To address the country's macroeconomic crisis, Bangladesh received the first installment of a loan from the International Monetary Fund (IMF) in January 2023. The country is now expected to receive the fourth and fifth installments of the $4.7 billion loan in June— provided it meets certain conditions set by the IMF.
A key requirement is the elimination of all forms of tax exemptions to boost revenue collection. The IMF has also emphasised the need for broader reforms under the loan agreement.
During their visit earlier this month, the IMF delegation held meetings with top officials from the Ministry of Finance, the National Board of Revenue (NBR), and other key government institutions. On the final day of the visit, they met with Dr Ahsan H Mansur, Governor of Bangladesh Bank.
Following the meeting, IMF representatives expressed satisfaction with the country's progress in adopting a market-based exchange rate and noted the improvement in foreign currency reserves. However, they stressed that removing tax exemptions is critical for continued support.
The IMF also commended Bangladesh for reducing inflation despite global economic headwinds, but warned that the country still faces significant economic challenges ahead.
Among the key conditions for the loan are increased revenue mobilisation, a market-determined exchange rate, and maintaining a healthy level of net foreign reserves. While the IMF showed some flexibility during the first three review phases, it has taken a firmer stance during the current and fourth review.
