The International Monetary Fund (IMF) will decide on the next tranche of loan after assessing the current state of the Bangladesh economy, the progress of financial sector reforms and the actual implementation of the set conditions.
To this end, the global lender has sought a time-bound and structured new roadmap for Bangladesh's financial sector reforms.
On Wednesday (March 25), after a meeting with Bangladesh Bank Governor Md Mostakur Rahman, IMF Bangladesh mission chief Chris Papageorgiou told reporters that the IMF and World Bank Spring Meeting will be held in Washington next April. After that meeting, a review mission will visit Bangladesh.
During that visit, the progress of the loan program will be reviewed and a decision will be taken on the next tranche of loan disbursement based on it. If the discussions are successful, Bangladesh may receive the next tranche of loan by June.
Bangladesh Bank sources said that preparations are being made for the IMF delegation's visit to Dhaka in the second week of April in view of the possible mission visit.
The visit will discuss the progress of financial sector reforms, foreign exchange reserve situation, exchange rate management and banking sector stability in detail.
IMF officials said that the organization wants to know how the continuity of the financial sector reform program started during the interim government will be maintained during the new government.
To this end, a written and time-bound roadmap has been sought from the government, which will clearly mention the various stages of reforms, implementation timeframe and expected results.
Bangladesh Bank assistant spokesperson and director Mohammad Shahriar Siddiqui said that the IMF sees the recent progress in various macroeconomic indicators of Bangladesh as positive.
In particular, they have positively evaluated the increase in foreign exchange reserves, the move towards a market-based framework in exchange rate management and the initiatives taken in financial sector reforms.
He said: “The IMF has asked for a time-bound roadmap in writing. Bangladesh Bank has already started that work. The current stage of various steps in financial sector reform has also been presented before them.”
The Financial Stability Department of Bangladesh Bank presented the progress of financial sector reforms to the IMF representatives at the meeting.
Initiatives were announced to strengthen good governance in the banking sector, restructure weak banks, reduce non-performing loans, and strengthen financial sector supervision.
Several important steps were taken during the interim government to overcome the weaknesses of the banking sector. Among them, five weak private banks were merged to form a state-owned Sammilito Islami Bank.
At the same time, initiatives were taken to identify irregularities and weaknesses by conducting special inspections in several banks.
However, officials say that at least a dozen banks are still facing various problems. Due to this, it may be necessary to prepare a separate bank-based restructuring plan.
In addition, the plan to reduce non-performing loans in phases according to the IMF's previous conditions is still facing challenges in practice. An official of the central bank said that currently the non-performing loan rate has reached about 35%, which is seen as a major risk for the financial sector.
The situation in the foreign sector has also gained importance in the discussions with the IMF. Maintaining foreign exchange reserves stable, restoring normality in foreign trade transactions, and managing import cost pressures are now emerging as major challenges for the government.
The ongoing Iran war in the Middle East has created instability in the energy market. This is expected to increase the cost of importing energy, which could put new pressure on Bangladesh's foreign exchange reserves.
In this situation, the government is also considering the possibility of additional financing from the IMF.
Finance Minister Amir Khosru Mahmud Chowdhury has already said that discussions with the IMF may be held to address the energy crisis.
After pressure arose in Bangladesh's foreign transactions, negotiations with the IMF began in 2022. Later, Bangladesh signed a loan agreement with the organization for $4.7 billion in early 2023. Later, the loan amount was increased to $5.5 billion.
Bangladesh received $476.3 million in the first installment on February 2, 2023 under the loan program. The second installment of $682 million came in December of the same year.
The third tranche of $1.15 billion was disbursed in June 2024. Later, due to delays in implementing the conditions, the fourth tranche was suspended, and the fourth and fifth tranches of $1.337 billion were disbursed together in June 2025.
So far, Bangladesh has received a total of $3.64 billion in five tranches, while $1.86 billion is still owed under the loan program.
According to the original schedule, the sixth tranche was supposed to be disbursed in December last year. However, the disbursement was suspended as discussions on the reform program with the elected government were not completed.
