DHAKA — The International Monetary Fund
(IMF) said Wednesday it reached a preliminary agreement to provide Bangladesh
with a $4.5 billion support package to help it cope with soaring energy and
food prices.
اضافة اعلان
Bangladesh in common with other Asian economies has
been hit hard by the sharp rise in prices in the wake of Russia’s invasion of
Ukraine, prompting angry street protests.
The South Asian nation of around 170 million people
approached the IMF earlier this year for support.
An IMF delegation and Dhaka representatives “reached
a staff-level agreement to support Bangladesh’s economic policies” with a total
of $4.5 billion under various facilities, the institution said in a statement,
adding the deal was subject to IMF management approval.
Bangladesh plans to use the IMF loan to prop up its
foreign exchange reserves, which have nosedived from $46 billion to $34
billion.
The Bangladeshi taka has depreciated some 25 percent
against the US dollar in recent months, while according to official figures
inflation has approached 10 percent — but independent economists say the true
figure is closer to 20 percent.
Household budgets have been hit hard and the
government has pledged to cap the price of several staple foods, including
rice, to quell public discontent.
“Bangladesh’s robust economic recovery from the
pandemic has been interrupted by Russia’s war in Ukraine, leading to a sharp
widening of the current account deficit, rapid decline of foreign exchange
reserves, rising inflation and slowing growth,” said IMF team leader Rahul
Anand.
“Even as Bangladesh tackles these immediate
challenges, addressing long-standing structural issues remains critical,
including threats to macroeconomic stability from climate change,” he added.
The depreciating currency and dwindling foreign
exchange reserves have left Bangladesh unable to import sufficient fossil
fuels.
Bangladesh’s
precarious financial position was compounded this year by unprecedented floods
in the northeast, inundating the homes of more than seven million people and
causing nearly $10 billion in damage, according to government estimates.
Bangladesh hopes to graduate from Least Developed
Country status and become a “middle-income” nation by 2031.
The current administration has put together a
program, which the IMF said it supports, to achieve the goal, as well as
measures to contain inflation, change its monetary policy framework, and
strengthen the financial sector.
Bangladesh will also support large-scale climate
investments and seek additional climate financing.
Elsewhere in the region, Sri Lanka has also sought a
bailout from the IMF, its economic crisis — which saw its president ousted by
street protests — exacerbated by the global rise in energy and food prices.
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