The International Monetary Fund (IMF) has agreed to provide $1.15 billion to Bangladesh in the third instalment under its multi-billion-dollar loan programme.

An IMF team reached a staff-level agreement with the government of Bangladesh on the policies needed to complete the second review under the ECF/EFF/RSF arrangements, the global lender said in a press release today.

The staff-level agreement is subject to approval by the Executive Board of the Washington-based lender, which is expected in the coming weeks.

Completion of the second review will make available about $932 million, under the Extended Credit Facility (ECF)/Extended Fund Facility (EFF) and about $220 million under the Resilience and Sustainability Facility (RSF). This means upon the board's approval, Bangladesh will have access to about $1.15 billion.

The third installment comes as the mission team led by Chris Papageorgiou concluded its 15-day visit to Bangladesh today. During the visit, it discussed economic and financial policies in the context of the second review of the programme.

"The authorities have made significant progress on structural reforms under the IMF-supported programme, including the implementation of a formula-based fuel price adjustment mechanism for petroleum products," said Papageorgiou in a statement.

"Nonetheless, larger-than-expected spillovers from tightening of global financial conditions, and still elevated international commodity and food prices, coupled with domestic vulnerabilities, has led to persistently high inflation and declining foreign exchange (FX) reserves. This has exacerbated pressures on the economy and heightened the complexity of macroeconomic challenges."