Dhaka, dt. 29 July 2022 Friday
The Bangladesh government has requested the IMF to provide a loan of more than 400 million dollars. Analysts say that Bangladesh has knocked on the door of the IMF only under great compulsion. Finance Ministry officials have confirmed that the Bangladesh government has officially sent a letter to the IMF seeking the loan last Sunday.
Krishna Srinivasan, Director of the IMF’s Asia and Pacific Department, said that Bangladesh has requested talks to get a loan from the institution’s Creditors Resilience and Sustainability Trust. He said that Bangladesh has asked for help of 416 million dollars.
However, no official of Bangladesh has officially disclosed how much loan Bangladesh has sought from the IMF. Bangladesh has received help from the IMF many times before, but the amount has never exceeded one billion dollars. But why did Bangladesh need to take such a huge amount from this international organization.
Bangladesh has gone to the IMF only because of compulsion
Economists say that the increase in the prices of oil and gas, machinery and raw materials in the international market has put a huge pressure on the country’s financial reserves. Bangladesh has approached IMF donors to handle this pressure.
Last year, Bangladesh’s foreign exchange reserves stood at $45.5 billion, but this has declined to $37.67 billion as of July 20. With the increase in the prices of fuel oil, gas, food products in the international market, there has been a huge increase in imports. As a result, there has been an acute shortage of dollars in the domestic market.
Salim Rehan, executive director of Sanem, a research institute in Bangladesh, said that currently we see that the supply of foreign currency in Bangladesh is very low and there is a lot of pressure on the balance of payments. The government has now approached the IMF to ease that pressure.
Bangladesh has never faced such a problem regarding foreign exchange since last decade as both remittance and export have performed well during this period but now the situation has arisen in the world. This has had a negative impact on remittances. The pace at which imports have grown even as exports have improved has put pressure on the balance of payments.
The government is realizing that it is not possible at present to cover this loss by increasing the supply of dollars from other sources. So it can be said that Bangladesh has gone to IMF only because of compulsion.
Bangladesh Finance Minister AHM Mustafa Kamal said, “Who will give money when we need it, we keep receiving money from those who participate in development.” Funds are needed to complete important projects in the country.
Loans are taken at lower interest rates than International Monetary Fund, World Bank, Asian Development Bank, Japan International Cooperation Agency. Loans are usually taken for a long period of time.
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