Online Desk: Foreign-exchange-reserve red mark for Bangladesh until December may be lowered by the International Monterey Fund (IMF) as the visiting Fund mission and finance officials Tuesday discussed a lowered target in the current context of volatility.

Central bank officials also joined the finance ministry officials at the meeting, held at the Bangladesh secretariat, in the mission’s last-ditch effort in loan negotiations ahead of release of the next tranche of the agreed $4.7-billion credit.

A finance ministry official who attended the meeting said the IMF team considered lessening the forex-reserve target in response to central bank’s plea, as the country is struggling to maintain the required reserve position despite various measures taken.

Also, the central bank’s argument on maintaining forex reserves totalling import bills for three months, as maintained by many countries when in shortage of foreign currency, has been taken into consideration by the IMF team which is reviewing performance of Bangladesh before releasing the second tranche of $4.7 billion worth of loan.

As part of reform measures under the credit programme, which the IMF extended to Bangladesh in January this year, the country will have to maintain net foreign- currency reserves of at least $26.81 billion in December next, which the central bank officials found to be not achievable.

Bangladesh Bank officials last week requested the IMF team to lower the target below $20 billion as monthly import bills have been lowered to around $6.0 billion, following restrictions on non-essential imports amid dollar dearth.

According to multiple sources, on Tuesday the IMF-team members shared their findings with the finance-division officials and verified them before including those in the staff report.

The report will be finalised today (Wednesday) at another joint meeting at the MoF, which finally the team will place before the IMF board for consideration for releasing second tranche of loan.

Officials wishing not to be quoted by name said the IMF team also agreed a government plea to deffer the timeline for adoption of a periodic formula-based price- adjustment mechanism for petroleum products, which was set to start in December.

“The government wants to introduce the mechanism after the next national elections,” one of the sources said.

The IMF team reviewed the performance until June where the government failed to achieve two conditions out of six. The two conditions were: keeping net forex reserves at least $24.26 billion and realising Tk 3.45 trillion in revenue in the fiscal year 2022-23.

However, data show that until June last, the net forex reserves were nearly $21 billion while the National Board of Revenue could log Tk 3.25 trillion against the target.

Sources said the government is now making commitment to implement the tough conditions after the forthcoming crucial general election.