IMF approves $4.7 billion loan for Bangladesh01 February 2023
The International Monetary Fund (IMF) has approved a loan of $4.7 billion for Bangladesh, the global lender has said in a statement.
The loan request was approved at the IMF Executive Board meeting in Washington, USA on Monday night.
Bangladesh has welcomed the IMF's move.
According to the IMF, Bangladesh will get this loan in seven instalments over the next 42 months. The average interest on the loan will be 2.2 percent.
Of the total amount, $3.3 billion will be available from the IMF's 'Enhanced Credit Support' while $1.4 billion will come under the 'Resilience and Sensibility Facility'.
The IMF said in the statement that the loan will help stabilise Bangladesh's macroeconomy, implement necessary reforms to build capacity for social and development spending, strengthen the financial sector, modernise policy frameworks and address climate change.
The lending agency said that Bangladesh's robust economic recovery from the pandemic has been interrupted by Russia's war in Ukraine, leading to a sharp widening of Bangladesh's current account deficit, depreciation of the Taka and a decline in foreign exchange reserves.
It further said that the authorities have taken on a comprehensive set of measures to deal with these latest economic disruptions.
The authorities recognise that in addition to tackling these immediate challenges, long-standing structural issues and vulnerabilities related to climate change will also need to be addressed to accelerate growth, attract private investment, enhance productivity, and build climate resilience, the IMF statement clarified.
Finance Minister AHM Mustafa Kamal in a statement thanked the IMF for the loan approval.
In a statement, the finance minister said, "Many had doubts that the IMF might not give us this loan."
"They thought that the fundamental areas of our macroeconomy were weak, so the IMF would refrain from lending, but (it) took the right decision evaluating Bangladesh's economy," he said.
This loan approval also proves that the fundamental areas of Bangladesh macroeconomy are standing in a strong position, which is better than many other countries, Kamal said.