Bangladesh: Foreign Reserves Slump, Seeks Loan of $4.5bank From IMF
New Delhi: The Bangladesh Official on Tuesday said the country asked the International Monetary Fund for support in riding out a financial shock triggered by volatile energy prices after the Russian invasion of Ukraine.
The South Asian nation has experienced lengthy blackouts in recent weeks, sometimes for up to 13 hours a day, as utilities struggle to source enough diesel and gas to meet demand. Tens of thousands of mosques around the country have been asked to curtail their use of air conditioners to ease pressure on the electricity grid, with power shortfalls compounded by a depreciating currency and dwindling foreign exchange reserves.
“Dhaka had sought an IMF credit line,” said a senior finance ministry official on condition of anonymity.
Local newspaper the Daily Star reported that Bangladesh was seeking $4.5 billion dollars from the Washington-based lender following a recent visit to the country by its representatives.
Junior planning minister Shamsul Alam said, “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.”
According to the media report, Known for its big garment-exporting industry, Bangladesh has sought the funds for its balance of payment and budgetary needs, as well as for efforts to deal with climate change, citing documents it had seen.
However, Several South Asian nations are struggling with galloping inflation and deteriorating public finances triggered by global economic headwinds. Nearby Sri Lanka is currently in negotiations for an IMF bailout after running out of foreign currency to import even its most vital essentials, triggering long queues at petrol stations, food shortages, and lengthy power cuts.
Angry crowds in the island nation stormed the president’s official residence earlier this month, prompting the leader to flee abroad and tender his resignation.
(Vinayak)
