IMF agrees $4.5 billion loan for Bangladesh to combat economic crisis

The amount will be disbursed in seven installments till December 2026.

Bangladesh and the IMF on Wednesday reached a preliminary agreement under which the global lender will provide a $4.5 billion support package to stabilise its economy and protect the vulnerable people.

The IMF agreement came months after discussions between the global lender and Bangladesh officials.

Bangladesh is the third South Asian nation after Sri Lanka and Pakistan to secure a bailout package from the IMF to tide over the sharp rise in food and energy prices caused by the coronavirus pandemic and the global inflation due to the Russia-Ukraine war.

The amount will be disbursed in seven installments till December 2026. The first installment of $447.48 million will be cleared in February next year, while the loan's interest rate would depend on the market rate at the time of maturity, Finance Minister A.H.M. Mustafa Kamal told a news briefing after the signing of the agreement in Dhaka.

Finance ministry officials calculated the interest rate to be around 2.2%.

"We are getting the loan just the way we wanted. The International Monetary Fund will lend us a total of $4.5 billion," Mr. Kamal said.

The deal is subject to approval by the IMF's executive board, which is expected within weeks.