Staff Correspondent:
The International Monetary Fund would be watching the Bangladesh economy like a hawk, stipulating an extensive list of data reporting regularly as part of the conditions agreed upon for the $4.7 billion loan programme.
The rigorous data reporting requirement would inform the Washington-based lender how the government is faring with the programme objectives of restoring macroeconomic stability, accelerating overdue reforms and tackling climate change challenges.
To that end, the central bank would have to send 13 reports daily, three reports weekly and 21 reports monthly. The finance ministry would have to send 20 reports monthly and three quarterly reports.
Each month, the National Board of Revenue, the Export Promotion Bureau and the Bureau of Manpower, Employment and Training would have to send one report each, the Bangladesh Petroleum Corporation three reports and the Bangladesh Bureau of Statistics two reports.
The reports inform on the status of the two quantitative performance criteria (QPCs), the four indicative targets (ITs) and the 13 structural benchmarks.
QPCs are specific, measurable targets that must be met, while the ITs are similar to QPCs in that those are quantitative indicators to assess progress in meeting a programme’s objectives.
The structural benchmarks are reform measures that often are non-quantifiable but are critical for achieving programme goals and are intended as markers to assess programme implementation.
Should the government fail to meet the periodic targets, the successive tranches of the loan would not be authorised.
“The best available data will be submitted, so that any subsequent data revisions will not lead to a breach of QPC or benchmarks,” the IMF said in the technical memorandum of understanding.
For Bangladesh, the QPCs are a floor on net international reserves (NIR) and a ceiling of 3.3 percent of GDP on the budget deficit.
The ITs are: ceiling on reserve money and floors on tax revenue, priority social spending that comprises all expenditures on education, health, and social safety nets and capital investment that comprises all Annual Development Programme (ADP) expenditures in the budget.
As per the QPC set for June and December, Bangladesh’s NIR cannot be below $22.9 billion in March, $24.5 billion in June, $25.3 billion in September and $26.8 billion in December.
For programme monitoring purposes, the NIR is defined as gross international reserves (GIR) minus reserve-related liabilities.
As per the lender’s balance of payments and investment position manual (BPM6), gross foreign reserves calculation does not include the various funds that the Bangladesh Bank has formed from the reserves as well as the loan guarantees provided for Biman, the currency swap with Sri Lanka, the loan to Payra Port Authority and the below-investment-grade securities.
For continuous monitoring of the QPC, BB would have to send daily reports of stock of GIR, detailed data on the composition of GIR including currency composition, stock of NIR, sales and purchases of foreign exchange by BB, exchange rate, foreign exchange interbank market, among others.
Monthly reports on projections of daily individual oil-related payments by commercial banks, actual and six-month projections on short-term external financing and repayment, and actual and six-month projections on deferred payments for oil imports would inform on the status of the QPC.
The other QPC would be monitored by monthly reports on fiscal outturn including financing of the overall fiscal balance, breakdown of subsidies by main categories, recurrent and extraordinary expenditures, domestic financing and foreign financing.
BB would have to send daily reports of the stock of reserve money and its components to ensure it does not breach the ceiling set as an IT.
The NBR would have to send reports of its monthly collections by type of tax and subheadings as a monitoring mechanism for another IT.
For the other two ITs’ monitoring, the finance ministry would have to send a quarterly report on social spending and a monthly report on ADP expenditure.
The other reports pertain to the progress made on the SBs, inform on the health of the banking sector and keeping a close watch on BPC’s expenditure.

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