Dhaka, Bangladesh (BBN) – Bangladesh is set to receive US$1.34 billion from the International Monetary Fund (IMF) following the executive board’s approval of the fourth and fifth instalments of its loan to the South Asian nation.
The IMF executive board concluded the combined third and fourth reviews of Bangladesh’s arrangements under the Extended Credit Facility (ECF) and Extended Fund Facility (EFF) and approved an extension, augmentation and re-phasing of access.
This decision provides Bangladesh with immediate access to about $884 million, according to an IMF announcement, issued from Washington DC on Monday.
The IMF executive board also concluded the combined Third and Fourth Reviews of Bangladesh’s arrangement under the Resilience and Sustainability Facility (RSF), making available about US$453 million to support the Bangladesh economy’s resilience to climate change.
Additionally, the IMF executive board approved a modification of performance criteria and granted a waiver for the non-observance of the performance criterion related to the non-imposition and non-intensification of exchange restrictions, based on the temporary nature of the non-observance and the implementation of corrective measures.
“We’re expecting to receive the funds from the IMF within a couple of days,” a senior official of the Bangladesh Bank (BB) told the BBN while replying to a query.
He also said the country’s foreign exchange reserves will increase further after receiving the funds from the IMF.
However, Bangladesh’s macroeconomic challenges have increased since the popular uprising in the summer of 2024, which led to the ouster of the previous government, according to the IMF.
The timely formation of an interim government has helped stabilize political and security conditions, fostering a gradual return to economic stability.
“However, the economic outlook has worsened due to persistent political uncertainty, continuation of tighter policy mix, rising trade barriers, and increasing stress in the banking sector,” the global monetary watchdog noted.
Program performance for the third and fourth reviews remains broadly satisfactory despite the difficult political and economic context.
The IMF also said the authorities are fully committed to implementing necessary policies under the program and have recently pressed forward with critical reforms to increase exchange rate flexibility and boost tax revenues.
The IMF granted the $4.7 billion loan to Bangladesh in January 2023 to help support the country's sluggish economy and slim foreign-exchange reserves. The loan was scheduled to be given in seven instalments by May 2026.
Until now, the country has received $2.295 billion under this loan programme.
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