Bangladesh has achieved significant improvement in macroeconomic performance, observed the International Monetary Fund (IMF).
“Bangladesh was a country that proactively showed the IMF support for the country’s home-grown programmes, which have two components--one is macroeconomic stability and the other is addressing the longer-term structural issues related to climate change. On macroeconomic performance, so far there have been significant improvements," said Krishna Srinivasan, the director of the Asia and Pacific department of the IMF, during a virtual briefing from Singapore on Tuesday.
He made the remarks in response to a question at the briefing on the regional economic outlook for Asia and the Pacific.
Krishna Srinivasan said there have been improvements in the monetary policy framework and fiscal performance. "I think where Bangladesh was struggling was with the current account, which was just balanced partly because there was restraint on imports," he added.
He said the financial account was not performing very well.
"So, in some sense, you could see the depletion in the foreign exchange
reserve, and the taka was coming under pressure," he mentioned.
He said Bangladesh should allow greater flexibility in its exchange rate to address issues in its external account, particularly the deficit in the financial account.
"Once you implement this, you will see a greater sense of stability returning to the external account," he added.
Srinivasan said that with reforms in the exchange rate and improvements in fiscal policy, Bangladesh should see a more sustained recovery from the crisis that every country in the region has faced due to multiple shocks.
