The International Monetary Fund (IMF) provisionally agreed a $4.5-billion support programme on Wednesday for Bangladesh, with the country’s finance minister saying the deal would help prevent economic instability escalating into a crisis.
Bangladesh’s $416-billion economy has been one of the world’s fastest growing for years. But rising energy and food prices, sparked by Russia’s invasion of Ukraine, along with shrinking foreign exchange reserves, have swelled its import bill and current account deficit.
On Wednesday it became the third South Asian nation to secure a “staff-level agreement” with the IMF for loans this year, after Pakistan and Sri Lanka.
“The heat of the global economy has affected our economy to some extent,” Finance Minister A.H.M. Mustafa Kamal told reporters after the IMF announcement. “We requested the IMF loan as a precautionary measure to ensure that this instability does not escalate into a crisis.”
The Fund said a “staff-level agreement” had been reached for a 42-month arrangement, including about $3.2 billion from its Extended Credit Facility (ECF) and Extended Fund Facility (EFF), plus about $1.3 billion from its new Resilience and Sustainability Facility (RSF)