The International Monetary Fund (IMF) on Thursday gave a non-committal update on the release of the remaining US$2.4 billion from $4.7 billion pledged loan programme, casting doubt on whether the fourth and fifth tranches will be disbursed by June as hoped. Despite the government's claims of progress, IMF officials stressed that the final decision hinges on a 'strict assessment' of reforms-many of which remain incomplete or behind schedule. The vague assurances during the press briefing at Bangladesh Bank, following a 12-day review mission, have left economists questioning whether the funds will materialize on time-or at all."
The International Monetary Fund on Thursday said they are hopeful of releasing the remaining two tranches of Bangladesh's $4.7 billion loan package by the end of June. But they didn't make it clear. The announcement came during a press briefing held at Bangladesh Bank following a 12-day mission visit to Dhaka.
A staff-level agreement for the combined third and fourth reviews of the Extended Credit Facility (ECF), Extended Fund Facility (EFF), and Resilience and Sustainability Facility (RSF) remains pending. IMF officials said progress on key structural reforms will determine the timeline for board approval and subsequent disbursement.
Out of the total $4.7 billion loan approved in January 2023, Bangladesh has so far received $2.3 billion in three installments. The first tranche of $447.8 million was released in February 2023, the second tranche of $681 million arrived in December that year, and a third tranche of $1.15 billion followed in June 2024. The fourth and fifth tranches were initially scheduled for late 2024 and early 2025, respectively, but were delayed due to unmet conditions and macroeconomic uncertainties.
At the briefing, mission chief Chris Papageorgiou said Bangladesh's economy continues to struggle under global pressure and internal disruptions. "GDP growth slowed to 3.3 per cent in the first half of FY25, from 5.1 per cent in the same period last fiscal year," he stated. Inflation, though down from its July 2024 peak of 11.7 per cent, remained elevated at 9.4 per cent in March 2025-well above the central bank's 5-6 per cent target.
The IMF emphasized the need for near-term tightening of fiscal and monetary policy to contain inflation and stabilize the external position. It urged Bangladesh to swiftly implement tax reforms, including the removal of widespread preferential treatments and a simplification of the tax structure, to address its persistently low tax-to-GDP ratio.
Papageorgiou also called for continued exchange rate flexibility to rebuild foreign exchange reserves and preserve competitiveness. "The central bank must avoid premature monetary easing and calibrate policy to anchor inflation expectations," he said. Reserves have shown slight improvement in recent months but remain below comfort levels, a key concern for both the IMF and market analysts.
The fund also called for deep financial sector reform to maintain systemic stability. Legal frameworks for bank resolution, stronger supervision and institutional autonomy of the Bangladesh Bank were cited as critical. The IMF advised the government to move swiftly in operationalizing a mechanism to resolve weak banks while protecting small depositors.
In addition, the IMF called for better governance, transparency and investment climate reforms to attract foreign direct investment beyond garments and to diversify exports. It flagged the importance of ongoing work on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) compliance and the enhancement of macroeconomic data quality.
On climate resilience, IMF staff noted Bangladesh's exposure to climate risks and urged more efficient resource use, prioritization of green infrastructure and climate-resilient fiscal policy. These factors are particularly relevant for the RSF component of the package, which supports environmentally sustainable development.
The IMF delegation concluded its visit with meetings involving Bangladesh Bank Governor Ahsan H Mansur, Finance Secretary Md Khairuzzaman Mozumder, NBR Chairman Md Abu Reza Khan, and other senior officials. It also met private sector representatives, think tanks, development partners and foreign donors.
Discussions will continue during the Spring Meetings of the IMF and World Bank in Washington later this month.
If a staff-level agreement is finalized, the fourth and fifth tranches will be placed before the IMF Executive Board for approval in June, paving the way for the disbursement of the remaining $2.4 billion in stages.
The IMF reaffirmed its commitment to supporting Bangladesh's macroeconomic stability and reform agenda at this crucial juncture.
