Bangladesh seeking IMF loan but economy not in trouble: Finance minister

DHAKA: Bangladesh has questioned the Worldwide Monetary Fund (IMF) to get started negotiations for a mortgage, the finance minister told the Prothom Alo newspaper, when introducing that the economic system was “no way in difficulty”.

Minister AHM Mustafa Kamal stated he did not specify any amount in a letter he sent to the IMF on Sunday. Two resources with information of the issue, who declined to be recognized as only the finance minister was authorised to communicate to the media, stated the federal government had not nonetheless determined how a great deal dollars it desired.

“The IMF was asked for to commence a formal negotiation to obtain financial loans for balance of payments and budget help,” Kamal explained in the Prothom Alo report posted on Wednesday (Jul 27).

“When and how substantially financial loan will be accessible will depend on them. As significantly as our current macroeconomic condition is worried, we are in no way in difficulty.”

Kamal did not reply to requests for remark from Reuters.

A senior IMF official informed Reuters on Tuesday that Bangladesh experienced requested it to commence talks on a new loan less than the global creditor’s Resilience and Sustainability Have faith in. This sort of cash are capped at 150 for each cent of a country’s quota or, in Bangladesh’s circumstance, the highest of US$1 billion.

Bangladesh’s Day by day Star newspaper reported on Tuesday that the country preferred US$4.5 billion from the IMF.

The country’s US$416 billion economy has been one particular of the swiftest-growing in the world for decades, but increasing strength and food stuff costs for the reason that of the Russia-Ukraine war have inflated its import bill and the existing account deficit.

Bangladesh’s financial mainstay is its export-oriented clothes business, which could go through if revenue slide in its primary marketplaces in Europe and the United States since of a slowdown in the world-wide economic climate. After clothes, remittances are the next optimum supply of foreign currency for Bangladesh.

The South Asian country’s overseas exchange reserves fell to US$39.67 billion as of Jul 20 – enough for 5.3 months’ truly worth of imports – from US$45.5 billion a calendar year before.

Its July to May perhaps current account deficit was US$17.2 billion, as opposed with a deficit of US$2.78 billion in the calendar year-previously period, as its trade deficit widened and remittances fell.

Sri Lanka and Pakistan are the other two South Asian nations around the world to have sought IMF support this yr.