Bangladesh to Begin Talks with IMF in Mid-July for New $4.0b Loan

Finance officials listing reform priorities under 3-year package. The government will open negotiations with the International Monetary Fund (IMF) in mid-July to secure a new $4.0 billion loan package aimed at restoring macroeconomic stability, officials said.

The move comes as the newly formed government decides to scrap the ongoing credit programme, which stalled following prolonged negotiations over the disbursement of remaining tranches.

An IMF delegation, led by Mission Chief Ivo Krznar, will visit Dhaka from July 12–17 to discuss the new financial arrangement and review Bangladesh’s economic reform agenda and policy priorities.

The new credit package will replace the existing $5.5 billion loan agreed upon in 2022 by the previous Awami League administration. The current Tarique Rahman-led government has expressed unwillingness to continue under the terms of the old deal.

Finance Ministry officials are currently gathering data and listing reform measures to be implemented over the new three-year package.

A senior finance official noted that while the government is scrapping the old programme because several past reform targets are currently too difficult to implement, the IMF is unlikely to drop them entirely. Instead, the Fund may agree to a deferred timeline for critical adjustments.

Another official confirmed that the new package will definitely include reforms for boosting revenue mobilization, restructuring the National Board of Revenue (NBR), strengthening the banking sector, and ensuring greater exchange-rate flexibility.

Earlier this month, IMF Mission Chief Ivo Krznar stated that any new arrangement must be based on Bangladesh's balance-of-payments needs and a strong commitment to a credible reform agenda, subject to IMF Executive Board approval.

The IMF acknowledged that Bangladesh's macroeconomic and political landscape has shifted substantially since the original programme was approved in January 2023. It noted that persistent banking sector weaknesses and low revenue mobilization underscore the need for sustained reform.

Background The IMF initially approved a $4.7 billion loan for Bangladesh in January 2023 to counter macroeconomic instability triggered by pandemic disruptions and the war in Ukraine, which had severely depleted foreign exchange reserves.

The loan was scheduled for release in seven tranches through May 2026, and the total package was increased by $800 million last year, bringing it to $5.5 billion. To date, Bangladesh has received $3.595 billion under the now-stalled agreement.