IMF discusses $1.3b loan release timeline with PM Tarique

International Monetary Fund (IMF) Asia and Pacific Department Director Krishna Srinivasan and Prime Minister Tarique Rahman today (24 March) discussed the possibility of Bangladesh receiving $1.3 billion by June, combining the pending December tranche with the next scheduled instalment, according to sources familiar with the matter.

Subject to successful IMF talks and the BNP-led government's commitment to agreed conditions, the country could receive the amount by June, finance ministry officials said.

After the meeting, Finance Minister Amir Khosru Mahmud Chowdhury told reporters that the final discussion regarding the release of the next $1.3 billion instalment from the IMF will take place at the lender's board meeting in April.

The minister said discussions regarding the IMF loan disbursement have already been held. "We have had an ongoing program with the IMF for several years. This program will be revisited, and there is no issue with that."

When the BNP government took office, it inherited an economy and a banking sector in a very fragile state, he stated, adding that the current programs are designed to help us recover from that situation.

The meeting took place at the Bangladesh Secretariat, according to a Facebook post from the Prime Minister's Office.

In the context of the US-Israel war on Iran, Bangladesh has sought an additional $2 billion in loan assistance from the IMF, the World Bank, and other agencies to finance fuel imports, Prime Minister's Adviser Rashed Al Titumir recently said.

During this period, the government is placing importance on securing the IMF loan tranche, sources said.

In a letter, dated 23 February, the Economic Relations Division (ERD) said the IMF intended to meet with the prime minister to discuss and review the progress of reforms undertaken under its programme, assess their successful completion, and reaffirm continued cooperation with the new government.

A senior finance ministry official, speaking on condition of anonymity, said key IMF conditions, including revenue mobilisation targets, have not yet been met.

Other pending issues include the restructuring of the National Board of Revenue (NBR), ensuring greater independence for Bangladesh Bank, and fully adopting a market-based exchange rate.

Bangladesh signed a $4.7 billion loan agreement with the IMF on 30 January 2023, amid economic strain triggered by the Covid-19 pandemic and the Russia-Ukraine war.

The programme included conditions such as revenue reform, banking sector restructuring, and subsidy reduction.

The IMF later extended the programme by six months in June last year and added $800 million, bringing the total package to $5.5 billion.

So far, Bangladesh has received $3.64 billion under five tranches: $476.3 million in February 2023, $681 million in December 2023, $1.15 billion in June 2024, and $1.33 billion in June 2025, leaving $1.86 billion yet to be disbursed.

The IMF had been due to release another tranche last December but withheld it pending discussions with an elected government.

At the IMF-World Bank annual meetings in Washington last October, the lender informed then-finance adviser Salehuddin Ahmed and then-Bangladesh Bank governor Ahsan H Mansur that the next disbursement would follow talks with the elected administration.

After the IMF decided not to release a loan tranche, Salehuddin said in November that the Fund would also discuss how much loan support the elected government intended to seek.