Staff Reporter :
The International Monetary Fund (IMF) has agreed to disburse the next two instalments of its $4.7 billion loan programme to Bangladesh, totalling $1.3 billion, following a breakthrough in discussions regarding foreign exchange reforms.
The release, previously in doubt due to disagreements over the adoption of a more flexible exchange rate system, is now scheduled for June,
pending final approval by the IMF Executive Board.
Bangladesh Bank sources confirmed that a press conference will be held on Wednesday to announce the development, with Governor Dr. Ahsan H Mansur expected to join virtually from Dubai to provide further details.
The funds had been withheld due to differences over the central bank’s commitment to implementing a “crawling peg” exchange rate mechanism and addressing concerns over the country’s low tax-to-GDP ratio.
The IMF had called for a more genuinely flexible exchange rate-eliminating multiple exchange rate windows and allowing market forces to play a greater role in currency valuation.
An IMF staff mission, led by Chris Papageorgiou, visited Dhaka from 6-17 April to conduct a combined third and fourth review of Bangladesh’s performance under the Extended Fund Facility (EFF), the Extended Credit Facility (ECF), and the Resilience and Sustainability Facility (RSF).
While the IMF pushed for decisive action on exchange rate reforms, Bangladesh Bank reportedly expressed caution, citing inflationary risks and potential political fallout.
To date, Bangladesh has received $2.31 billion of the $4.7 billion programme since the first disbursement in January 2023. The first three tranches were released without issue; however, complications arose ahead of the fourth tranche-worth $645 million-due to unmet reform conditions.
Following a breakdown in negotiations in February, the Ministry of Finance stated that the delay stemmed from the need to meet jointly agreed performance benchmarks.
Experts have identified three critical conditions for Bangladesh to unlock the next instalments: allowing the market to determine the exchange rate, raising the tax-to-GDP ratio by at least 5 percentage points, and separating the National Board of Revenue’s (NBR) administrative functions from revenue policy-making.
The Ministry of Finance last month stated that disbursement would follow the successful conclusion of April’s review and subsequent approval by the IMF Board in June 2025.
