The visiting International Monetary Fund mission has expressed concern over delays in introducing the proposed crawling peg for determining the exchange rate.
It also expressed concern over the lower than expected revenue generation trend during a meeting with ministry of finance officials at the Secretariat on Wednesday, said officials attending the meeting.
This was the first day of the fortnight-long mission led by Chris Papageorgiou to review the targets in connection with the $4.7 billion loan programme.
The local side, however, is in good position to ensure the release of next tranche worth around $690 million since the revenue target has been achieved.
Besides, the target of net international target missed slightly.
Still, the delay in introducing the proposed crawling peg and the slow growth in revenue may hamper the planned reform on different sectors, including the banking sector.
Revenue growth by 0.5 per cent of the GDP is one of the major conditions of the programme that will run up to May 2026.聽聽聽聽
The government sought the IMF loan to tackle the shortage of foreign currencies as well as downturns in the overall economic activities.
In January 2023, the IMF had released the opening tranche worth $476 million after the government agreed to carry out economic reforms.
The international lender disbursed the second instalment, officially known as the 鈥榝irst tranche鈥�, worth $690 million in December 2023 although both the revenue and forex reserves fell short of the targets.
The crawling peg is a system of an exchange rate regime where a country鈥檚 currency is pegged to another currency or a basket of currencies and the exchange rate is allowed to fluctuate within a certain range or at a predetermined pace.
The Bangladesh Bank in a monetary policy statement on January 17 said that the crawling peg system would be linked to a carefully selected basket of currencies within a predefined exchange rate corridor.
The system was supposed to introduce this March.
BB spokesman Md Mezbaul Haque on Wednesday said that they are still working with the issue.
The IMF officials also enquired about the 鈥楽ix Months Moving Average Rate of Treasury鈥� for fixing the interest rate for lending after the controversial policy of 9 per cent rate was changed since July 1, 2023.
It asked the ministry of finance to prepare the national budget for FY25 in line with the criteria of the programme.
The IMF mission reminded the ministry officials to bring down the budget deficit to 4.6 per cent in the new budget.