IMF says ready to support B’desh after loan request

REUTERS: The International Monetary Fund (IMF) said on Wednesday it would discuss with Bangladesh its loan request after the country became the third in South Asia to seek such support after Pakistan and Sri Lanka.

Bangladesh’s US$ 416 billion economy has been one of the fastest-growing in the world for years, but rising energy and food prices because of the Russia-Ukraine war have inflated its import bill and the current account deficit.

The IMF said Bangladesh was interested in its new Resilience and Sustainability Facility aimed at helping countries face climate-change challenges and had also requested negotiations for an “accompanying IMF programme”.

“The IMF stands ready to support Bangladesh, and the staff will engage with the authorities on program design as per the established policies and procedures of the Fund,” an IMF spokesperson said. “The amount of support will be part of the program design discussions.”

Earlier in the day, Bangladesh’s finance minister told reporters the government would take an IMF loan only if conditions are favourable and said the country’s macroeconomic conditions were fine.

“If the IMF conditions are in favour of the country and compatible with our development policy, we’ll go for it, otherwise not,” Minister A.H.M. Mustafa Kamal said. “Seeking a loan from the IMF does not mean Bangladesh’s economy is in bad shape.”

The IMF’s resilience and sustainability trust caps funds at 150 percent of a country’s quota or, in Bangladesh’s case, a maximum of US$ 1 billion. Bangladesh’s Daily Star newspaper reported on Tuesday that overall, the country wanted US$ 4.5 billion from the IMF, including for budgetary and balance-of-payment support.