The International Monterey Fund will start a weeklong mission in Dhaka to negotiate over an extra $3 billion loan sought by the interim government in budget support.
A $4.7 billion loan programme, negotiated by the immediate past political regime that was ousted in a student-led mass uprising, has been continuing since 2023.
The IMF has already disbursed around $2.3 billion.
Finance ministry officials said that accommodation of an extra $3 billion would take some major changes in the current loan programme.
Led by Mission Chief for Bangladesh Chris Papageorgiou, the IMF team will meet with finance adviser Salehuddin Ahmed at the secretariat today.
The meeting is expected to fix the modalities of the changing loan programme.
Finance ministry officials said that the visiting IMF mission was likely to give fresh emphasis on increasing power tariffs to clear arrears and reduce subsidies.
Earlier, the finance ministry officials calculated the power subsidy at Tk 35,000 crore in FY25 because of overcapacity by around 50 per cent.聽
Besides, pressure on subsidies will persist because outstanding arrears are set to cross Tk 45,000 crore.
In the FY24, around Tk 35,000 crore has been allocated for power subsidy from Tk 17,000 crore in FY23.
The lender will also ask the interim government to generate more revenue to improve the tax-GDP ratio called one of the lowest in the world.
Besides, the IMF will want the government to restrict borrowing to keep the budget deficit at a tolerable level, said the finance ministry officials.
On August 29, the finance adviser asked for an extension of the current loan programme during an online meeting with the IMF.
On August 7, the IMF said that it would continue its ongoing $4.7 billion loan programme in Bangladesh despite the student-led mass uprising when Sheikh Hasina resigned as prime minister and fled to India on August 5.
The IMF was deeply saddened by the loss of lives and injuries in the countrywide student protests that initially began demanding the reform of the quota system in government jobs. About 650 people were killed during the student protests between July 16 and August 11.
The IMF, however, will continue to support the efforts to ensure economic stability and deliver inclusive growth.
The next tranche is due in November this year.