IMF continues talks, update down the road: Srinivasan on loan release

The International Monetary Fund (IMF) is holding continuous discussions with Bangladesh over the release of the remaining tranche of its ongoing loan programme, Krishna Srinivasan, director of the IMF's Asia and Pacific Department, has said.

"The [IMF] team is negotiating and is having continuous discussions with the [Bangladesh] authorities, and we will have an update down the road," he said at a press briefing in Washington, DC, on 16 April, replying to a queries including that over Bangladesh's due loan instalment. 

Srinivasan said Bangladesh's revenue base remains weak by global standards, limiting the government's capacity to provide support at a time of rising economic pressure.

"People are hurting in Bangladesh, so it is even more important to use whatever resources you have to make it as targeted as possible," he said.

He added that improving revenue collection and addressing structural issues in the financial sector are critical for sustaining growth in both the short and long term.

Srinivasan also highlighted the impact of the global energy shock, noting that Bangladesh, as a major energy importer, remains vulnerable to price volatility in international markets.

"Like other countries in Asia, Bangladesh is also affected by the energy shock," he said. "We are working with the authorities in terms of policy support and programmes, and discussions are ongoing. We will have to wait and see how things pan out."

He said continued engagement between the IMF and Bangladesh will determine the outcome of the negotiations, as the country also explores options for additional external financing.

Under the $5.5 billion IMF programme, disbursements are typically made in June and December. However, the lender withheld the fifth tranche in December to engage with the newly elected government. At the time, then finance adviser Salehuddin Ahmed said $1.3 billion from two tranches could be released together in June.

Srinivasan visited Bangladesh in March and met Prime Minister Tarique Rahman and Finance Minister Amir Khosru Mahmud Chowdhury. After the meetings, the finance minister said the combined tranches were likely in June and that detailed talks would follow at the IMF Spring Meetings in April.

However, no decision has been made even after the meetings, according to a statement issued by the Bangladesh Press Wing. The finance minister also said several issues remain unresolved, with further discussions expected over the next 15 to 20 days.