Highlights
A high-level International Monetary Fund (IMF) delegation will arrive in Dhaka tomorrow (12 July) for a five-day fact-finding mission to assess the feasibility of a fresh loan package worth nearly $4.5 billion proposed by the government.
On the first day of the visit, IMF officials are scheduled to hold meetings with representatives from the finance ministry, Bangladesh Bank and other relevant agencies.
During the mission, which runs through 16 July, the delegation, led by IMF Bangladesh Mission Chief Ivo Krznar, will assess the government's economic reform agenda, policy priorities and the current macroeconomic situation.
In tomorrow's meetings, the IMF is expected to seek the government's position on its reform plans, revenue mobilisation, subsidy reforms, banking sector restructuring, exchange rate policy and broader macroeconomic objectives.
Finance ministry officials said the IMF will review Bangladesh's current economic conditions before deciding whether the institution will formally consider the country's request for a new lending programme.
Finance ministry officials expect that, if the current mission delivers a favourable assessment, formal negotiations on a new lending programme could begin after the IMF-World Bank Annual Meetings in October.
During the five-day visit, the IMF will also review the BNP government's FY2026-27 budget, the medium-term budget framework, the Annual Development Programme (ADP) and major infrastructure projects.
The discussions will also cover revenue collection, tax policy, public expenditure, social safety net programmes, public sector wages and recruitment, as well as subsidies for electricity, gas, fuel, fertiliser and food. Officials will also discuss power sector capacity payments, banking reforms, implementation of the Bank Resolution Act, financing of state-owned enterprises, external debt management, commercial borrowing and risks related to foreign financing.
The IMF delegation is also scheduled to hold a separate roundtable discussion on Bangladesh's banking sector.
In an email sent on 26 June to the finance secretary and the Bangladesh Bank governor, Ivo Krznar wrote: "This is not a loan negotiation mission, but rather a 'fact-finding staff visit'. The purpose of the visit is to gain a direct understanding of the government's policy objectives, reform agenda and priorities, and to prepare the IMF's internal assessment based on that information."
Krznar added: "The information gathered during this visit will form the basis for the IMF's macroeconomic assessment and policy assumptions before any potential loan negotiations begin. It will also help determine where technical assistance may be required."
In 2023, the then Awami League government signed a $4.7 billion loan agreement with the IMF to address Bangladesh's foreign exchange reserve crisis. During the tenure of the interim government, additional financing under the Resilience and Sustainability Facility (RSF) increased the total programme size to $5.5 billion.
However, after disbursing $3.595 billion in five tranches, the IMF suspended further disbursements in December last year because Bangladesh failed to meet programme conditions. After taking office, the BNP government cancelled the previous programme and applied for a new loan package after accepting those conditions.
In his email, the IMF mission chief also referred to recommendations made in the latest Article IV Consultation report, which called for stronger revenue mobilisation, rationalisation of subsidies, accelerated banking sector reforms and a more market-based exchange rate regime.
The letter said the mission will examine how the current government plans to implement those recommendations, making the issue one of the central topics of the visit.
Krznar also wrote that the IMF primarily wants to listen to the government's views. The delegation will seek to understand the government's policy priorities, reform plans and responses to recent global and regional economic developments.
A senior finance division official, speaking on condition of anonymity, told The Business Standard that the government will highlight progress on adopting a market-based exchange rate, modernising monetary policy, implementing the Bank Resolution and Deposit Protection Act, introducing risk-based supervision and advancing climate-related reforms.
Several finance ministry officials said that if the mission's assessment is positive, formal negotiations on a new lending programme could begin after the IMF and World Bank Annual Meetings in Thailand in October. The government is seeking between $4 billion and $4.5 billion under the new programme.
A finance division official said, "If the IMF concludes that the government's reform agenda is realistic, its economic policy direction is credible and the foundation for a new programme has been established, it may send a negotiation mission to Bangladesh after the IMF-World Bank Annual Meetings in October. Formal discussions would then begin on the size of the new lending programme, reform conditions and the disbursement schedule."
International Monetary Fund (IMF) / IMF loan deal / IMF Loan
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