Dhaka: A staff-level agreement was achieved between Bangladesh and the International Monetary Fund (IMF) over the first assessment of a $4.7 billion bailout. This is a positive development for the cash-strapped country as it prepares for a general election in January.
Bangladesh’s $416-billion economy was one of the world’s fastest growing for years, but has recently struggled to pay for imported fuel as its dollar reserves have shrunk by more than a third due to costly imports following Russia’s invasion of Ukraine.
Completion of the first review, subject to IMF board approval, will make about $681 million in loans available to the country, the IMF said.
“The authorities have made substantial progress on structural reforms under the IMF-supported programme, but challenges remain,” the Fund said. “Continued global financial tightening, coupled with existing vulnerabilities, is making macroeconomic management challenging, putting pressures on the Taka and FX reserves.”
Out of the three South Asian countries that requested last year, Bangladesh was the first to get such money when the IMF granted $4.7 billion in loans in January, with an immediate delivery of approximately $476 million.
The central bank of Bangladesh hopes that the second loan tranche would be approved by the IMF board meeting on December 11, according to a spokesperson.
The country is battling stubbornly high inflation spurred by a spike in energy and food prices, along with a weakening currency.
