IMF delegation due in Dhaka 26 Oct

IMF logoAFP file photo

An International Monetary Fund (IMF) delegation will visit Bangladesh next week for talks over a loan programme, the IMF and officials said on Friday, after the country became the third in South Asia to seek such support.

It is battling rising prices of energy and food worsened by the war in Ukraine, and dwindling foreign exchange reserves are forcing it to turn to global lenders.

The IMF delegation will visit from 26 October to 9 November to start discussions on economic and financial reforms and policies, the IMF said in statement.

“The objective is to make progress towards a staff-level agreement” on funding in the coming months, including a long-term credit line specifically aimed at helping build resilience against climate risks in countries highly vulnerable to climate change, it said.

The objective is to make progress towards a staff-level agreement on funding in the coming months, including a long-term credit line specifically aimed at helping build resilience against climate risks in countries highly vulnerable to climate change
IMF said in statement

Finance ministry officials have said Bangladesh is seeking a $4.5 billion loan from the IMF.

Bangladesh’s foreign exchange reserves declined to $35.98 billion as of 19 October from $46.19 billion a year ago, according to data from the central bank, providing import cover of just five months.

The country’s economic mainstay is its export-oriented garments industry, which is bracing for a slowdown as key customers like Walmart are saddled with backlog as inflation forces people to prioritise essentials. Read full story

After garments, remittances are the second highest source of foreign currency for Bangladesh, a country of 165 million people.

It is also seeking loans from other lenders, including the World Bank.

Sri Lanka and Pakistan are the other two South Asian countries to have sought IMF support this year.