Bangladesh seeks $4.5bn IMF loan as foreign reserves shrink

DHAKA: Bangladesh has sought a $4.5 billion loan from the International Monetary Fund, the Daily Star newspaper reported on Tuesday, joining South Asian neighbors Pakistan and Sri Lanka in 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 Daily Star 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.

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