The second installment of IMF credit hangs in the balance as the government will not be able to meet the condition of demutualising bourses by December this year.

According to the government roadmap, the two stock exchanges of the country will be demutualised by June next year.

The global lender has provided Bangladesh with Extended Credit Facility (ECF) fund in a bid to help the country keep its foreign currency reserve stable and introduce financial reforms.

A Banking Division official Saturday said: “We have failed to reach a consensus on demutualisation of two bourses with the visiting IMF officials, as it is set for June 2013 as per road map.”

International Monetary Fund (IMF) approved $987 million ECF on some conditions including the demutualisation of Dhaka and Chittagong stock exchanges by December 2012.

In the second tranche, IMF is supposed to release $141 million.

A Bangladesh Bank official, however, said the government has already met all but four conditions which will also be “addressed shortly”.

“The government could be able to convince IMF about the matter,” he hoped.

The official also expressed his confidence that the second installment of ECF will be available once the IMF approves the loan at its board meeting to be held on 27 and 28 this month.

IMF team is now in Dhaka to see whether the condition of fuel price adjustment has been met. It will leave the city on Thursday.

Besides, another IMF team related with first tranche is set to arrive in Dhaka on Wednesday and stay till 26th of this month. During the visit, it will examine the fulfilling of 16 conditions.

A top official of the banking division said they were able to convince the visiting IMF officials about the deadline of submitting the amended Banking Companies Act to parliament.

“The amended Banking Companies Act and VAT Act will be passed at the current parliament session”, he added.

Earlier, the government agreed to increase fuel oil prices anytime soon to meet a condition tagged by the IMF to release the second tranche of ECF to Bangladesh. Fuel prices will be raised as per automatic price adjustment process as per the conditions.

The IMF approved loan for Bangladesh under its ECF scheme to help the country overcome its macroeconomic pressure.

Then, the government immediately received first tranche amounting to $141 million in April this year. The rest of the money will be given in six equal installments upon showing solid progress in fulfilling the prescribed reform measures.

News: The Daily Sun/Bangladesh/09-Sep-12