Third tranche of IMF loan likely to be released after 23 June 

In this file photo taken on 15 April 2020 a sign is seen outside the headquarters of the International Monetary Fund (IMF) in Washington, DC.AFP File Photo

The International Monetary Fund (IMF) is expected to discuss the disbursement of the third installment of a $4.7 billion loan to Bangladesh in an executive council meeting on 23 June, say the finance division sources.

The executive council is likely to clear the way for the installment, while it is likely to be disbursed to Bangladesh within the month.

The third tranche amounts to $1.15 billion, which is higher than the combined total of the previous two installments – over $1 billion – received under the loan programme.

Earlier, the IMF’s executive director, Krishnamurthy V Subramanian, held a meeting with the finance minister, Abul Hassan Mahmood Ali, at the secretariat on 26 May.

Following the meeting, the minister quoted the IMF official as saying that Bangladesh is now on the right track and the third tranche would be disbursed by June.

Prior to that, Chris Papageorgiou, the chief of the development macroeconomics division in the IMF’s research department, conducted a two-week review on the loan programme in Bangladesh.

At a press briefing at the secretariat on 8 May, he underscored the need for Bangladesh to diversify its trade and attract more foreign direct investment (FDI) to transition to an upper middle-income country by 2031.

He also laid emphasis on improving the business environment, enhancing good governance, and prioritising tax collection.

The IMF predicted a GDP growth of 5.4 per cent for the current financial year, with a potential rise to 6.6 per cent in the fiscal year 2024-25.

In its observation, the lending agency noted that the macroeconomy would gradually be sustainable and the pressure on foreign currency would be relaxed, leading to an increase in imports.

Bangladesh could not meet any of the quarterly targets for forex reserves set by the IMF since the beginning of the loan programme. Repeated failure to meet the targets gave rise to concerns regarding the disbursement of the third installment.

However, the IMF recently revised down the reserve target following an appeal from the Bangladesh side.