The International Monetary Fund (IMF) has accepted loans of $4.7 billion to Bangladesh for disbursal beginning instantly, making it the primary to safe such funds out of three South Asian international locations that utilized final 12 months amid financial bother.
The loans are a win for Prime Minister Sheikh Hasina forward of a common election early subsequent 12 months and can assist the nation, which has seen a pointy widening of its present account deficit, depreciation of the taka forex and a decline in its international alternate reserves.
Bangladesh will get about $3.3 billion beneath the IMF’s prolonged credit score facility and associated preparations, with a right away disbursement of about $476 million. The IMF government board additionally accepted about $1.4 billion beneath its newly created Resilience and Sustainability Facility for local weather investments for Bangladesh, the primary Asian nation to entry it.
The IMF stated the loans will “protect macroeconomic stability and rebuild buffers, while helping to advance the authorities’ reform agenda.” The agenda consists of creating fiscal house to allow better social and developmental spending, strengthening Bangladesh’s monetary sector, boosting fiscal and governance reforms and constructing local weather resilience.
“Since independence, Bangladesh has made steady progress in reducing poverty and significant improvements in living standards,” Antoinette M. Sayeh, the IMF’s deputy managing director, stated in a press release.
“However, the COVID-19 pandemic and subsequent Russia’s war in Ukraine interrupted this long period of robust economic performance,” Sayeh added. “Multiple shocks have made macroeconomic management challenging in Bangladesh.”
The nation final 12 months additionally sought $2 billion from the World Bank and the Asian Development Bank amid efforts to bolster its international alternate reserves.
Bangladesh’s regional counterparts, Sri Lanka and Pakistan, are doing a lot worse economically however haven’t been in a position to get closing approval for IMF loans.
Bangladesh’s present account deficit hit a report $18.7 billion within the final monetary 12 months, which ended on June 30, as exports of clothes did not offset a surge in vitality prices. The Bangladesh central financial institution expects the deficit to fall to about $6.8 billion on the finish of the present fiscal 12 months.
The authorities has additionally raised gasoline and vitality costs in current months because it approached the IMF. It introduced a 5% enhance in retail energy costs from Wednesday, the second such rise this month.
Source: www.dailysabah.com
