The International Monetary Fund (IMF) has agreed to lend Bangladesh $4.5 billion in loans in seven instalments, Finance Minister AHM Mustafa Kamal has said.
"We are getting the loan the way we wanted. A total of $4.5 billion will be lent to Bangladesh," he told media during a briefing in Dhaka on Wednesday.
The amount will be disbursed in seven instalments till December 2026, he said adding, “The first instalment will be cleared in February next year."
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"Interest rate of the loan will depend on the market rate at the time of maturity,” he said.
The finance ministry has calculated that the rate would be around 2.2 per cent, he added.
"IMF has advised to reduce non-performing loans and increase revenue collection," the minister added.
The end-of-mission press release from IMF includes a statement from Rahul Anand, the Mission Chief for Bangladesh, Asia and Pacific Department. It outlines a program put together by the Bangladesh authorities supported by the IMF as part of the loan agreement. The key elements are as follows:
Creating additional fiscal space
Higher revenue mobilisation and rationalisation of expenditures will allow increasing growth-enhancing spending. The impact on the vulnerable will be mitigated by higher social spending and better-targeted social safety net programs.
Containing inflation and modernising the monetary policy framework
The monetary stance will be guided by the inflation outlook. Monetary policy modernisation will promote macroeconomic stability and improve policy transmission. Increased exchange rate flexibility will help buffer external shocks.
Strengthening the financial sector
Reducing financial sector vulnerabilities, strengthening oversight, enhancing governance and the regulatory framework, and developing capital markets will help mobilise financing to support growth objectives.
Boosting growth potential
Creating a conducive environment to expand trade and foreign direct investment, deepening the financial sector, developing human capital, and improving governance to enhance the business climate will lift growth potential.
Building climate resilience
Strengthening institutions and creating an enabling environment will help meet climate objectives, support large-scale climate investments, and help mobilise additional climate financing.
