B Mirror Report: The Bangladesh government has formally decided to move away from the existing loan programme signed with the International Monetary Fund (IMF) during the previous Awami League administration and is preparing to negotiate a fresh $5 billion package under revised conditions, officials said.
The policy shift emerged during a virtual meeting held on May 21 between a Bangladesh delegation led by Finance and Planning Minister Amir Khasru Mahmud Chowdhury and an IMF team headed by Deputy Managing Director Nigel Clarke.
According to a Finance Ministry press release issued on Sunday, the meeting focused on Bangladesh’s macroeconomic situation, progress under the current programme and future cooperation between the two sides.
During the discussion, the finance minister recalled productive talks held at the recent IMF-World Bank annual meetings in Washington and reiterated the government’s commitment to maintaining macroeconomic stability and carrying out structural reforms.
However, he noted that the existing IMF programme had been designed under a significantly different political and economic context. He said changes in the domestic political environment and growing global uncertainties had made it difficult to implement several structural reform conditions included in the earlier agreement.
The minister said the government does not intend to abandon reforms entirely, but instead seeks a more realistic and country-specific reform agenda aligned with current economic realities.
In this context, both sides discussed launching a completely new IMF programme under the newly elected government. The proposed framework would focus on phased implementation of priority reforms over a realistic three-year period.
Nigel Clarke welcomed Bangladesh’s renewed reform initiative and proposal for a new lending arrangement, expressing hope for continued close and constructive engagement between the IMF and Bangladesh.
Both parties agreed on the need for a practical and implementable loan package and decided to expedite preparatory work for future negotiations.
Senior Finance Ministry sources said the decision to exit the previous programme was largely driven by prolonged deadlock over several stringent IMF conditions.
The IMF had reportedly pushed for a uniform 15 percent value-added tax (VAT), withdrawal of tax exemptions, and replacement of broad government subsidies on electricity and fertiliser with targeted cash transfers.
International development partners have also expressed concerns over recent amendments to the Bank Resolution Act, 2026, arguing that the changes may weaken transparency.
Finance Minister Amir Khasru Mahmud Chowdhury has publicly stated that the elected government cannot accept donor-imposed conditions that conflict with public interest or the BNP government’s election manifesto.
Senior financial officials said maintaining an IMF programme remains crucial for Bangladesh, as it serves as a signal of international financial confidence and helps unlock an additional $3 billion to $4 billion annually in budget support from institutions such as the World Bank and the Asian Development Bank.
An IMF delegation is expected to visit Dhaka in July or August to finalize the size, timeline and conditions of the proposed new loan arrangement.
