BD seeks US Treasury support, IMF co-op to steady economy

Bangladesh is seeking US Treasury support and closer cooperation with the International Monetary Fund (IMF) to stabilise its strained economy, tackle structural weaknesses and restore investor confidence, with the government expecting progress on proposed assistance within the next two to three months.

Finance Minister Amir Khosru Mahmud Chowdhury met IMF Deputy Managing Director Nigel Clarke on the sidelines of the World Bank and IMF Annual Meetings in Bangkok, Thailand, to discuss the country's economic situation and reform priorities. Separately, the Bangladeshi delegation held talks with US Treasury officials, who assured cooperation to help the country navigate its economic challenges.

Following the meeting with US Treasury officials, the Bangladeshi side said the department had assured the country of all possible cooperation to help maintain economic stability and tackle the ongoing crisis. The government hopes to receive further progress and assurances regarding this support within the next two to three months.

However, no specific amount, financing package or detailed implementation timeline for the proposed US assistance has been announced. The nature and scope of the cooperation are  expected to become clearer as discussions progress.

The meetings come at a challenging time for Bangladesh, which is grappling with persistent inflationary pressure, weaknesses in the banking sector, constraints on revenue mobilisation and the need to strengthen the investment climate. The government is looking to combine international cooperation with domestic structural reforms to restore confidence in the economy and establish a stronger foundation for sustainable growth.

The discussion with the IMF is particularly important as Bangladesh seeks to address its economic vulnerabilities while continuing reforms. Finance Minister Amir Khosru Mahmud Chowdhury's meeting with Deputy Managing Director Nigel Clarke provided an opportunity to discuss the country's economic conditions and reform priorities on the sidelines of the annual meetings.

Although the meeting has raised expectations of continued engagement, no final decision on a new IMF financing programme or a specific loan amount has been announced. The discussions should therefore be viewed as part of the broader process of engagement with international development partners rather than confirmation of any new financing arrangement.

The government is also emphasising the need to strengthen accountability in the financial sector, particularly in response to past irregularities and allegations of large-scale fund misappropriation. Adviser Professor Dr Rashed Al Mahmud Titumir has highlighted the cost of financial irregularities to ordinary citizens, arguing that those responsible for looting money from banks and other sectors must be held accountable.

According to Titumir, around $40 billion has been looted from the banking sector. He said ordinary Bangladeshis were paying a heavy price for the loss of funds that belonged to the people.

He also said the government would take initiatives to improve transparency in banks' financial statements and balance sheets and reform the necessary legal framework. Greater transparency and accountability are considered essential to addressing weaknesses in the financial system and preventing similar irregularities in the future.

The issue of banking sector accountability has wider implications for Bangladesh's economy. Weak governance, financial irregularities and a lack of transparency can undermine public confidence in banks, affect depositors' interests and constrain the flow of credit to productive sectors. Addressing these problems will require stronger oversight, improved financial reporting and effective enforcement of the law.

The government faces the additional challenge of determining responsibility for past irregularities while ensuring that banks can continue providing services to businesses and households. Strengthening governance and restoring confidence in financial institutions are therefore important not only for the banking sector but also for investment, employment and overall economic stability.

Revenue mobilisation is another major priority as Bangladesh seeks to strengthen its fiscal position. Titumir has highlighted the government's target of raising the tax-to-GDP ratio to 10 per cent by 2030. 

Achieving this goal would require broadening the tax base, improving the efficiency of tax administration and increasing transparency in the collection of public revenue.

A stronger domestic revenue base would give the government greater capacity to finance development expenditure and public services. It could also reduce pressure on public finances and help the country manage economic shocks more effectively. However, reaching the target will require sustained improvements in tax compliance, measures to curb tax evasion and greater efficiency in revenue administration.

Bangladesh's economic challenges are interconnected. Weaknesses in the banking sector can discourage investment and restrict credit, while limited revenue mobilisation can constrain the government's ability to respond to economic pressures. Persistent inflation also places pressure on household purchasing power and increases the difficulty of maintaining macroeconomic stability.

Against this backdrop, the government is seeking cooperation from international partners while pursuing domestic reforms. Engagement with the US Treasury Department, the IMF and the World Bank is intended to help Bangladesh address immediate economic pressures and strengthen the foundations for longer-term stability.

The US Treasury Department's assurance of cooperation is significant for the government's efforts to build international support. However, the practical impact will depend on the form that assistance takes, the progress of subsequent discussions and the measures agreed upon by the parties.

Meanwhile, reforms in the banking sector will remain central to efforts to restore confidence. Greater transparency in financial statements and balance sheets, stronger accountability for financial irregularities and reforms to the legal framework could help improve oversight and reduce opportunities for misconduct.

The recovery of funds allegedly misappropriated from banks is also an important issue. Ensuring accountability will require appropriate investigations, effective legal procedures and measures to establish responsibility. The government has stressed the importance of addressing past irregularities, although details of specific recovery measures and their implementation have not been provided in the information available from the meetings.

International support alone will not resolve Bangladesh's structural economic problems. The effectiveness of any assistance will depend partly on the government's ability to implement reforms, improve public financial management and strengthen institutions. Progress in these areas could help improve confidence among domestic and international investors and create better conditions for private sector activity.

The government's immediate expectation is that discussions with the US Treasury Department will produce further progress within two to three months. At the same time, engagement with the IMF and other international partners will continue as Bangladesh seeks to strengthen its economic position.

The broader challenge will be to translate assurances and discussions into practical outcomes while ensuring that domestic reforms deliver measurable improvements. Stronger banking sector governance, greater transparency, accountability for financial irregularities and improved revenue mobilisation will be essential to restoring confidence and building a more resilient economy.