Bangladesh to receive $1.3 billion from IMF in June
What's the story
The International Monetary Fund (IMF) is set to release $1.3 billion to Bangladesh in June after the fourth review of its $4.7 billion loan program was successfully completed.
This release comes after a key breakthrough in talks regarding exchange rate reforms, confirmed the country's finance ministry.
The funds, meant for the fourth and fifth tranches, were earlier withheld due to the IMF's demand for more exchange rate flexibility.
Reform consensus
Agreement reached on key reform frameworks
The fourth review was held in Dhaka in April, and afterwards, during the Bank-Fund Spring Meetings in Washington DC, there were further discussions.
Talks were mainly on crucial reforms concerning revenue management, fiscal policy and the foreign exchange regime.
"After carefully reviewing all the issues ... both parties have agreed on the revenue management, currency exchange rate and other reform frameworks," Bangladesh's finance ministry said.
Restructuring efforts
Bangladesh government restructures revenue management
As per the IMF's conditions, the Bangladesh government has dissolved the National Board of Revenue (NBR).
It has now been replaced by two divisions under the finance ministry—one for tax policy and another for tax collection and administration.
The restructuring aims to improve efficiency, transparency and accountability in revenue management.
Apart from the IMF funds, the Bangladesh government is also expecting $2 billion in budget support from various development partners.
Financial support
Bangladesh anticipates additional budget support from development partners
This includes the World Bank, Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB), Japan and OPEC Fund for International Development.
Bangladesh approached the IMF in 2023 for a $4.7-billion bailout after its foreign reserves came under strain due to a global spike in commodity prices after Russia's invasion of Ukraine.
This affected the country's ability to afford essential imports of fuel and gas.
Earlier, Bangladesh had received $2.3 billion under the first three tranches of the IMF loan program.