A Bangladeshi delegation led by Finance Minister Amir Khosru Mahmud Chowdhury has initiated negotiations with the International Monetary Fund (IMF) for a potential loan package estimated at around $4.5 billion. The talks took place on the sidelines of the IMF-World Bank annual meetings in Bangkok, with discussions expected to continue in the coming days.
The proposed IMF program is designed to span three years and aims to provide balance-of-payments support to Bangladesh, addressing ongoing challenges such as elevated inflation, external financing needs, weak revenue mobilization, and vulnerabilities within the banking sector. While the $4.5 billion figure was discussed during preliminary talks, officials from Bangladesh's Ministry of Finance noted that the final amount, financing terms, and accompanying policy conditions remain under negotiation.
The new lending arrangement is viewed as critical amid current global economic uncertainties, as Bangladesh seeks to rebuild foreign-exchange reserves and stabilize its currency. The government is also exploring financial support through a separate partnership framework with the World Bank, intended to help offset pressures from rising energy costs and capital shortfalls in the banking sector.
Finance Minister Chowdhury emphasized optimism about securing the IMF loan and expressed confidence that ongoing discussions with both the IMF and the World Bank would lead to agreements supportive of Bangladesh’s economic priorities. He highlighted the importance of phased implementation of reforms to ensure effectiveness and sustainability.
The proposed IMF program is anticipated to focus heavily on reforms in several key areas. These include improving the country's tax-to-GDP ratio by broadening the tax base, enhancing tax administration, and reviewing exemptions and duties. However, officials acknowledged that any revenue measures will need to be carefully balanced to avoid exacerbating inflation or burdening households and businesses.
Banking sector reform is expected to be a major component of the program as well, given the sector's persistent challenges such as non-performing loans, capital deficiencies, and governance issues. The government is also considering support from the International Finance Corporation (IFC) to address these capital shortages both in banks and the wider private sector, with IFC representatives planning a visit to Dhaka for further evaluation.
The IMF has reportedly highlighted the need for prudent fiscal and monetary policies, increased exchange-rate flexibility, and better-targeted subsidies, especially in the energy and agriculture sectors, as conditions tied to the new program. These reform measures echo conditions linked to Bangladesh’s previous IMF-supported arrangements.
Bangladesh’s latest engagement with the IMF follows a history of financial assistance from the Fund. The country previously received $4.7 billion under a loan arrangement approved in early 2023, which was later expanded to $5.5 billion in mid-2025. However, the current government opted to discontinue that program and seek fresh financing to better align with evolving economic circumstances and reform priorities.
An IMF mission is expected to visit Bangladesh within a month to advance negotiations and finalize the terms of the proposed loan. Meanwhile, the government continues to manage the fiscal impact of ongoing external pressures, including high oil and gas prices and global geopolitical tensions, reinforcing the urgency of securing international support.