IMF talks gain urgency
An International Monetary Fund (IMF) delegation led by Krishna Srinivasan met Prime Minister Tarique Rahman in Dhaka on Tuesday as efforts resumed to revive the stalled $5.5 billion loan programme, with growing urgency driven by global economic uncertainty and escalating tensions in the Middle East following the
US-Israel attacks on Iran.
Srinivasan, Director of the IMF’s Asia and Pacific Department, is on a two-day visit aimed at advancing negotiations that have remained stalled since November last year.
The courtesy call on the Prime Minister was held at the Secretariat, with Finance Minister Amir Khosru Mahmud Chowdhury also present.
The discussions focused on Bangladesh’s reform agenda and the mounting economic pressures stemming from global instability, particularly concerns over energy markets, trade disruptions, and rising external financing needs.
Officials acknowledged that the ongoing conflict in the Middle East could push up oil prices and import costs, increasing pressure on Bangladesh’s foreign exchange reserves and balance of payments, making IMF support more critical.
Speaking to reporters after a separate meeting with the finance minister, Srinivasan said the IMF’s engagement with Bangladesh is centred on policy measures and structural reforms, emphasising that financial support is closely tied to credible policy commitments.
He noted that Bangladesh, like many emerging economies, is facing heightened uncertainty due to global geopolitical developments but reaffirmed the IMF’s continued support in helping the country address its economic challenges.
Key reform areas are being discussed with both the finance minister and the prime minister, with further engagements expected in the coming days.
Bangladesh is expected to receive a $1.3 billion tranche by June if progress is made on major reforms, including a more market-based exchange rate, stronger revenue mobilisation, subsidy rationalisation, and improved governance in the banking sector.
The disbursement is seen as vital for stabilising foreign reserves and maintaining investor confidence at a time of global volatility.
Earlier, two instalments were released together in June last year, but no further disbursement followed the fifth programme review in November, making the current round of negotiations particularly significant.
Finance Minister Amir Khosru Mahmud Chowdhury said the IMF programme remains active and discussions are progressing on reform requirements and their feasibility in the current economic environment.
He acknowledged that the government inherited a fragile economy, pointing to weaknesses in the banking sector, stock market instability, and a low tax-to-GDP ratio.
The minister said the government is prioritising structural reforms, deregulation, and measures to reduce the cost of doing business, alongside strengthening social protection through family cards, farmer cards, and targeted loan relief programmes. Stalled development projects are also expected to be revived to boost economic activity.
He said some IMF-backed reforms would be implemented immediately while others would be introduced gradually, with further discussions scheduled during the IMF-World Bank Spring Meetings in Washington next month.
The next tranche is likely to be reviewed in July alongside preparations for the national budget.
Addressing concerns over energy imports, the minister said financing strategies are under review as global fuel markets remain volatile due to the Middle East crisis.
Despite global headwinds, he said the government has maintained relative economic stability in recent weeks, citing stable commodity prices during Ramadan, smooth transport operations, and timely wage payments in the garment sector.
Urging patience, he said many global pressures remain beyond national control but expressed confidence that prudent policy measures and international support would help Bangladesh navigate the crisis and maintain economic stability.
