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staff,” he wrote, referring to the IMF board meeting in Washington.
Additionally, the IMF executive board approved a modification of performance criteria and granted a waiver for the non-observance of the performance criterion related to the non-imposition and non-intensification of exchange restrictions, based on the temporary nature of the non-observance and the implementation of corrective measures.
Programme performance for the third and fourth reviews remains broadly satisfactory despite the difficult political and economic context, the IMF said in a statement after the meeting.
Bangladesh’s macroeconomic challenges have increased since the 2024 uprising, which led to the ouster of the previous government. The timely formation of an interim government has helped stabilise political and security conditions, fostering a gradual return to economic stability.
“However, the economic outlook has worsened due to persistent political uncertainty, continuation of tighter policy mix, rising trade barriers, and increasing stress in the banking sector,” the IMF said.
Near-term policies should prioritise rebuilding external resilience and reducing inflation, said Nigel Clarke, deputy managing director and acting chair of IMF, after the board meeting.
The authorities’ recent steps to implement a new exchange rate regime and include revenue-enhancing measures in the fiscal 2025-26 budget are “welcome”, Clarke said.
A balanced policy mix, anchored in maintaining a tight monetary policy stance, greater exchange rate flexibility and revenue-based fiscal consolidation, will support efforts to restore both external and internal balances.
Efforts to raise tax revenues and rationalise expenditures, including through subsidy reduction, are critical for creating the fiscal space needed to strengthen social, development and climate initiatives.
“Sustained structural reforms are essential for Bangladesh to achieve its goal of attaining upper middle-income status,” Clarke said.
“Key priorities include diversifying exports, attracting greater foreign direct investment, strengthening governance and enhancing data quality,” he added.
The board withheld approval earlier this year after Dhaka missed deadlines to fully liberalise its exchange rate and take concrete steps to overhaul the National Board of Revenue.
The breakthrough follows the recent adoption of a unified, market-based exchange rate and a government push to restructure tax administration as part of a broader effort to boost revenue collection.
S Korea gets first civilian defence minister in 60 years
AFP,
Seoul
South Korea’s government yesterday appointed the country’s first civilian defence minister in more than 60 years, after growing calls for stronger oversight of the military.
It comes after a failed martial law attempt in December that led to the impeachment of ex-president Yoon Suk Yeol.
Veteran lawmaker Ahn Gyu-back is “the first civilian to lead the ministry in 64 years”, said presidential Chief of Staff Kang Hoon-sik at a news conference yesterday.
“He is expected to push reforms in the military, particularly in response to its involvement in the martial law,” he added.
During his election campaign, President Lee Jae Myung had promised to appoint a defence minister from the “civilian circle,” responding to widespread public calls for control of the military in the wake of the martial law crisis.
South Korea’s former president Yoon was impeached and suspended by lawmakers over his December 3 attempt to subvert civilian rule, which saw armed soldiers deployed to parliament.
Kim Yong-hyun, who served as defence minister under Yoon, has been under arrest since December and is currently on trial for insurrection, accused of recommending martial law to the former president and drafting the decree.
Previous liberal administrations have attempted to appoint a “civilian” defence minister, but have failed to do so, many citing the growing threat of North Korea’s nuclear programme.
Ties between the two Koreas deteriorated under the hardline administration of the hawkish ex-president.
They technically remain at war because the 1950-53 conflict ended in an armistice, not a peace treaty.
Lee has vowed to improve relations with the North and reduce tensions on the peninsula, halting the loudspeaker broadcasts Seoul had begun last year in response to a barrage of trash-filled balloons flown southward by Pyongyang.
In response, a day after, North Korea stopped broadcasting strange and unsettling noises along the border which the ministry hailed as “a meaningful opportunity to ease inter-Korean military tensions and restore mutual trust.”