IMF to consult $5.5b loan with elected govt
Staff Reporter :
The International Monetary Fund (IMF) has indicated that it wishes to engage with an elected government in Bangladesh before releasing the next tranche of its $5.5 billion loan package, scheduled for December, given the country’s impending national elections.
Bangladesh Bank Governor Ahsan H Mansur, currently in Washington to attend the 2025 IMF and World Bank Annual Meetings, confirmed the development in a phone interview with the media.
“The IMF wants to hold consultations with the next government regarding the upcoming disbursement,” he said. “Bangladesh neither agrees nor disagrees with their position.
We are not under any financial stress, so this will not create a problem. Our main concern is ensuring policy continuity. We will continue our engagement so that our policy commitments stay on track,” he added.
According to Mansur, the key issue is the completion of the loan programme review rather than the timing of the disbursement itself.
“As the election is approaching, completing the review before it would not be logical, since the Article IV Mission is also part of this process. Therefore, the IMF prefers to finalise the review after consultations with the next government,” he explained.
The Article IV Mission is expected to arrive in Bangladesh in late October. While it will conduct a partial assessment of the loan programme’s progress, it will not complete the review process. The final review is likely to be placed before the IMF Board in February, after the election period.
A senior official from the finance ministry, speaking on condition of anonymity, said that the IMF is seeking a commitment from the next government to continue the extensive reform programmes initiated by the interim administration – particularly in the banking sector and the National Board of Revenue (NBR) – in line with the loan package conditions.
So far, Bangladesh has received $3.6 billion out of the total $5.5 billion under the Extended Credit Facility (ECF) and Extended Fund Facility (EFF) programmes.
The fifth instalment was initially scheduled for December, followed by the sixth in June next year.
Before each tranche is released, an IMF mission typically conducts a two-week review in Bangladesh to evaluate progress in meeting agreed reform benchmarks. The upcoming mission is set to arrive on 29 October to begin the fifth review.
Bangladesh meets key IMF targets Bangladesh has already met most of the IMF’s performance criteria and reform targets for the June 2025 review period.
A major milestone has been achieved in foreign exchange reserves, which rose to over $20 billion, comfortably exceeding the IMF’s target of $17.4 billion for June, according to central bank data.
The net reserve, calculated as per the IMF’s BPM6 methodology – which deducts short-term external liabilities from the gross reserve – stood at $27.3 billion gross as of 16 October.
In line with IMF guidance, Bangladesh Bank in May 2025 introduced a more flexible exchange rate regime, a core condition of the reform programme. The exchange rate, which had earlier surged past Tk125 per US dollar, has since stabilised around Tk122.
The central bank has also begun phasing out direct lending in both local and foreign currencies to comply with IMF directives against quasi-fiscal operations.
At the same time, sweeping reforms have been initiated in the banking sector, including amendments to the Bangladesh Bank Order to ensure greater autonomy, revisions to the Bank Company Act, introduction of a Bank Resolution Ordinance, and the adoption of international standards for loan classification.
However, progress on the tax reform front has been slower. The NBR continues to lag behind its revenue targets.
To address this, the government has dissolved the NBR and replaced it with two new divisions under the finance ministry, aiming to modernise tax administration and strengthen revenue mobilisation – a move in line with IMF recommendations.
The IMF has long urged Bangladesh to undertake broad-based tax reforms to raise its tax-to-GDP ratio, which remains among the lowest in Asia.