For Bangladesh, the disbursement of remaining tranches under the International Monetary Fund (IMF) loan programme has become a comprehensive test of policy continuity, reform implementation and the government’s credibility.
Amid pressure on foreign exchange, rising energy costs, high subsidies and weaknesses in the banking sector, the programme is reshaping the country’s economic direction.
Analysts say the key question now is whether the reforms being signalled will be implemented sustainably or remain limited to intent.
Former World Bank Dhaka office lead economist Zahid Hussain said, “The issue is no longer just economic; it has become a question of the credibility of implementing commitments.”
He said any break in reform continuity could weaken IMF confidence. Policy reversals in banking, hesitation in exchange rate management and disruptions in fuel price adjustments may be seen as politically driven decisions.
“The IMF will want to know whether the structure being built through reforms will be sustained in the future,” he said, adding that the durability of policy, not short-term action, is now the central concern.
The crisis that led Bangladesh to the programme stems from pressures accumulated over a prolonged period during the previous Awami League government.
A widening trade deficit, rising fuel and fertiliser import costs, external debt repayment pressure and falling reserves intensified the strain. At the same time, exchange rate controls, weak revenue mobilisation and irregularities in the banking sector deepened the stress.
Bangladesh entered the IMF programme in 2023 to stabilise external balances and restore international confidence. It provides immediate financial support while setting a framework for structural reforms.
The programme’s conditions extend beyond policy design and directly affect markets and households.
A market-based exchange rate reflects the currency’s true value but raises import costs. Lower fuel subsidies push up prices, affecting transport and production. Revenue mobilisation requires changes in the tax structure and coverage. Banking reforms aim to enforce discipline in lending. Together, these measures reshape the economic structure, raise living costs and influence the business environment.
The BNP government has taken some visible steps, albeit with delays, while in areas such as banking reform it has also moved inconsistently.
Fuel prices have been increased to ease subsidy pressure on the budget. Bangladesh Bank has sought to boost reserves through dollar purchases and has intervened to keep the exchange rate within a band.
Analysts say these steps align with IMF conditions but remain fragmented and signal-driven. The IMF is looking for sustained reform momentum and deeper commitment rather than isolated actions.
Policy sources say the programme has entered a phase where implementation consistency, not just commitments, is being assessed. Earlier, partial progress or announcements were sufficient for disbursement. Now each measure is judged on long-term sustainability.
This marks the programme’s most critical test for Bangladesh.
Experiences from other countries highlight the importance of consistency. Côte d’Ivoire has retained IMF confidence through steady reforms. Kenya has maintained programme continuity despite challenges. Sri Lanka is advancing its programme through difficult adjustments.
Pakistan, by contrast, has repeatedly faced risks due to weak policy continuity and credibility.
These cases show that an IMF programme is not only about funding but also about trust. Its success depends on consistent policy implementation.
The same reality now applies to Bangladesh. If reforms falter, not only IMF funding but also support from other development partners could come under strain, as IMF assessments shape global perceptions of economic credibility.
Bangladesh’s IMF programme now stands at a decisive juncture. It will determine the stability of policy direction under BNP leadership, the sustainability of reforms and the credibility of the government’s commitments.
