BM Desk : The fourth and fifth tranches of the International Monetary Fund’s (IMF) ongoing loan program for Bangladesh are scheduled to be approved by the Executive Board on June 23. The meeting’s program was part of the agenda that the IMF posted on its website on Friday. Approximately $1.3 billion will be given to Bangladesh in two installments if the idea is accepted at the conference.

A report on the evaluation of Bangladesh’s operations would be provided at the conference, according to sources in the Finance Ministry. The money will be released in two tranches if it is authorized. The IMF authorized a $4.7 billion loan program for Bangladesh in January 2023, with a three-and-a-half-year period.

This loan was intended to safeguard vulnerable groups, promote inclusive and ecologically sustainable growth, and maintain macroeconomic stability. The devaluation of the taka, a problem in the foreign exchange reserve, and an increasing current account deficit under the Awami League government are the reasons Bangladesh is requesting IMF help.

The Extended Credit Facility (ECF and EFF) provides $3.3 billion of the overall loan, while the Resilience and Sustainability Facility (RSF) provides $1.4 billion. Remarkably, Bangladesh is the first Asian nation to obtain an RSF loan.

Three installments totaling $2.31 billion have been given to Bangladesh thus far. These were paid out in three installments: the first ($476.3 million) on February 2, 2023; the second ($681 million) in December of the same year; and the third ($1.15 billion) in June of 2024. The sum of the two remaining tranches is $2.39 billion.
The fourth tranche was initially scheduled to arrive in December 2023, but the IMF’s requirements—particularly the non-market-driven exchange rate—blocked its delivery. The decision was later made to release the fourth and fifth tranches simultaneously. At the spring meeting in Washington, the IMF made progress on the matter, and in April, a delegation traveled to Dhaka.

In May, Bangladesh Bank and the IMF met virtually multiple times, and on May 12, they came to a definitive agreement. After that, Bangladesh implemented a market-based exchange rate, which was one of the primary requirements set by the IMF.
The IMF announced in a statement released from Washington on May 14 of last month that an agreement had been reached and that, should the board approve the loan, it would be disbursed in June. According to the IMF’s identical statement, Bangladesh has asked for an extra $760 million in loans, which, if granted, would raise the overall loan amount to $5.4 billion. The organization also placed a strong emphasis on currency rate reforms, banking sector reforms, and revenue collection at the same time.