Bangladesh may receive $1.3 billion during next IMF meeting

The Executive Board of the International Monetary Fund (IMF) is set to meet on June 23. The meeting will present the third and fourth review reports of Bangladesh's ongoing loan program and approve the release of two tranches. If approved at the meeting, Bangladesh will receive about $1.3 billion in the fourth and fifth tranches together.

The IMF released information on the date of the meeting on its website yesterday (June 13).

Sources in the Ministry of Finance said that two review reports of Bangladesh's ongoing loan program will be presented at the meeting. If these are approved, a total of two tranches, including the delayed payment of the previous tranche, will be released together.

On January 31, 2023, the IMF approved a three-year loan program of $4.7 billion for Bangladesh. The package includes loans from the Extended Fund Facility (EFF), Extended Credit Facility (ECF) and the Resilience and Sustainability Facility (RSF). Of this, $3.3 billion is allocated from the EFF and ECF and $1.4 billion from the RSF. Notably, Bangladesh is the first country in Asia to receive a loan from the RSF.

So far, Bangladesh has received a total of $2.31 billion from the IMF in three tranches: $476.3 million in the first tranche (February 2023), $681 million in the second tranche (December 2023), and $1.15 billion in the third tranche (June 2024). The remaining $2.39 billion is due.

The fourth tranche was scheduled to be disbursed in December 2023, but was delayed for various reasons. In particular, the IMF was closed for a few days due to heavy snowfall in the United States. Then, meetings were scheduled for February and March, but were postponed. In April, an IMF delegation came to Dhaka for a two-week review, but the release of funds was stalled due to disagreements over some conditions.

The main complication was the issue of making the currency exchange rate market-based. In response to the IMF's demands, the Bangladesh government promised to finally implement a market-based exchange rate in a virtual meeting on May 12. On May 14, the IMF said in a statement that an agreement had been reached between Bangladesh and the IMF and that the funds would be released in June.

Finance department officials said that usually the funds are released within 2-3 working days of the IMF board's approval. They hope that this time too will be no exception.