IMF loan 4th tranche may be delayed
Bangladesh is now expecting to receive the fourth tranche of money from the International Monetary Fund (IMF) under the ongoing $4.7 billion loan program. However, the fourth tranche may be caught in a web of conditions. The IMF has informed the Bangladesh government that the National Board of Revenue (NBR) will have to reform and the central bank will have to loosen control over the dollar price and leave it to the market. If these conditions are met, the fourth tranche of $645 million will be released for Bangladesh under the loan program next March after the previous three tranches. Otherwise, the reforms will have to wait until June.
When Finance Advisor Dr. Salehuddin Ahmed was asked about this on Sunday, he told reporters that the government is not desperate for the fourth tranche of the IMF loan. The government will hold talks with the IMF before March. The IMF’s board of directors will meet next March.
It is being said that the fourth installment may be postponed until June and whether it is correct or not, the Finance Advisor said that so far the IMF has not informed them about this. However, the current account and financial account balance of the country are currently good.
It is learned that the IMF has postponed the board meeting for the fourth installment of Bangladesh’s ongoing debt by another month from February 5 due to the currency exchange rate not being completely left to the market and the tax and revenue collection targets not being met. There are rumors that the meeting will be postponed further to June.
Finance Department sources said that getting a loan from the International Monetary Fund (IMF) depends on the implementation of reforms by Bangladesh Bank and the National Board of Revenue (NBR). If Bangladesh Bank and NBR cannot implement their reforms, then the fourth installment may be stuck. In this case, the fourth and fifth installments may be released after evaluating them along with the fifth installment. However, if the reforms are implemented, the IMF will release the fourth installment in March itself.
It is learned that the government is trying to get the loan installment even if it cannot fulfill the conditions. Discussions with the IMF on this issue are ongoing.
It is learned that the International Monetary Fund (IMF) Resident Representative in Dhaka, Jayant Dey, held a meeting with Finance Advisor Dr. Salehuddin Ahmed at the Secretariat on Monday. The meeting discussed the loan.
According to the rules, the approval of the IMF Executive Board is required before the loan installment is disbursed. The board meeting of the organization that was supposed to be held on February 5 has been postponed due to natural disasters in the United States. The meeting will be held on March 12.
Sources in the Finance Department also say that although the IMF is on track to meet all 12 conditions to receive the fourth tranche of the $4.7 billion loan program, Bangladesh is lagging behind in reforms of the NBR and Bangladesh Bank.
A $4.7 billion loan program with the IMF is ongoing in seven installments from January 30, 2023. Two days later, Bangladesh received $476.3 million in the first tranche of the loan. In December of the same year, the second tranche of $681 million arrived. In June 2024, the third tranche was released for $1.15 billion.
Bangladesh has received about $2.31 billion from the IMF in three tranches. Of the promised loan, $2.39 billion is still outstanding. In this round, i.e., the fourth tranche, Bangladesh is expected to receive $645 million. The rest will be available in three more tranches.
Bangladesh, however, has requested an additional $750 million from the organization in a separate package along with the $4.7 billion loan program. In contrast, Bangladesh is reportedly on track to meet the conditions set by the IMF.
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