Bangladesh became third South Asian nation to secure a \u2018staff-level agreement\u2019 with IMF after Pakistan and Sri Lanka
\n DHAKA\/ LONDON:
\nThe International Monetary Fund (IMF) provisionally agreed a $4.5-billion support programme on Wednesday for Bangladesh, with the country\u2019s finance minister saying the deal would help prevent economic instability escalating into a crisis.
\nBangladesh\u2019s $416-billion economy has been one of the world\u2019s fastest growing for years. But rising energy and food prices, sparked by Russia\u2019s invasion of Ukraine, along with shrinking foreign exchange reserves, have swelled its import bill and current account deficit.
\nOn Wednesday it became the third South Asian nation to secure a \u201cstaff-level agreement\u201d with the IMF for loans this year, after Pakistan and Sri Lanka.
\n\u201cThe heat of the global economy has affected our economy to some extent,\u201d Finance Minister A.H.M. Mustafa Kamal told reporters after the IMF announcement. \u201cWe requested the IMF loan as a precautionary measure to ensure that this instability does not escalate into a crisis.\u201d
\nThe Fund said a \u201cstaff-level agreement\u201d 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).
\n\u201cThe objectives of Bangladesh\u2019s new Fund-supported program are to preserve macroeconomic stability and support strong, inclusive, and green growth, while protecting the vulnerable,\u201d the lender said in a statement.
\nA staff-level agreement is typically subject to approval by IMF management and consideration by its Executive Board, which is expected in the coming weeks.
\nBangladesh\u2019s economic mainstay is the export-oriented garment industry, which is bracing for a slowdown as big customers like Walmart are saddled with excess stocks as inflation forces people to prioritise their spending.
\nThe country\u2019 foreign exchange reserves had dwindled to $35.74 billion by Nov. 2 from $46.49 billion a year ago, central bank data showed.
\nThe IMF said Bangladesh has put together a programme to foster growth that includes measures to contain inflation and strengthen the financial sector.
\nFinance Minister Kamal said the IMF team agreed with the government\u2019s economic reforms. Earlier, in August, Bangladesh hiked fuel prices by around 50% in a move to trim its subsidy burden, but government officials denied at the time that this was a prerequisite for the IMF loan.
\nFunds will be disbursed in seven tranches, Kamal said, adding that the first instalment will be available in February 2023.<\/p>\n","protected":false},"excerpt":{"rendered":"
Bangladesh became third South Asian nation to secure a \u2018staff-level agreement\u2019 with IMF after Pakistan and Sri Lanka DHAKA\/ LONDON: The International Monetary Fund (IMF) provisionally agreed a $4.5-billion support programme on Wednesday for Bangladesh, with the country\u2019s finance minister saying the deal would help prevent economic instability escalating into a crisis. Bangladesh\u2019s $416-billion economy […]<\/p>\n","protected":false},"author":2,"featured_media":278571,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":{"0":"post-294509","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world"},"yoast_head":"\n