The International Monetary Fund (IMF) mission and the Bangladesh authorities have reached staff-level agreement on the policies needed to complete in the first review for $681 million in the second instalment of its $4.7-billion loan.

"The Bangladesh authorities and IMF staff conducted discussions for the 2023 Article IV consultation and reached staff-level agreement on the policies needed to complete the first review under the ECF/EFF/RSF arrangements," the global lender said in a statement today.

The IMF issued the statement after concluding its first review through a series of meetings with the stakeholders of Bangladesh.

"The staff-level agreement is subject to IMF Management approval and Executive Board endorsement, which is expected in the coming weeks."

It also said, "Completion of the first review will make available about US$ 462 million (SDR352.35 million equivalent of 33 percent of quota) under the ECF/EFF and about US$ 219 million (SDR166.67 million equivalent of 15.8 percent of quota) under the RSF."

The IMF staff welcomes the progress of reform implementation and the authorities' continued commitment to undertake decisive policy actions, amid a challenging environment, according to the statement.

"The authorities have made substantial progress on structural reforms under the IMF-supported program, but challenges remain. Continued global financial tightening, coupled with existing vulnerabilities, is making macroeconomic management challenging, putting pressures on the Taka and FX reserves," the IMF said.

It said further monetary tightening, supported by neutral fiscal policy, and greater exchange rate flexibility, is needed to restore near-term macroeconomic stability.

The IMF program will continue to support the authorities' efforts to preserve macroeconomic stability and protect the vulnerable, while accelerating economic reforms and delivering on the climate agenda.

Earlier in January, the IMF approved a $4.7 billion loan for Bangladesh to support the country's economic policies in a development that is expected to calm the jitters surrounding the health of the Bangladesh economy.