Bangladesh secures $1.3 billion IMF payout after reaching key reform agreement

Bangladesh is set to receive $1.3 billion from the International Monetary Fund (IMF) in June, following a breakthrough agreement on key economic reforms.

The disbursement, which includes the fourth and fifth tranches of a $4.7 billion loan package, had been delayed due to the IMF's demands for greater exchange rate flexibility.

According to a statement from Bangladesh’s finance ministry, the deal was finalised after extensive discussions in Dhaka and during the Spring Meetings of the IMF and World Bank in Washington, D.C. The negotiations focused on critical areas such as revenue reform, fiscal discipline, and foreign exchange policy. A major sticking point — the adoption of a more flexible exchange rate through a crawling peg system — was successfully addressed.

In a major institutional overhaul to meet IMF conditions, the government has dissolved the National Board of Revenue (NBR). In its place, two separate divisions under the finance ministry will now oversee tax policy and tax administration respectively. This change is intended to improve transparency, efficiency, and governance in public finance.

With the IMF agreement now in place, Bangladesh expects the combined $1.3 billion payout by June. This adds to the $2.3 billion already received under the first three installments of the bailout program, which was initially sought in 2023 to stabilize the country’s dwindling foreign reserves. The reserves had been severely impacted by a spike in global commodity prices following Russia’s invasion of Ukraine.

In addition to the IMF assistance, Bangladesh anticipates $2 billion in budgetary support from key international partners including the World Bank, Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB), Japan, and the OPEC Fund for International Development.