International Monetary Fund begins engagement on Bangladesh request for successor financial arrangement

In a statement by its mission chief for Bangladesh, the International Monetary Fund said the Bangladeshi authorities have requested a new IMF financial arrangement to support their economic reform program, and staff are engaging with them on reform priorities and possible next steps. The request is for a successor arrangement to the country’s current programs under the Extended Credit Facility, Extended Fund Facility and Resilience and Sustainability Facility. The Fund said those arrangements had served as an important policy anchor since their approval in January 2023, but Bangladesh now faces a materially changed macroeconomic and political environment. It identified banking-sector weaknesses and low revenue mobilization as key reform challenges. Any new arrangement would need to reflect Bangladesh’s balance-of-payments needs, the objectives and priorities of the new authorities, and strong policy commitments anchored by a credible reform agenda, and it would remain subject to IMF policies and Executive Board approval. The next step is a planned staff visit to Bangladesh to review recent economic developments, discuss policy priorities and assess the outlook and reform challenges. The size of any new program and the related reform commitments would be discussed later in a subsequent program negotiation mission.