IMF talks begin anew

Bangladesh has formally requested a new financial arrangement from the International Monetary Fund (IMF) to support its ongoing economic reform agenda, according to the Fund’s Mission Chief for Bangladesh, Ivo Krznar.

In a statement issued on Wednesday, Krznar said IMF staff were currently engaging with the Bangladeshi authorities on their reform priorities as part of the Fund’s consideration of potential future support.

“The Bangladeshi authorities have requested a new IMF financial arrangement to support their economic reform programme,” he said. “IMF staff are engaging with the authorities on their reform agenda and policy priorities as part of the Fund’s consideration of possible next steps.”

The request comes as Bangladesh seeks to navigate a significantly altered economic and political landscape since the approval of its current IMF-supported programme in January 2023.

Krznar noted that the country’s existing arrangements under the Extended Credit Facility (ECF), Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) had served as an important policy anchor during a challenging period.

“However, the macroeconomic and political context has changed substantially since the Fund-supported programme was approved in January 2023, and the authorities now face a more complex set of challenges,” he said.

He identified persistent weaknesses in the banking sector and low levels of revenue mobilisation as key concerns requiring renewed policy attention.

“Banking-sector weaknesses and low revenue mobilisation underscore the need for a renewed and sustained reform effort,” Krznar added.

According to the IMF official, the government’s request for a successor arrangement presents an opportunity for both sides to formulate a programme better aligned with current realities and the priorities of the new administration.

“The authorities’ request for a successor arrangement provides an opportunity for the Fund and the authorities to agree on a potential programme that both reflects the current challenges and incorporates the new authorities’ objectives and priorities,” he said.

Any future programme, he noted, would need to be based on Bangladesh’s balance-of-payments requirements and supported by strong policy commitments anchored in a credible reform agenda. Such an arrangement would also remain subject to IMF policies and approval by the Fund’s Executive Board.

The IMF confirmed that preparations are underway for a staff visit to Bangladesh in the coming months. The visit will enable Fund officials to review recent economic developments, discuss policy priorities with government authorities and assess the country’s economic outlook and reform challenges.

Krznar said discussions regarding the size, structure and reform conditions of any potential new IMF-supported programme would take place during a subsequent negotiation mission.

“The IMF remains a committed partner to Bangladesh in its efforts to secure lasting macroeconomic and financial stability, strengthen resilience, and support strong, inclusive growth,” he said.

“We look forward to constructive engagement with the authorities and other stakeholders as this process moves forward.”

The development signals the beginning of a new phase in Bangladesh’s engagement with the IMF as the country seeks to address emerging economic vulnerabilities while advancing a broader reform agenda aimed at sustaining growth and strengthening financial stability.