Bangladesh asked the IMF for help of 4.5 billion dollars

ISLAMABAD, July 27 (Alliance News): Bangladesh has sought help from the International Monetary Fund (IMF) to deal with a financial crisis triggered by fluctuating energy prices following the Russian invasion of Ukraine.

The South Asian country has experienced prolonged blackouts in recent weeks, with people facing power outages for up to 13 hours a day, as utilities demand diesel and gas, news agencies reported in the Dawn newspaper. are facing difficulties to fulfill.

Millions of mosques across the country have been asked to reduce the use of their air conditioners to reduce pressure on the power grid due to power shortfalls due to currency devaluation and dwindling foreign exchange reserves. is increasing.

Dhaka had sought a credit line from the IMF without disclosing the amount, a senior finance ministry official said on condition of anonymity.

However, local newspaper Daily Star reported that Bangladesh is seeking $4.5 billion from the Washington-based lender following a recent visit by IMF representatives.

Junior Minister for Planning Shamsul Alam said the authorities are dealing with a crisis due to the rise in international fuel prices following the Russian attack on Ukraine.

He said that our balance of payments is in the negative zone, we need to stabilize our exchange rate.

Austerity measures
Shamsul Alam said that the government has initiated austerity measures besides saving electricity, which include import bans and cuts in development expenditure.

Diesel power plants across the country, with a production capacity of 1,500 MW, have been taken off the grid while some gas-fired plants are also idle.

Bangladesh’s precarious financial situation has been compounded by unprecedented flooding in the northeast, which has inundated the homes of more than 7 million people and caused nearly $10 billion in damage, according to government estimates.

The opposition Bangladesh Nationalist Party has blamed the government for the crisis, accusing it of wasting billions of dollars in cash on botched projects.

Not only Bangladesh but many South Asian countries are struggling with deteriorating public finances due to rapidly rising inflation and global economic warming.

The Daily Star, citing the documents, reported that Bangladesh sought funds for its balance of payments and budget needs, as well as efforts to combat climate change.

Finance Minister AHM Mustafa Kamal wrote to IMF Managing Director Kristalina Georgieva, the report said.

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

Bangladesh Bank recently announced a policy to secure the dollar by discouraging imports of luxury goods, fruits, non-cereal foods and canned and processed foods.

Also read: ‘First Bangladesh was formed, now I don’t know how many countries will be formed?’

The bank’s foreign exchange reserves fell to $39.67 billion as of July 20, which is enough to cover about 5.3 months of imports, compared to $45.5 billion a year ago.

Remittances received from overseas Bangladeshis fell 5 percent to $1.84 billion in June, the central bank said, as many expatriates lost their jobs due to the Covid-19 pandemic. are lost and many of them could not go home due to travel problems and complications.

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