IMF says it is ready to support Bangladesh after loan request

Garment personnel come out of a factory for the duration of the lunch crack as factories stay open inspite of a countrywide lockdown, in Dhaka, Bangladesh, July 6, 2021. REUTERS/Mohammad Ponir Hossain

DHAKA, July 27 (Reuters) – The Intercontinental Financial Fund (IMF) said on Wednesday it would examine with Bangladesh its loan ask for soon after the country grew to become the third in South Asia to find these kinds of support right after Pakistan and Sri Lanka.

Bangladesh’s $416 billion overall economy has been one of the speediest-developing in the world for several years, but climbing electricity and meals selling prices since of the Russia-Ukraine war have inflated its import monthly bill and the existing account deficit.

The IMF explained Bangladesh was interested in its new Resilience and Sustainability Facility aimed at serving to countries deal with local climate-adjust challenges and experienced also asked for negotiations for an “accompanying IMF programme”.

“The IMF stands ready to support Bangladesh, and the team will engage with the authorities on plan design as per the founded insurance policies and procedures of the Fund,” an IMF spokesperson said. “The quantity of assistance will be section of the software layout discussions.”

Before in the working day, Bangladesh’s finance minister told reporters the authorities would take an IMF loan only if situations are favourable and mentioned the country’s macroeconomic conditions had been good.

“If the IMF circumstances are in favour of the region and compatible with our progress policy, we are going to go for it, if not not,” Minister A.H.M. Mustafa Kamal said. “Searching for a bank loan from the IMF does not signify Bangladesh’s overall economy is in terrible shape.”

The IMF’s resilience and sustainability have confidence in caps resources at 150% of a country’s quota or, in Bangladesh’s circumstance, a greatest of $1 billion. browse additional

Bangladesh’s Each day Star newspaper noted on Tuesday that general, the state wished $4.5 billion from the IMF, like for budgetary and harmony-of-payment support. examine additional

The country’s economic mainstay is its export-oriented garments market, which is bracing for a slowdown as crucial prospects like Walmart are saddled with backlog as inflation forces men and women to prioritise essentials. examine much more

Immediately after clothes, remittances are the next highest source of international forex for Bangladesh, a country of nearly 170 million individuals.

Its overseas trade reserves fell to $39.67 billion as of July 20 – ample for just in excess of 5 months value of imports – from $45.5 billion a calendar year before.

Its July to May perhaps present-day account deficit was $17.2 billion, compared with a deficit of $2.78 billion in the calendar year-previously period of time, as its trade deficit widened and remittances fell.

Supplemental reporting and writing by Krishna N. Das Editing by Kim Coghill and David Holmes

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