IMF Sets New Loan Conditions for Bangladesh

The International Monetary Fund (IMF) has introduced fresh requirements for Bangladesh as part of its $5.5 billion loan program, aimed at stabilizing the nation’s economy. These conditions focus on reducing domestic and external arrears in critical sectors like power and fertilizers, which must be addressed before Bangladesh can access the next loan tranche. This development follows the recent approval of $1.3 billion for the fourth and fifth installments, bringing total disbursements to $3.61 billion since the program began in 2023.

The IMF’s terms also emphasize adopting a market-based exchange rate and improving tax revenue collection to strengthen fiscal health. Bangladesh’s central bank has taken steps toward a more flexible exchange rate system, a move seen as vital to easing pressure on foreign exchange reserves, which are projected to rise to $23.6 billion in the next fiscal year. Additionally, the IMF has revised Bangladesh’s GDP growth forecast for 2025-26 to 5.4%, citing political uncertainty and banking sector stress.

Posts on X reflect mixed sentiments, with some users noting the IMF’s focus on economic reforms, while others express concerns about the feasibility of meeting these conditions amidst political challenges. The interim government, led by Muhammad Yunus, faces the task of balancing these reforms with upcoming national elections, which the IMF has inquired about before releasing further funds.

These measures aim to support Bangladesh’s economic stability and climate resilience, but compliance remains key to unlocking the remaining $1.09 billion of the loan package.

Published in SouthAsianDesk, June 27th, 2025

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