IMF keeps Bangladesh hanging on loan tranches
Bangladesh received $2.3b in 3 instalments under a $4.7b loan package approved by the IMF in 2023
Another day. Another meeting. And still, no decision.
Bangladesh's wait for the fourth and fifth tranches of the $4.7 billion IMF loan is set to linger as discussions with the global lender remain inconclusive.
"No decision yet. Discussions with the IMF will continue," a senior finance ministry official told TBS, requesting anonymity due to the sensitivity of the matter.
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This follows two consecutive days of virtual meetings that concluded on Tuesday without a breakthrough. The IMF wants Bangladesh to adopt a market-based exchange rate, but the Bangladesh Bank is reluctant to let the market solely determine the taka-dollar exchange rate.
"Discussions with Bangladesh authorities continued toward reaching an agreement during the 2025 IMF-World Bank Spring Meetings in Washington, DC, in late April and are currently ongoing virtually on the parameters and policies needed to sustain reform momentum under the [loan] programme," an IMF spokesperson told TBS.
Earlier, an IMF staff mission led by Chris Papageorgiou visited Dhaka on 6-17 April to conduct a combined third and fourth review of Bangladesh's economic reform program under the Extended Fund Facility (EFF), Extended Credit Facility (ECF), and the Resilience and Sustainability Facility (RSF).
According to a senior Bangladesh Bank official, the IMF remains insistent on implementing a truly flexible exchange rate – one that goes beyond minor corridor adjustments and eliminates multiple exchange rate windows. The central bank, however, remains cautious, citing risks of inflationary shocks and political pushback.
The IMF approved a $4.7 billion loan for Bangladesh in 2023. So far, the country has received three instalments totalling $2.3 billion.
Following the breakdown of talks in February over the release of the fourth tranche, amounting to $645 million, Bangladesh's finance ministry clarified that the delay stemmed from the need to fulfil mutually agreed-upon conditions.
"The instalments are disbursed upon fulfilment of conditions that have been mutually agreed upon by the government of Bangladesh and the IMF to strengthen the foundation of the economy. Budget support programmes are associated with the implementation of conditions, some of which require time," reads the statement.
"Hence, it was mutually decided that the two disbursements scheduled in FY2024- 25 would be combined. Therefore, the IMF agreed to combine the fourth and the fifth disbursements," it added.
The disbursement will be made in June after satisfactory completion of the review scheduled in April and approval by the IMF Board in June 2025, the ministry had said.
