Govt to enter new loan programme with IMF

The Bangladesh government has decided to move away from the ongoing loan programme with the International Monetary Fund (IMF) and enter a new loan programme. 

There is a possibility of getting a loan of 5 billion to 6 billion dollars under this new programme, according to sources in the Finance Ministry.

The matter was discussed in a virtual meeting held last Thursday between Finance and Planning Minister Amir Khosru Mahmud Chowdhury and IMF Deputy Managing Director Nigel Clark. 

The meeting held constructive discussions on Bangladesh's macroeconomic situation, progress of the ongoing IMF programme and future cooperation, the Finance Ministry said in a press release on Monday.

The press release said, "The Finance and Planning Minister thanked the IMF for its continued cooperation and recalled the fruitful discussions held at the last Bank-Fund annual meeting held in Washington. After that meeting, the government reviewed the matter internally."

In the meeting, the minister reiterated that the government is committed to macroeconomic stability and structural reforms. However, noting that the current IMF programme was adopted in a different economic and policy context, he said, “The domestic realities, political economy and global uncertainties that have emerged have created challenges in implementing some reforms.”

He further said, “The government does not want to back down from reforms; rather, it is interested in implementing reform programmes that are realistic, step-by-step and consistent with the country’s realities. In this context, a new three-year IMF programme under the newly elected government has been discussed, which will include priority-based and implementable reforms.”

In the meeting, Nigel Clark welcomed Bangladesh’s reform initiatives and efforts to adopt new programmes. He expressed hope that the IMF’s constructive and close engagement with Bangladesh will continue. Both sides agreed to start the process of formulating a new programme soon.

Sources said that an IMF mission may visit Dhaka in July or August to finalise the new programme. Then, detailed discussions will be held on the amount, timing and conditions of the loan.

In January 2023, during the Awami League government, Bangladesh joined the IMF's $4.7 billion loan programme. Later, in 2025, the amount was increased to $5.5 billion. So far, Bangladesh has received $3.64 billion in five instalments. Another $1.86 billion is pending. However, the IMF has long been expressing dissatisfaction over the lack of satisfactory progress in revenue collection, exchange rate management and financial sector reforms.

The main areas of disagreement between the government and the IMF include the introduction of a uniform VAT rate, reduction of tax exemptions, market-based exchange rate, reduction of electricity and fertiliser subsidies, banking sector reforms and restructuring of the National Board of Revenue (NBR). Finance Ministry officials say that the government is not interested in going through these drastic reforms for the time being.

However, according to officials, an active IMF programme is very important for Bangladesh because, it acts as a 'seal of approval' of economic stability for international investors and development partners. At the same time, it is easier to get budget support from organisations like the World Bank, ADB, AIIB and JICA.

The government hopes that if the progress of the new programme is positive, the IMF will give Bangladesh a 'comfort letter'. Consequently, it will be easier to get additional budget support from multilateral lending institutions.