IMF stalls Bangladesh loan pending financial and climate reforms

The International Monetary Fund (IMF) has stalled the release of remaining funds to Bangladesh, demanding the completion of several pending reforms in the financial sector and climate resilience. The government is currently seeking an additional $2 billion in budget support in addition to the remaining tranches of an existing $4.7 billion IMF programme.

The IMF has reportedly set nearly a dozen conditions to reactivate the suspended programme. These include banking and legal reforms, capacity building for the National Board of Revenue (NBR), and providing single-click access to taxpayer information. Other requirements involve the removal of fuel and electricity subsidies, the implementation of a market-based foreign-exchange rate, and measures to enhance climate resilience.

A recent visit by the IMF's Fiscal Affairs Department delegation to Dhaka focused on reviewing progress in key sectors and assessing tax policies. Additionally, a Technical Assistance mission evaluated Bangladesh's institutional capabilities regarding climate change, which will influence discussions for potential new loan programmes. The country's 'Public Financial Management Reform Strategy 2025-2030' has introduced climate-smart management and gender-responsive budgeting.