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Saturday | September 19, 2026 | Dhaka

IMF recommends calibrated monetary tightening, exchange rate flexibility

 New Nation
 Published: 12:00 AM, 14 December 2023

Business Desk :
The International Monetary Fund (IMF) has advised Bangladesh to continue to focus on containing inflation and rebuilding external resilience.
The Washington-based lender suggested a calibrated monetary policy tightening, supported by a neutral fiscal stance, and greater exchange rate flexibility to alleviate foreign exchange pressures and rebuild buffers.
The multilateral lender made the recommendation in its statement issued after its executive board approved the second tranche of $689 million of $4.7 billion loans under the Extended Credit Facility (ECF) and Extended Fund Facility (EFF) as well as Resilience and Sustainability Facility (RSF) arrangement for Bangladesh yesterday.
This brings total disbursements under the ECF/EFF thus far to about $936.6 million and about US$221.5 million, totalling $1158 million, according to the statement.
The board said the Bangladesh”s performance is broadly on track despite the difficult environment and it welcomed the recent implementation of corrective actions and the efforts to push key reforms forward, including with support from Fund capacity development.
“Bangladesh’s economy is navigating multi-faceted economic challenges. Despite a difficult external environment, program performance has been broadly on track, reflecting the authorities’ strong commitment, ” said Antoinette Sayeh, deputy managing director and acting chair of IMF.
“The Fund-supported program is helping restore macroeconomic stability and protect the vulnerable, while accelerating macro-critical structural reforms to bolster growth potential and delivering on the climate agenda.”
She said near-term policies should continue to focus on containing inflation and rebuilding external resilience. “This requires a calibrated monetary policy tightening, supported by a neutral fiscal stance, and greater exchange rate flexibility to alleviate foreign exchange pressures and rebuild buffers.”