The International Monetary Fund (IMF) has eased its foreign exchange reserve requirements for Bangladesh, offering flexibility amid the country’s ongoing economic challenges.
Previously, the IMF set a target of maintaining minimum net reserves of $19.43 billion by the end of December 2026. That benchmark has now been reduced to $17.28 billion.
In addition, there was a condition to maintain $15.30 billion by the end of this December. As of last Monday, the reserves stood at $14.90 billion, which, according to an official from Bangladesh Bank familiar with the matter, will not impede the IMF’s disbursement of its next loan installment.
An IMF delegation recently concluded a review in Dhaka to assess progress on the conditions tied to Bangladesh’s $4.7 billion loan. The closing meeting of the team took place yesterday, during which the IMF highlighted key areas requiring attention.
The organization has urged Bangladesh to adopt a more market-based approach to determining exchange rates. To facilitate this, a new methodology for setting the exchange rate will be introduced soon. The IMF also recommended gradually phasing out the Tk 22,500 crore injected into weak banks to stabilize their operations. Additionally, it stressed that no new measures should be taken that would expand the money supply and exacerbate inflation.
In its recommendations, the IMF emphasized the need for a revamped monetary policy framework aimed at improving economic stability. This includes curbing inflationary pressures and ensuring better transparency in the financial sector.
Most of these measures are expected to be implemented by March 2025. Meanwhile, the IMF has also called for the timely publication of updated economic indicators and regulatory information to enhance financial oversight.
