Govt receives $1.96b foreign loan in June

The Bangladesh government had a plan to borrow $2.619 billion in FY24 from international lenders and development partners as budget support to overcome the ongoing economic headwinds.

Of this amount, the country has already received $1.969 billion, and another $650 million will arrive this June, according to a number of finance ministry sources.

Insiders say the government is trying to get foreign loans released from lenders to meet the net reserves position of $14.769 billion by June 30, as per the International Monetary Fund (IMF) conditions.

According to Bangladesh Bank data, the gross reserves position stood at $24.783 billion on June 20, and this position was $19.527 billion as per the IMF’s BPM6 method.

Experts however believe that the net reserve position is less than $14.769 billion as per IMF conditions. So the government wants to increase the reserves to $14.769 billion by June 30.

Finance ministry sources say in the last 15 days the government received $250 million from the ADB, $1,150 million from IMF, $524 million from World Bank, $100 million from Korea International Cooperation Agency (KOICA), and €43 million from Agence Française de Développement (AFD).

Meanwhile, on Wednesday, the Asian Infrastructure Investment Bank (AIIB) approved a $400 million loan for Bangladesh, which will be disbursed by June 30.

In addition, the government is trying its best to get a loan of €60 million from the EU, another $40 million from ADB, and $45 million from AFD.

Speaking to The Business Post on condition of anonymity, a senior finance ministry official said, “We are optimistic about receiving those loans by the end of this month (June). If received on time, we will be able to meet the forex reserves target set by the IMF.”

According to Economic Relations Division (ERD) sources, for the second time in a single fiscal year, the government is now receiving more than $2 billion as budget support from development partners. The amount was $2.597 billion in FY22.

According to IMF sources, the reserve target is $14.885 billion at the end of September this year, and $15.300 billion at the end of December. Besides, such a target was set at $16.601 billion at the end of March 2025 and $19.440 billion at the end of June in 2025.

It should be noted that the Bangladesh Bank does not reveal the exact amount of the country’s net reserves. As a result, it remains unknown how low the country's reserves actually are compared to the IMF's new target.

The IMF has given a detailed plan on how Bangladesh will increase its reserves in the coming days.