IMF announces $4.5 billion aid to Bangladesh to tackle rising inflation
Like many other Asian countries, Bangladesh’s economy is also facing a sudden increase in costs mainly due to the ongoing conflict in Ukraine.
To help Bangladesh deal with rising prices, the International Monetary Fund (IMF) on Wednesday announced $4.5 billion in aid for the Asian country.
IMF team leader Rahul said, “Bangladesh’s strong economic recovery has been hampered by the pandemic from Russia’s war in Ukraine, leading to a rapidly widening current account deficit, a sharp decline in foreign exchange reserves, rising inflation and slow growth.” Is.”
The nation of 170 million people requested aid earlier this year, followed by a $4.5 billion deal for its ‘economic objectives’. According to official data, the country’s inflation rate is closer to 10 per cent, although several independent analysts claim the rate to be easily around 20 per cent, AFP reported.
Most of the IMF loans will be used to augment Bangladesh’s foreign exchange reserves which have fallen from $46 billion to $34 billion. The currency has depreciated nearly 25 per cent against the US dollar in the past few months.
Bangladesh is unable to buy fossil fuels due to currency depreciation. To maintain the current supply, PM Sheikh Hasina has announced the closure of diesel pants, and has implemented idle and prolonged power cuts of up to 13 hours a day. These outages have provoked quite popular protests on the streets. Recently, three people lost their lives and more than 100 people were injured in police raids.
By 2031, the country aims to move beyond its designation as ‘least developed country’ and be counted among ‘middle income countries’.
Bangladesh will also advocate for major climate actions and seek more funding. Sri Lanka, another South Asian country falls under this category and has sought assistance from the IMF due to the economic crisis the country is facing.
(with inputs from agencies)
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