International Monetary Fund has expressed concern over the increase in government borrowing from the banking system. The IMF suggested policy actions on both the macroeconomic and structural fronts in light of a recent weakening in the global economic environment and rapid rise in oil imports and subsidy costs.

The suggestion came during a series of meetings with Bangladesh’s government functionaries when a mission from the international lender visited Dhaka on a 14-day visit, according to a press rfelease.

The IMF team noted that well-coordinated policy adjustments were needed to mitigate balance of payments, fiscal and inflation pressures and contain macro-financial risks faced by Bangladesh.

The mission met with Prime Minister Sheikh Hasina, her economic and energy advisers, the minister of finance, finance secretary, Bangladesh Bank governor and other senior officials, as well as private sector, development partner and civil society representatives.

The talks focused on policy moves to engender moderate monetary and fiscal tightening, backed by greater exchange rate and interest rate flexibility.

Source: The Independent/ Bangladesh/ 16th Dec 2011