Bangladesh

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Tackling COVID-19 Fallout 

Bangladesh to ask IMF to release $700m loan soon

Staff Correspondent | Published: 23:09, May 10,2020 | Updated: 23:47, May 10,2020

 
 

Bangladesh government is going to ask the International Monetary Fund for releasing $700 million loan to assist the country’s balance of payment.

Finance minister AHM Mustafa Kamal will make the request soon, said the finance division officials.

The officials said the loan would be utilised for meeting the BoP that will come under pressure due to economic downturn amid COVID-19 outbreak in home and abroad.

They also said the borrowing would be made from Rapid Credit Facility, meant for the low-income countries facing an urgent balance of payments need.

The RCF was created under the Poverty Reduction and Growth Trust as part of a broader reform to make the Fund’s financial support more flexible, according to the IMF.

The county’s income from the readymade garment export accounting for over 80 per cent of the county’s overall export earnings plunged by almost 85 per cent in April this year to $366.58 million from $2.42 billion in the same month of 2019 due to the shutdown in the country since March 26 and in other countries for tackling the virus.

April’s remittance inflow decreased by 24.63 per cent to $1.08 billion from $1.43 billion the same month last year severely affecting the overall economic growth.

According to economic relations division officials, the government has sought around $2.0 billion from the donor agencies, including IMF, to tackle the adverse impact on the economy from the COVID-19.

Of those, the Asian Development has approved $600 in two instalments, they said.

The government has asked $850 million from the World Bank, $250 million from the Asian Infrastructure Investment Bank and $150 million from the Islamic Development Bank.

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