Dhaka: The International Monetary Fund (IMF) will soon release the sixth and the last installment of $258.3 million fund under its three-year Extended Credit Facility (ECF) for Bangladesh.  

The IMF executive board on Wednesday decided to release the fund after completing the fifth and sixth reviews of Bangladesh's economic programme under the ECF, an IMF statement, made available here on Thursday, said.  

‘The Executive Board's decision enables the immediate disbursement of an amount equivalent to SDR (special drawing rights) 182.845 million (about $258.3 million) to Bangladesh, bringing total disbursements under the arrangement to SDR 639.96 million (about $904.2 million)’, the statement said.

The IMF on 11 April 2012, approved SDR 639.96 million (about $904.2 million) loan under the ECF for disbursing in six installments in the next three years to help Bangladesh maintain a comfortable balance of payment.  

The first installment amounting to $141 million was released on 25 April, after the approval of the soft loan. The ECF was, however, extended first to 31 July and then to 31 October 2015.  

With the release of the loan, the foreign exchange reserve, which is now over $27 billion, would get a further boost, a BB official told BSS.  

Following the IMF Board decision, Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair of IMF, in a statement, said prudent macroeconomic policies and structural reforms, with support from the ECF arrangement, have helped steer Bangladesh economy through domestic and global challenges in the last three and a half years.  

He said growth has been robust, with easing inflation, rising reserves stable public debt, authorities should maintain prudent fiscal and monetary policies to underpin sustained high growth against a challenging and uncertain global landscape and upside inflation risks.  

Emphasising structural reforms for unleashing the full potential of the economy, Furusawa also said many important reforms were adopted under the ECF arrangement, but key structural challenges remain such as low tax-to-GDP ratio.  

‘Boosting revenue is necessary to maintain fiscal sustainability and build fiscal space for public investment in critical infrastructure and stronger social safety nets,’ he said, suggesting that the authorities should steadfastly implement the new value-added tax (VAT) by July 2016, which would simplify tax administration and lower taxpayers' compliance costs, and would protect the poor and small businesses.  

Furusawa advocated reducing further 'inefficient and regressive energy subsidies', including by aligning domestic fuel prices with international prices, and strengthening financial management and reporting in state-owned enterprises, which would open up space to increase well-targeted social spending.  

‘Another important priority is to continue to strengthen the resilience of the banking sector. State-owned banks, in particular, should be reformed and guided by good corporate governance practices, supported by complete branch automation by 2016,’ he said.  

For boosting further inclusive growth, the IMF high-up recommended constant efforts for removing infrastructure bottlenecks, particularly in power and transportation, improving the business climate, and ensuring better labor rights and safer working conditions.