Just a few days after approving a $1.3 billion loan for Bangladesh, the International Monetary Fund on Friday imposed new conditions as part of its $5.5 billion lending programme. Earlier this week, the IMF approved the release of the third and fourth tranches of the loan package worth $1.3 billion.

In a press statement, the IMF confirmed that the funds were deposited into Bangladesh’s account yesterday.

Bangladesh’s financial problems began after former prime minister Sheikh Hasina was removed from power last year and an interim government was set up under Chief Advisor Muhammad Yunus. The economic situation did not improve much because of ongoing political unrest, strict financial policies, rising trade restrictions, and growing pressure on the banking sector.

As per the IMF’s latest programme report, the updated terms require Bangladesh to bring down its external payment arrears in the power and fertiliser sectors from $870 million in June 2025 to $562 million by December, and then to $254 million by June 2026.

In addition to this, domestic arrears in the same sectors must also be reduced from Tk 28000 crore in June to Tk 14070 crore by December, and completely cleared by June 2026.

"External payment arrears have emerged, particularly in the power sector state-owned enterprises, fuelled by constrained foreign exchange availability and outstanding domestic subsidy arrears of the central government due to SOEs," said the global lender.

The IMF stated that while the current account showed some improvement in the first half of the 2025 financial year, the overall external economic situation has worsened. It warned about the rise in arrears among state-owned enterprises,  a "considerable fall in FDI flows". Furthermore, the large unrecorded capital outflows are expected to widen the external financing gap to $3.8 billion in the financial year 2025, which is much more than earlier estimates.

The revenue collection target for the National Board of Revenue has also been raised to Tk 443530 crore by June 2025 and Tk 550700 crore by June 2026.

At the same time, the country’s net international reserves must increase from 17.4 billion dollars to 22.41 billion dollars by the middle of 2026.