Modernisation in the GDP calculation system will be implemented soon. But it will take time to get tangible, officials said.

The net calculation of foreign exchange reserves is being done, but it will not be disclosed now. This matter will be revealed in due time. The interest rate cap will be lifted in phases, policy on defaulted loans will be done in accordance with the international norms. The process of increasing the tax-GDP ratio will continue.

Among the toughest decisions, subsidies in various sectors will be trimmed gradually. These decisions of the government have already been conveyed to the visiting IMF delegation.

A decisive meeting will be held at the Ministry of Finance on Wednesday regarding the loan. It will be attended by Finance Minister AHM Mustafa Kamal and some other senior officials.

In that meeting, Bangladesh's position regarding IMF’s preconditions would be officially informed to the lending agency.

This meeting would conclude the IMF's two-week visit to Bangladesh.

The government has sought a $4.5 billion loan from the IMF to deal with the impact of the global recession and the domestic situation.

The IMF mission came to Dhaka on October 26 to discuss the loan. They have already discussed various ministries and agencies of the government.

Based on the discussions at the highest level of the government, it has been decided that the price of oil, gas and electricity will not be increased as per the conditions of the IMF. Because their prices have already been increased.

However, according to the conditions of the IMF, the government will create the infrastructure to increase or decrease the prices of these products in the domestic market by coordinating with the international market. Later these prices will be adjusted with the international market.

According to sources in the finance division, the government has implemented its main conditions to get the IMF loan before the start of negotiations which is the price of fuel oil has been increased up to 52 percent. Fertilizer and gas prices have also been increased. Subsidy reduction was another condition set by the IMF. In these cases, the subsidy has been reduced by increasing the price.

In Wednesday’s meeting, the IMF will be informed that the subsidy for the current financial year will be kept limited as announced in the budget. They will also be told about gradual reduction in subsidy rates in sectors other than serving the poor.