Bangladesh Seeks $4.5Bn IMF Loan As Foreign Reserves Shrink

Bangladesh has sought a $4.5 billion loan from the International Monetary Fund, the media reported on Tuesday, joining South Asian neighbours Pakistan and Sri Lanka is seeking IMF support to cope with mounting pressure on their economies.

Bangladesh has sought the funds for its balance of payment and budgetary needs, as well as for efforts to deal with climate change, the media said, citing documents it had seen.

It said Finance Minister AHM Mustafa Kamal wrote to IMF Managing Director Kristalina Georgieva on Sunday.

Officials at the finance ministry and the local office of the IMF did not immediately respond to requests for comment.

The Bangladesh Bank recently announced a policy to preserve dollars by dissuading imports of luxury goods, fruits, non-cereal foods, and canned and processed foods.

The Bangladesh central bank’s foreign-exchange reserves fell to $39.67 billion as of July 20 - sufficient for imports for about 5.3 months - from $45.5 billion a year earlier.

Remittances from overseas Bangladeshis fell 5% in June to $1.84 billion._BusinessRecorder 

Elsewhere in South Asia, Sri Lanka is facing its worst economic crisis in seven decades while Pakistan’s foreign exchange reserves are depleting rapidly.

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The region’s economies have been hit particularly hard by the fallout from the Ukraine war, which has raised the cost of fuel and other essential imports.

Bangladesh’s July to May current account deficit was $17.2 billion, compared with a deficit of $2.78 billion in the year-earlier period, according to central bank data.

In the first 11 months of the fiscal year that ended on June 30, imports jumped 39% but exports grew 34%.