International Monetary Fund (IMF) is planning a staff visit to Dhaka following a request from the Bangladesh government for a new support programme to anchor its economic reforms. This move marks the next stage in negotiations for a successor arrangement to the country’s existing IMF-backed facility.
IMF Mission Chief for Bangladesh Ivo Krznar on Wednesday said Fund staff are engaging with authorities on their reform agenda and policy priorities, though he noted the exact timeline for the visit has yet to be shared.
“The authorities’ request for a successor arrangement provides an opportunity to agree on a potential programme that reflects current challenges while incorporating the new authorities’ objectives and priorities,” Krznar said.
The policy shift follows a virtual meeting on 21 May between Finance Minister Amir Khosru Mahmud Chowdhury and IMF Deputy Managing Director Nigel Clarke.
During the meeting, Khosru expressed the government’s commitment to reforms but emphasised the need to sequence measures more realistically over a three-year implementation window to align with national priorities and current economic conditions.
Government officials have indicated the proposed new programme could be worth between $4 billion and $5 billion. Any new arrangement will be based on Bangladesh’s balance-of-payments needs, a credible reform agenda, and final approval by the IMF Executive Board.
Discussions regarding the specific parameters, size, and related reform commitments will take place during a subsequent programme negotiation mission.
The IMF identified weaknesses in the banking sector and low revenue mobilisation as key challenges requiring renewed and sustained effort.
While the existing arrangements – the Extended Credit Facility (ECF), Extended Fund Facility (EFF), and Resilience and Sustainability Facility (RSF) – provided an important policy anchor since January 2023, the Fund noted that the macroeconomic and political context has since changed substantially.
Bangladesh initially sought assistance in July 2022, with the previous administration securing an initial $4.7 billion that was later expanded to $5.5 billion. Of this, $3.64 billion has been disbursed across five tranches.
However, two tranches worth $1.86 billion remain undisbursed after negotiations stalled due to disagreements over banking-sector restructuring and revenue reforms.
The upcoming staff visit aims to review recent economic developments and assess reform challenges.
A functioning IMF programme is viewed as essential for unlocking parallel budget support from other development partners, including the World Bank and the Asian Development Bank.
Krznar added that the Fund remains a committed partner and looks forward to constructive engagement with the authorities and other stakeholders to support inclusive growth.
