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Bangladesh Reportedly Becomes Third South Asian Country to Approach IMF for Bailout
Bangladesh Reportedly Becomes Third South Asian Country to Approach IMF for Bailout
Sputnik International
Bangladeshi Prime Minister Sheikh Hasina this week slammed critics for claiming that the country was headed towards a Sri Lanka-like economic crisis. “Let them... 26.07.2022, Sputnik International
2022-07-26T12:28+0000
2022-07-26T12:28+0000
2022-07-26T12:29+0000
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Bangladesh’s Finance Minister Mustafa Kamal has formally requested that the International Monetary Fund (IMF) provide the country with a bailout package of $4.5 billion, the Daily Star reported on Tuesday, based on documents accessed by the publication.According to a loan request made by Kamal to IMF’s Managing Director Kristina Georgieva on July 24 (Sunday), Bangladesh has sought financial assistance mainly for the purposes of averting a balance of payments (BoP) crisis as well as to “mitigate” the effects of climate change.The South Asian country, which the United Nations (UN) has projected will graduate from the United Nations’ (UN) Least Developed Countries (LDC) list in 2026, has faced a rising bill for imports, spurred by rising commodity prices, as a consequence of Western sanctions against Moscow over its special military operation in Ukraine.Bangladesh has become the third South Asian nation after Sri Lanka and Pakistan to approach the Washington-based lender for a bailout. Like in Bangladesh, the economic crisis in the other two countries had been precipitated by the depletion of forex reserves and a widening current account deficit (CAD) owing to rising commodity prices, which has hampered post-COVID economic recovery.While the IMF has approved a tranche of $1.1 billion for Pakistan as part of an Extended Financing Facility (EFF), the Western lender is also in negotiations with crisis-hit Sri Lanka for a bailout package reportedly to the tune of $3 billion.As per official data, Bangladesh’s imports between last July and May this year stood at $81.5 billion, marking a 39 percent increase from the previous year. The Current Account Deficit, or the difference between the overall expenditure and revenue, has increased by more than six times in the 11 months of fiscal year 2021-22.The Bangladeshi Finance Minister has reportedly highlighted to the IMF that the current forex reserves of $39.7 billion, as of July 20 , are only sufficient to meet the import bill of just over five months. The forex reserves at around the same time last stood at the $45 billion mark.Further, the central bank has reported an a nine-month high inflation rate of 7.56 percent for June, more than the average inflation of 6.15 percent for 2021-22.Bangladesh’s Finance Ministry officials have told the publication that $1.5 billion of the $4.5 billion package sought from the IMF would be “interest-free”, while the remaining sum would carry an interest of less than two per cent.An IMF delegation is expected to visit Bangladesh in September to finalise the terms of the bailout agreement, the report said.Want to know more? Check out our Koo & Telegram accounts!Koo: https://www.kooapp.com/profile/sputniknewsSputnik India: https://t.me/sputniknewsindia
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bangladesh, sri lanka, pakistan, sheikh hasina, imf
bangladesh, sri lanka, pakistan, sheikh hasina, imf
Bangladesh Reportedly Becomes Third South Asian Country to Approach IMF for Bailout
12:28 GMT 26.07.2022 (Updated: 12:29 GMT 26.07.2022) Bangladeshi Prime Minister Sheikh Hasina this week slammed critics for claiming that the country was headed towards a Sri Lanka-like economic crisis. “Let them say that everything will be ruined. But we are doing our tasks to move Bangladesh forward,” Hasina stated.
Bangladesh’s Finance Minister Mustafa Kamal has formally requested that the International Monetary Fund (IMF) provide the country with a bailout package of $4.5 billion, the Daily Star reported on Tuesday, based on documents accessed by the publication.
According to a loan request made by Kamal to IMF’s Managing Director Kristina Georgieva on July 24 (Sunday), Bangladesh has sought financial assistance mainly for the purposes of averting a balance of payments (BoP) crisis as well as to “mitigate” the effects of climate change.
The South Asian country, which the United Nations (UN) has projected will graduate from the United Nations’ (UN) Least Developed Countries (LDC) list in 2026, has faced a rising bill for imports, spurred by rising commodity prices, as a consequence of Western sanctions against Moscow over its special military operation in Ukraine.
Bangladesh has become the third South Asian nation after Sri Lanka and Pakistan to approach the Washington-based lender for a bailout.
Like in Bangladesh, the economic crisis in the other two countries had been
precipitated by the depletion of forex reserves and a widening current account deficit (CAD) owing to rising commodity prices, which has hampered post-COVID economic recovery.
While the IMF has approved a tranche of
$1.1 billion for Pakistan as part of an Extended Financing Facility (EFF), the Western lender is also in negotiations with crisis-hit Sri Lanka for a bailout package reportedly to the tune of $3 billion.
As per official data, Bangladesh’s imports between last July and May this year stood at $81.5 billion, marking a 39 percent increase from the previous year.
The Current Account Deficit, or the difference between the overall expenditure and revenue, has increased by more than six times in the 11 months of fiscal year 2021-22.
The Bangladeshi Finance Minister has reportedly highlighted to the IMF that the current forex reserves of $39.7 billion, as of July 20 , are only sufficient to meet the import bill of just over five months. The forex reserves at around the same time last stood at the $45 billion mark.
Further, the central bank has reported an a nine-month high inflation rate of 7.56 percent for June, more than the average inflation of 6.15 percent for 2021-22.
Bangladesh’s Finance Ministry officials have told the publication that $1.5 billion of the $4.5 billion package sought from the IMF would be “interest-free”, while the remaining sum would carry an interest of less than two per cent.
An IMF delegation is expected to visit Bangladesh in September to finalise the terms of the bailout agreement, the report said.
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