IMF approves $1.3b loan for Bangladesh
Staff Reporter :
The International Monetary Fund (IMF) has approved the disbursement of more than $1.3 billion to Bangladesh as part of the fourth and fifth tranches of the country’s $4.7 billion loan programme, signaling continued confidence in the nation’s reform commitments amid economic and political challenges.
The decision was made following the IMF Executive Board’s completion of the combined Third and Fourth Reviews under the Extended Credit Facility (ECF), the Extended Fund Facility (EFF), and the Resilience and Sustainability Facility (RSF). This move also included an extension, augmentation, and rephrasing of Bangladesh’s overall access to IMF support.
According to an IMF press release issued on 23 June, approximately $884 million has been made immediately available to Bangladesh under the ECF and EFF arrangements.
Additionally, around $453 million has been approved under the RSF to bolster Bangladesh’s efforts in enhancing its resilience to climate-related shocks, particularly in light of the country’s growing vulnerability to environmental disruptions.
The IMF noted that Bangladesh’s overall performance under the program has been “broadly satisfactory,” despite persistent macroeconomic pressures including global inflationary trends, tightening financial conditions, and a fragile external balance.
The IMF emphasized that steadfast progress in structural reforms is essential to stabilize the economy, protect low-income groups, and ensure long-term inclusive and environmentally sustainable growth.
In its review, the IMF commended the government for implementing key policy measures such as improving revenue mobilization, strengthening governance in the banking sector, and adopting prudent monetary policies aimed at containing inflation and stabilizing the exchange rate.
However, the Board also acknowledged some deviations. It granted a waiver for the non-observance of a performance criterion related to exchange restrictions, citing the temporary nature of the lapse and the corrective steps taken by the authorities, including exchange rate unification measures and steps to improve foreign exchange reserve buffers.
The augmented support under the RSF also reflects the IMF’s recognition of Bangladesh’s climate financing needs. As a climate-vulnerable country, Bangladesh is seen as a critical candidate for targeted financing to build greener infrastructure, enhance energy transition, and support climate-resilient livelihoods.
This latest approval brings the total disbursed amount under the IMF’s loan programme to nearly $2.7 billion, with the remaining funds contingent upon the successful completion of subsequent reviews. Bangladesh initially secured the $4.7 billion package in January 2023 to address balance of payments challenges, strengthen reserves, and support structural reform initiatives.