By Ummul Idris
The International Monetary Fund (IMF) has approved a package worth 4.7 billion U.S. dollars to support Bangladesh’s economy.
Bangladesh’s Finance Minister AHM Mustafa Kamal stated this in a statement on Tuesday in Dhaka, following the IMF approval of the package at a meeting in Washington.
The South Asian country was hit hard by global inflation amid Russia’s war on Ukraine.
“The approval of the IMF’s financial support once again, proved that the basic foundation of Bangladesh’s macro economy is standing on a strong footing compared to that of many other countries.”
The lender would provide Bangladesh with financial support worth 3.3 billion U.S. dollars under its Extended Credit Facility (ECF) and Extended Fund Facility (EFF), and 1.4 billion dollars under the Resilience and Sustainability Facility (RSF).
The 42-month programme would help preserve macroeconomic stability, protect the vulnerable, and foster inclusive and green growth, the IMF statement said.
“This approval enables the immediate disbursement of about 476 million dollars,” it added.
Bangladesh sought the IMF’s support as its economic recovery from the coronavirus pandemic and was jolted by Russia’s war in Ukraine.
That led to a sharp widening of the current account deficit, currency depreciation and a decline in foreign exchange reserves.
In November, the IMF provisionally agreed to provide the support.
Bangladesh’s finance minister told media at that time that the loan’s first instalment would be available by February and the last one by 2026.
With a five-year grace period, the loan would be repaid in the following 10 years, the agreement stipulates.
Referring to the pandemic and the war in Ukraine, IMF’s deputy managing director Antoinette Sayeh said in a statement that multiple shocks had made Bangladesh’s macroeconomic management challenging.
“While confronting challenges resulting from the global headwinds, the authorities need to accelerate their ambitious reform agenda to achieve a more resilient, inclusive, and sustainable growth,” she said.