Against the backdrop of continued high inflation, trade deficit and remittance inflow, Bangladesh will get an International Monetary Fund’s loan. The country will receive credit facility up to 3.468 billion SDR or around $4.5 billion from the IMF over the next four years.
The apprehension over the availability of the IMF loan is now over. Many had voiced their concerns over the availability of the loan due to conditions. But fortunately IMF did not give Bangladesh any such (tough) condition. Bangladesh is getting the loan under such conditions which it also feel should be fulfilled, Finance Minister AHM Mustafa Kamal told journalists at a press conference on Wednesday.
The international financing agency would provide $4.5 billion loan to Bangladesh in three categories. The loan will be available in seven installments while the interest rate would be floating as the average interest rate would be 2.2 percent on the overall loan amount as per the SDR interest rate.
The latest IMF’s loan will help
the economy to stabilise the
foreign exchange situation
The first installment of the loan worth 352.35 million SDR or around $447.48 million will be available in February next year while the next six equal installments would be 519 million SDR or around $659.18 million each. Bangladesh sought IMF loans as a precautionary step to keep the economy stable and capable of meeting oil, gas and fertiliser import payments.
The country’s current foreign exchange reserve is not in danger and there is no possibility of a crisis here like that of Sri Lanka. But pressure has been created on the economy due to the global price hike of commodities and energy caused by the Ukraine-Russia war.
Bangladesh has a long relationship with the IMF and it has taken IMF loans several times to meet the country’s needs. Bangladesh earlier took IMF loans and the country paid all the external loans in scheduled time including the IMF loans. The latest IMF’s loan will help the economy to stabilise the foreign exchange situation.
Oil and gas prices are soaring, and energy, food and fertiliser supplies have been disrupted due to the Ukraine-Russia war. All of these indicators are signalling a worsening of the economic situation in future. To successfully graduate from Least Developed Country (LDC) status and achieve middle-income status by 2031, it is important to build on past successes and address structural issues to accelerate growth, attract private investment, enhance productivity, and build climate resilience amid this tough time. Therefore, the IMF loan will play a key role in sustaining the post Covid-19 economic recovery, tackling the ongoing crisis and continuing development momentum.
