Sunday 23 / August / 2026
DHAKA: The release of further funding under Bangladesh’s International Monetary Fund (IMF) loan programme remains stalled as the country faces delays in implementing key financial-sector reforms, subsidy reductions and measures to strengthen climate resilience.
The IMF has set nearly a dozen conditions for the release of the remaining tranches of Bangladesh’s $4.7 billion loan programme, including reforms to the banking sector and banking laws, strengthening the capacity of the National Board of Revenue (NBR), enabling single-click access to taxpayer information, reducing fuel and electricity subsidies, adopting a market-based foreign exchange rate and improving climate-risk management.
The Bangladesh government is also seeking an additional $2 billion in budget support from the IMF, alongside the remaining funds under the existing programme. Dhaka is seeking to reactivate the suspended programme and secure new financing, but the IMF has placed macroeconomic reforms and climate resilience among the key conditions for further assistance.
A six-member IMF Technical Assistance mission from the Fund’s Fiscal Affairs Department visited Dhaka from July 19 to July 30 to assess Bangladesh’s climate policies, financial structures and institutional capacity to manage climate risks. The mission was led by Suphachol Suphachalasai, senior economist in the IMF’s Climate Policy Division.
A central focus of the mission was the IMF’s Climate Policy Diagnostic (CPD), which examines Bangladesh’s climate mitigation policies, financing framework and capacity to manage climate-related risks. The delegation also reviewed the country’s broader macroeconomic situation and discussed the prospects for a new IMF lending programme.
The mission comes as Bangladesh seeks to revive its Resilience and Sustainability Facility (RSF) programme. Under the facility, Bangladesh secured 1 billion Special Drawing Rights (SDR), equivalent to around $1.4 billion. About two-thirds of the facility has already been disbursed, while the remaining portion is currently suspended.
Bangladesh was the first country in Asia to secure financing under the RSF. The IMF has said the facility complements the country’s Extended Credit Facility (ECF) and Extended Fund Facility (EFF), supporting measures to address climate change, strengthen resilience and mobilise additional public and private financing.
Financial-sector reforms left incomplete under the previous IMF programme have also emerged as a priority in discussions over future financing. The latest IMF mission therefore went beyond a climate-policy assessment and examined the broader reform agenda that will determine whether Bangladesh can secure additional assistance.
The IMF delegation held meetings with the Finance Division, Bangladesh Bank, the Financial Institutions Division, the NBR, the Ministry of Power and Energy, the Ministry of Forest and Environment and other government agencies.
The delegation also met Finance Secretary Dr Md Khairuzzaman Mozumder. According to the finance secretary, IMF officials separately met officials from the Macroeconomic Wing and Budget Wing of the Finance Division to review climate- and disaster-related initiatives.
Discussions included the status of the Bangladesh Climate Development Partnership and the National Strategy for Disaster Risk Financing, as well as the extent to which climate risks are being incorporated into macroeconomic planning.
“We hope that the IMF will consider different difficulties of Bangladesh to meet cent percent of the loan conditions. Despite some challenges, we are expecting the loans will be released in favour of Bangladesh,” the finance secretary told UNB.
The IMF mission also held discussions with the Ministry of Water Resources on flood-control measures, delta and coastal management, irrigation policy and surface- and groundwater management. These areas are considered critical to Bangladesh’s ability to manage the long-term economic consequences of climate change.
Bangladesh has meanwhile introduced measures aimed at integrating climate considerations into public finances. The Finance Division recently launched the Public Financial Management Reform Strategy 2025-2030, which, for the first time, incorporates climate-smart public financial management and gender-responsive budgeting.
The FY2025-26 budget has allocated around Tk 42,206.89 crore across 25 ministries for climate-related expenditure, representing 10.09 percent of the total budget.
Economist Professor Abu Ahmed said reform measures must continue to protect the country’s economic interests. He also stressed that Bangladesh, being among the countries most vulnerable to climate change, urgently needs to strengthen its institutional capacity to manage climate-related risks.
The IMF’s assessment is therefore expected to play an important role in determining the future of Bangladesh’s financing programme. The recommendations from the latest technical mission could influence both the release of the suspended funds and negotiations over a potential new lending arrangement, as Dhaka seeks additional external support while addressing longstanding economic and financial-sector weaknesses.
