IMF Board meeting 23 June: Loan review could unlock $1.3b for Bangladesh

Staff Reporter :

The Executive Board of the International Monetary Fund (IMF) is set to convene on 23 June to assess Bangladesh’s progress under its ongoing $4.7 billion loan programme.

The meeting will consider the third and fourth review reports, and, if approved, could result in the disbursement of the fourth and fifth instalments simultaneously – totalling approximately $1.3 billion.

The potential release of funds follows an extended delay in the fourth tranche, originally anticipated in December 2024.

A combination of factors, including severe winter disruptions in Washington D.C., protracted negotiations, and disagreements over currency reform, contributed to the holdup.

A key sticking point was the IMF’s condition that Bangladesh adopt a market-based exchange rate regime. After months of deliberation, a breakthrough was achieved in May when Bangladesh agreed to fully liberalise its exchange rate, meeting one of the IMF’s central requirements for continued financial support.

The total IMF package for Bangladesh includes $3.3 billion under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF), in addition to $1.4 billion from the Resilience and Sustainability Facility (RSF) – making Bangladesh the first country in Asia to benefit from the RSF.

To date, Bangladesh has received $2.31 billion in three instalments: $476.3 million in February 2023, $681 million in December 2023, and $1.15 billion in June 2024. With $2.39 billion in undisbursed funds remaining, the upcoming board decision will be crucial in reinforcing the country’s foreign exchange reserves and supporting overall macroeconomic stability.

According to finance ministry sources, once the IMF board gives its approval, funds are typically disbursed within two to three working days. If all proceeds according to plan, Bangladesh could receive the twin tranches before the end of June.