Disbursement of the next tranches of the International Monetary Fund (IMF) loan and fresh budget support remains tied to the fulfilment of policy conditions, with no final decision yet on whether Bangladesh will receive the funds.
Officials familiar with discussions with the lender say time is running out to secure the funds.
They say decisions on critical reforms – including revenue mobilisation, financial sector restructuring, energy subsidy rationalisation and exchange rate management – will determine whether two pending tranches are approved and whether additional financing materialises.
Bangladesh is currently under a $5.5 billion IMF loan programme.
It expects to receive about $1.3 billion in two tranches, including a delayed instalment from December and another due in June.
At the same time, the government is seeking an additional $3.2 billion in budget support to ease economic pressures linked to the Middle East crisis.
Against this backdrop, Bangladesh and the IMF held five meetings on the sidelines of the spring meetings of the IMF and World Bank in Washington between 14 and 17 April.
Following the meetings, both IMF officials and Finance Minister Amir Khosru Mahmud Chowdhury spoke to the media. However, neither side provided clarity on the prospects of loan disbursement.
Multiple sources involved in the discussions told TIMES that the meetings were largely oral in nature, with no formal exchange of documents. Bangladesh presented its financing needs, while the IMF outlined – also verbally – the areas where it expects policy progress.
The next phase of negotiations now hinges on Bangladesh’s written proposal. Officials who took part in the meetings are expected to prepare a detailed plan outlining the policy actions the government would take if the financing is approved.
According to sources, the IMF is focusing on four key areas: boosting revenue, managing energy subsidies, making the exchange rate more market-based, and strengthening reforms in the banking sector.
Based on this proposal, further negotiations will follow. An IMF mission may visit Bangladesh in the last week of April or early May, although virtual meetings remain an option if needed. These engagements are expected to move the process towards a final decision.
If sufficient progress is made, a Staff-Level Agreement (SLA) could be reached – a critical step in the IMF programme. However, if the IMF is not satisfied with Bangladesh’s proposal, an SLA may not materialise.
In that case, both the pending tranche disbursements and new budget support would face uncertainty, sources said.
Finance Minister Amir Khosru Mahmud Chowdhury struck an optimistic note after the meetings. “Discussions are ongoing. The unresolved issues will be addressed,” he told reporters in Washington, adding that while development partners appear positive, it is too early to comment on the size or conditions of any package.
The IMF, however, has taken a more cautious stance. In a press briefing on 16 April, the IMF’s Asia and Pacific Department Director Krishna Srinivasan said that Bangladesh still has work to do in key areas, particularly revenue mobilisation, financial sector stability, and exchange rate management.
He also indicated that progress would be “difficult” without improvements in revenue performance, which it described as relatively low.
Economists say maintaining the IMF programme is crucial for Bangladesh, as other development partners often rely on the lender’s assessment before extending financing.
Zahid Hussain, former lead economist at the World Bank’s Dhaka office, told TIMES that progress is needed in areas such as energy price adjustments, exchange rate pressures, revenue collection, and certain policy aspects of the banking sector. “It is still not clear where both sides agree,” he said.
Mohammad Ejazul Islam, director general of the Bangladesh Institute of Bank Management, said it is too early to draw negative conclusions. “The process is still open, and Bangladesh still has time to place the proposals before the June board meeting,” he noted.
A similar position was conveyed by the Bangladesh Embassy in Washington. In a press statement, Press Minister Golam Mortoza said that while there were differences on some issues, both sides agreed to continue discussions and work towards consensus.
“The IMF has made it clear that it is a development partner of Bangladesh and wants to continue supporting the country during the tenure of the democratically elected government,” he said.
Analysis of the situation suggests that Bangladesh is also under time pressure. If discussions and negotiations on the proposal are completed in April and May, the country’s requests could be placed before the IMF Executive Board in June.
If approved, disbursement could follow shortly. However, officials say meeting that timeline will require swift progress on policy decisions in the coming weeks.
