IMF to begin fifth review for $5.5b loan

• IMF begins fifth loan review in Dhaka
• Sixth tranche hinges on revenue shortfall
• Reserves, arrears targets met under programme
• Tranche release may wait until elections

The International Monetary Fund (IMF) is set to start its fifth review of the progress in implementing the conditions tied to the $5.5 billion loan given to Bangladesh, starting today.

The mission, which will stay in Dhaka for two weeks, will engage with key institutions—including the Ministry of Finance, Bangladesh Bank, and the National Board of Revenue—until November 13.

According to the IMF's schedule, if the review conditions are met, Bangladesh is expected to receive the sixth instalment of $450 million in January.

A senior finance ministry official confirmed that all mandatory conditions for the sixth tranche have been fulfilled, except for the revenue target.

However, during the World Bank-IMF Annual Meetings in Washington earlier this month, discussions with Bangladeshi authorities explored delaying the tranche release until after the national elections in February.

Officials suggest this will ease contention around condition implementation during the current review.

Krishna Srinivasan, director of the IMF's Asia and Pacific Department, emphasised the importance of fiscal reforms—particularly revenue mobilisation—and financial sector adjustments as central to the review process.

The IMF originally approved a $4.7 billion Extended Credit Facility (ECF) programme in January 2023.

In June 2025, it released the fourth and fifth tranches, added a six-month extension, and topped up the package by $800 million, bringing the total to $5.5 billion. To date, Bangladesh has received $3.6 billion.

To unlock the sixth tranche, Bangladesh must meet six Quantitative Performance Criteria (QPCs)—the most stringent IMF conditions.

Three of these were introduced in May. Bangladesh Bank data show net international reserves (NIR) reached $20.73 billion in June, exceeding the IMF's target of $17.4 billion.

In September, reserves remained above $20 billion against a target of $18.65 billion.

Under the previous government, Bangladesh repeatedly missed reserve targets as gross reserves fell from $48 billion.

Since the interim government took office in August 2024, reserve targets for December and March have been met.

Despite progress on reserves and arrears, Bangladesh missed its revenue collection target.

Against a goal of Tk 443,530 crore by June, actual revenue stood at Tk 378,000 crore.

The NBR, responsible for 97 percent of the target, collected Tk 370,874 crore with only 2.23 percent growth.

Bangladesh has met two new QPCs on arrears to state-owned enterprises (SOEs) in the energy and fertiliser sectors.

By June, foreign dues were reduced to $314 million (below the $870 million ceiling) and domestic arrears to Tk 18,000 crore (below the Tk 28,070 crore threshold).

Finance Adviser Salehuddin Ahmed stated last month that the government cleared $5 billion in foreign dues, including payments to Adani and Chevron, and $200 million in fertiliser import bills.

Of this, $3.5 billion was inherited from the previous administration, according to a senior finance ministry official.

On the domestic front, Tk 89,000 crore in subsidies were allocated last fiscal year to settle SOE arrears, funded by cuts to the Annual Development Programme and savings across other budget areas.