REJAUL KARIM BYRON and AM JAHID

The Asian Development Bank (ADB) has become the first among multilateral and bilateral lenders to respond to the interim government’s call for budgetary support, approving $600 million aimed at easing pressure on foreign exchange reserves and accelerating economic recovery.

“ADB’s policy-based loan (PBL) promptly responds to Bangladesh’s immediate development financing needs following the political transition. The reforms target improvements in economic management and governance as well as economic diversification and competitiveness,” ADB Regional Lead Economist Aminur Rahman said after the loan was approved yesterday.

ADB’s programme was developed in close collaboration with the International Monetary Fund, World Bank, and other development partners, he said in a statement.

The interim government, which inherited high inflation and dwindling foreign currency reserves, has sought budgetary support from various development partners to stabilise the economy and bolster dollar reserves.

A finance ministry official said the ADB may disburse the $600 million by December.

Apart from this loan, the interim government sought an additional $1 billion from the ADB for banking sector reforms, the official said, adding that the government may get $500 million of that by June.

The loan will help Bangladesh introduce key policy actions with the aim of increasing domestic resource mobilisation while improving transparency and accountability, according to the ADB.

The PBL has a package of structural reforms supporting the mobilisation of domestic resources, efficiency of public investment projects,