Bangladesh has sought a $4.5bn loan from the International Monetary Fund, according to the country’s Daily Star newspaper. The newspaper reported Bangladesh has joined South Asian neighbours Pakistan and Sri Lanka in seeking help to cope with mounting pressure on their economy.
Bangladesh has sought the funds for its balance of payment and budgetary needs, as well as for efforts to deal with climate change. It is said that Finance Minister A H M Mustafa Kamal wrote to IMF Managing Director Kristalina Georgieva on July 24.
Bangladesh Bank recently announced that the import of luxury products, fruits, non-cereal foods, canned goods, and processed foods would be discouraged as a policy to preserve dollars.
The bank’s foreign exchange reserves decreased from $45.5 billion a year earlier to $39.67 billion as of July 20. This amount is still enough to cover imports for more than five months.
According to central bank data, Bangladesh’s July to May current account deficit was $17.2bn, compared with a deficit of $2.78bn in the year-earlier period. In the first 11 months of the fiscal year that ended on June 30, imports jumped 39% but exports grew only 34%.
Shamsul Alam, junior planning minister, said that authorities were grappling with a crisis because of rising international fuel prices after the Russian attack on Ukraine. “Our balance of payments is in the negative zone. We need to stabilize our exchange rate,” he said.
Alam said the government had rolled out austerity measures in addition to electricity rationing, including import curbs and cuts to development spending.