Bangladesh Moves Toward New $4.5bn IMF Programme

Bangladesh is preparing to enter a new loan programme worth $4–4.5 billion with the International Monetary Fund (IMF), while moving away from the lender’s ongoing multi-billion dollar credit arrangement, according to the Ministry of Finance.

The development was confirmed in an official statement issued on Monday, saying the matter was discussed during a high-level virtual meeting held on May 21 between Bangladeshi officials led by Finance Minister Amir Khosru Mahmud Chowdhury and IMF Deputy Managing Director Nigel Clarke.

Senior officials, including the central bank governor, finance secretary and other top policymakers, also participated in the meeting.

The Ministry of Finance said discussions are now underway to design a new three-year programme focused on phased and realistic structural reforms. IMF officials, including Clarke, reportedly welcomed the initiative.

Finance Minister Amir Khosru said the current programme was negotiated under different economic and policy conditions, while changing domestic realities and global uncertainties have made several targets difficult to implement within the original framework.

He stressed that the government remains committed to reforms but prefers a more practical, step-by-step approach aligned with domestic conditions.

Officials acknowledged that progress under the existing programme has lagged in key areas, including revenue mobilisation, VAT reform, tax exemptions, and modernisation of tax administration.

Concerns were also raised over delays in adopting a market-based exchange rate, reducing energy subsidies, and strengthening reforms in the banking sector, particularly in managing non-performing loans and improving governance.

With less than a year remaining in the current arrangement, officials said meeting all remaining targets is increasingly unlikely. The new programme is expected to provide additional time to complete broader economic adjustments.

Following initial agreement in principle, the finance ministry is seeking final policy approval before formally notifying the IMF of Bangladesh’s plan to transition to a new programme.

An IMF mission is expected to visit Dhaka in July or August, at the start of the next fiscal year, to negotiate the terms of the new arrangement.

Former World Bank Dhaka office economist Dr Zahid Hussain said the move effectively gives Bangladesh more time to complete reforms that were already part of the original programme.

He noted that while timelines may change, the core economic adjustments are likely to remain essential for long-term stability.