The International Monetary Fund (IMF) confirmed on Wednesday that Bangladesh requested the entity for an additional financial support of $762 million, as the country grapples with mounting macroeconomic challenges.This request, if granted, would bring the total IMF assistance to Bangladesh to approximately $4.1 billion under a mix of credit and sustainability programmes.“Amid significant macroeconomic challenges, the authorities requested an augmentation of SDR (Special Drawing Rights) 567.2 million (approximately $762 million) in IMF financial support to Bangladesh under the ECF and EFF arrangements,” said Chris Papageorgiou, IMF mission chief for Bangladesh, quoted by PTI.The IMF plans to disburse $1.3 billion to Bangladesh in June after completing its fourth assessment of the $4.7 billion lending programme. IMF and Bangladeshi authorities reached a staff-level agreement to complete the combined third and fourth reviews under the extended credit facility (ECF), extended fund facility (EFF), and resilience and sustainability facility (RSF). The agreement still awaits approval from the IMF Executive Board, and is contingent on critical prior actions such as full exchange rate liberalisation and tax reforms.If approved, the completion of the reviews would unlock SDR 983.8 million (around $1.3 billion), comprising SDR 650.5 million ($874 million) from the ECF and EFF, and SDR 333.3 million ($448 million) from the RSF.Explaining the reason behind the aid, the IMF said that the Bangladeshi economy is under considerable strain, as its GDP growth slowed to 3.3 per cent year-on-year in the first half of the 2024-25 fiscal year. While a modest rebound to 3.8 per cent is projected for the full year, pressures remain high due to external financing needs and domestic instability.Inflation, which approached double digits earlier in the fiscal year, is now expected to fall to around 8.5% by the end of the year. However, the IMF warned that risks remain tilted to the downside, citing issues within the banking sector and ongoing global uncertainty.To address the challenges, the IMF has urged tighter near-term policy measures, alongside longer-term structural reforms. These include strengthening governance, improving transparency, and enhancing the business climate to attract foreign investment and diversify exports beyond the ready-made garment sector.“Institutional reforms to bolster the independence and governance of Bangladesh Bank will be essential for ensuring long-term macroeconomic and financial stability and for the effective implementation of broader financial sector reforms,” IMF said.
