The six-member International Monetary Fund Article 4 mission led by Adviser to the Asia-Pacific Department Nissanke Weerasinghe had arrived here last week to evaluate and update information on Bangladesh economy. They met Finance Minister M Saifur Rahman at his Secretariat office yesterday.

"Pointing at the rising commodity prices right now, they wanted to know how we are going to deal with the more inflamed inflation that would follow the introduction of the new pay scale," Saifur told the press.

He said, "We told them we can minimise the adverse impact by implementing the pay scale in phases."

The mission members said the country's monetary management is on the right path, but it needs some tightening. "If there is too much monetary expansion, it will have negative impact on the inflation," Saifur quoted the IMF officials as remarking.

They suggested that the minister adopt a constrictive fiscal policy to maintain budgetary discipline. But Saifur told them the government intends to continue the present monetary policy for a while.

Though the IMF previously advocated cutting down interest rates, its officials yesterday advised the finance minister to the contrary, to scale them up.

The mission also expressed concerns at the poor revenue collection, especially by the customs. Saifur told them that the customs revenue is paltry as most of the imports fall in low-duty categories. Besides, a number of customs lawsuits have blocked realisation of a good amount of money in import duties.

He said, "We have initiated some steps which are expected to improve the revenue situation by the year end. Several customs cases meanwhile have also been settled, which means a substantial amount will be added to the import duty coffer."

The IMF team is scheduled to leave Dhaka on April 9, after collecting answers to some 50 questions sent to the government last month.