A delegation from the International Monetary Fund (IMF) will today start reviewing the progress of reforms tied to two instalments of a $4.7 billion loan programme against the backdrop of the fourth instalment being deferred.

The delegation, scheduled to arrive last night, is slated to stay till April 17, according to the Ministry of Finance.

Last December, a mission arrived to review the progress of conditions regarding the fourth instalment, which was supposed to be disbursed in February.

However, the IMF deferred the disbursement to June as Bangladesh could not meet prior conditions relating to reforms to the National Board of Revenue (NBR) and Bangladesh Bank.

The visiting delegation is expected to meet Finance Adviser Salehuddin Ahmed today morning, a finance ministry official said. The team will hold a series of meetings with key government agencies to assess the status of various structural benchmarks under the loan conditions, Finance Division officials said.

During the visit, IMF officials will hold discussions with representatives from the Finance Division, the National Board of Revenue, Power Division, Power Development Board, Bangladesh Energy Regulatory Commission, and the Energy and Mineral Resources Division.

The review mission will conclude with a meeting between the IMF team and the finance adviser on April 17 followed by a press briefing.

The mission's focus will be on NBR reforms, subsidy management and the implementation of a market-based exchange rate.

The IMF has been seeking the implementation of a market-based exchange rate for a long time. However, economists believe such a move may create volatility in the foreign exchange market and pose difficulties in maintaining a healthy foreign exchange reserve.

The IMF delegation will also focus on reforms to the NBR as tax collection in Bangladesh is very low compared to the size of its gross domestic product, which adds pressure to the government's fiscal management.

Subsidies, which have been rising significantly in recent years, will also be among the key areas of focus.

The government's budgetary allocation for subsidies soared from around Tk 8,000-9,000 crore a few years ago to Tk 40,000 crore in the original budget for fiscal year 2024-25. In the revised budget for the same year, the subsidy allocation ballooned to Tk 62,000 crore.

As such, the IMF mission will place an emphasis on reducing it.

Finance Adviser Ahmed told journalists last week that he was hopeful the IMF would disburse two instalments in June. He was also optimistic that Bangladesh would be able to meet the prior conditions to avail the instalments by June.

The $4.7 billion loan programme was approved by the IMF in January 2023. So far, Bangladesh has received $2.3 billion in three tranches.