The International Monetary Fund (IMF) has suggested for Bangladesh to phase out caps on the lending and borrowing rates to strengthen monetary transmission which it termed as the lifeblood in the economic-recovery process. According to media reports on Monday, the IMF also suggested greater exchange rate flexibility along with safeguarding foreign exchange reserves since it will help buffer external shocks. The lending rate cap on banks came into force from April 2020 and the central bank tagged borrowing rate with inflation in August 2021. The Washington-based multilateral lender suggested the government should widen its tax to GDP ratio, ensure exchange rate flexibility and strengthen the business-friendly environment to attract foreign direct investment (FDI).
The IMF made its suggestions during a briefing at a city hotel yesterday after wrapping up several meetings with different government entities and representatives of businesses, banks and labour unions. According to the IMF economists, who visited Bangladesh between December 5 and December 19, exports are a major engine of driving growth in Bangladesh but it’s time to diversify exports. However a sizable amount of foreign exchange earned through exports is remitted from Bangladesh to
neighbouring countries, particularly India as more than half a million Indian nationals are on employment here, some of them with work permits and some others without permits. A study conducted by the Refugee and Migratory Movements Research Unit (RMMRU) in 2019 revealed that there are 500,000 Indians working in the country. Indians remit $4b a year from Bangladesh.
In the garment sector highly paid positions are held by Indians, the reason being we do not have specialists. It is unbelievable that over the last fifty years we have not been able to develop skilled people. Money laundering is suspected, why so many Indians have jobs in Bangladesh. There is no investment of India in Bangladesh.
Finding us corrupt and incompetent everybody is defrauding Bangladesh. Dishonest people are available everywhere including IMF and World Bank for distorting figures. We have experts, though not honest yet, we must try to use them. We do not want to live with the reputation of being a looters’ country.
