Dhaka, June 24 (V7N) - The International Monetary Fund (IMF) has approved the disbursement of the fourth and fifth tranches of its ongoing loan program to Bangladesh. The decision was made during a meeting of the IMF Executive Board held Monday in Washington, D.C., according to sources at the Ministry of Finance. The country is expected to receive $1.3 billion within the next couple of days.

On January 31, 2023, the IMF approved a $4.7 billion loan package for Bangladesh under a three-and-a-half-year program. The facility aims to support macroeconomic stability, protect vulnerable and marginalized populations, and promote inclusive and environmentally sustainable growth. The request for the loan came from the then Awami League-led government in response to a widening current account deficit, a weakening of the Bangladeshi Taka, and declining foreign exchange reserves.

The IMF package includes $3.3 billion under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF), and another $1.4 billion under the Resilience and Sustainability Facility (RSF). Bangladesh is the first Asian country to benefit from the RSF—an IMF initiative designed to support climate-resilient development.

Bangladesh received the first installment of $476.3 million from the IMF on February 2, 2023. This was followed by a second disbursement of $681 million in December 2023 and a third tranche of $1.15 billion in June 2024. With these three installments, Bangladesh has so far received $2.31 billion of the total $4.7 billion loan. Following the upcoming $1.3 billion disbursement, $1.09 billion will remain, although an additional $760 million is expected to be added to the program.

The fourth tranche was initially scheduled for disbursement in December 2023, but delays occurred due to unmet conditions—particularly regarding the requirement to allow market-based exchange rates for the Taka against the US dollar. In February, the Ministry of Finance confirmed that the IMF had decided to combine the fourth and fifth tranches for a joint release.

In April, an IMF delegation visited Dhaka to assess progress on policy commitments. However, the funds remained withheld due to unresolved issues. Further discussions took place at the IMF-World Bank Spring Meetings held in Washington from April 21 to 26.

Final negotiations were conducted through several virtual meetings between Bangladesh Bank and the IMF in May. A consensus was reached on May 12, after Bangladesh agreed to transition to a market-based exchange rate regime. On May 14, the IMF announced that an agreement had been reached and that the Executive Board would proceed with the approval required for the disbursement, which has now been granted.

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