No scope for advancing old loan deal with Bangladesh: IMF

The International Monetary Fund (IMF) has categorically ruled out advancing the previous loan arrangement with Bangladesh under its existing structure, citing the country's profound political transition as making the old framework both legally and strategically irreversible.

Speaking at a regular IMF press briefing at the Fund's Washington headquarters on Thursday (June 4), Communications Director Julie Kozack confirmed to international media that the dramatic shift in Bangladesh's political leadership has effectively closed the door on resuming negotiations under the terms negotiated with the former administration.

"Given the fundamental changes in Bangladesh's macroeconomic environment and political landscape, it is imperative that we begin discussions on an entirely new financing programme with the country's new authorities — without delay," she said.

Kozack said Bangladesh continues to face substantial economic headwinds despite the change in government. Domestic revenue mobilisation, restoring governance within the banking sector, and bringing runaway inflation under control remain unresolved challenges that any new programme must address.

The IMF spokesperson was careful to clarify that the Fund is not severing ties with Dhaka. "There is full scope to work together to overcome these macroeconomic challenges," she said, reaffirming the institution's commitment to Bangladesh's financial stability and inclusive development.

In a signal of urgency, Kozack announced that an IMF high-level mission will be dispatched to Dhaka in the near future. Talks with policymakers of the new interim or permanent administration are expected to place structural reform priorities — including fiscal consolidation and the banking sector overhaul — at the top of the agenda.

The previous credit programme, negotiated under the Hasina government, had been a subject of considerable domestic debate over its conditionalities. The political upheaval of mid-2024 upended implementation progress on key benchmarks, setting the stage for Thursday's announcement.

Bangladesh's central bank reserves have remained under pressure, while the taka has faced persistent depreciation. The new administration, which has sought to stabilise the economy, is expected to engage closely with the Fund on the contours of a revised financial support package.