The International Monetary Fund on Wednesday reached a tentative deal with Bangladesh to provide $4.5 billion to weather the turmoil caused by the war in Ukraine and to manage risks from climate change.
The agreement is subject to approval by the IMF Executive Board, which is expected to be approved in the coming weeks. Bangladesh sought loans as its foreign exchange reserves were dwindling due to a weaker currency and higher import costs.
The IMF said in a statement that the funding is aimed at stabilizing the economy, protecting vulnerable people and promoting structural change that underpins strong, inclusive and sustainable growth.
“Bangladesh’s strong economic recovery from the pandemic was interrupted by Russia’s war in Ukraine, leading to a sharply widening current account deficit, a rapid decline in foreign exchange reserves, rising inflation and slowing growth,” it said. IMF staff mission visit.
The group arrived in Bangladesh late last month, gearing up to provide loans to the South Asian country of over 160 million people.