• Bangladesh to receive $1.3 billion from the IMF following agreement on reforms.
• The funds relate to the fourth and fifth tranches of a $4.7 billion program.
• Government seeks an additional $762 million to support economic stability.

The International Monetary Fund (IMF) is poised to release $1.3 billion to Bangladesh in June, coinciding with the completion of a fourth review of its $4.7 billion loan programme. This decision comes after a significant breakthrough in negotiations regarding essential exchange rate reforms, particularly the transition to a crawling peg mechanism, which allows for gradual adjustments of the taka, the national currency, over time according to Reuters and Dawn.

In discussions, officials from Bangladesh and the IMF focused on critical reforms addressing revenue management, fiscal policy, and the foreign exchange regime. The finance ministry stated that after a thorough review, both parties reached an agreement on various reform frameworks related to revenue management and currency exchange rates. As a condition for the funding, the government has redoubled efforts to restructure its revenue management by dissolving the National Board of Revenue and creating two new divisions to enhance efficiency and accountability in handling tax issues according to India Times.

Beyond the $1.3 billion, Bangladesh has requested an augmentation of approximately $762 million to meet rising external financing needs, aiming to bring total IMF assistance to around $4.1 billion. This additional request reflects the ongoing economic struggles Bangladesh faces, which include high inflation and stretched foreign reserves exacerbated by recent global economic disruptions. The IMF noted that despite a forecasted rebound in GDP growth, the country remains vulnerable to external shocks and domestic instabilities, necessitating reforms and tighter policy measures, particularly in the financial sector according to Reuters, Dawn, and India Times.