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IMF Okays $4.7Bln Package for Forex Reserves-Drained Bangladesh

© AFP 2023 MUNIR UZ ZAMANA worker pulls his cycle rickshaw loaded with bundles of cloth in Dhaka on January 9, 2023.
A worker pulls his cycle rickshaw loaded with bundles of cloth in Dhaka on January 9, 2023. - Sputnik India, 1920, 31.01.2023
According to the UN financial agency, the package is designed to “help preserve macroeconomic stability, protect the vulnerable and foster inclusive and green growth”.
The executive board of the International Monetary Fund (IMF) on Tuesday approved a package worth $4.7Bln for Bangladesh, making it the first South Asian country to access its new Resilience and Sustainability Facility (RSF).
In October, the IMF announced an RSF facility aimed at helping low and middle-income countries deal with climate change and pandemic preparedness challenges.
“The funding includes $3.3Bln under the IMF’s Extended Credit Facility and Extended Fund Facility programs and $1.4Bln under the new RSF, which aims to help vulnerable middle-income countries and island states. This approval enables the immediate disbursement of SDR 352.35 million (about $476 million),” the IMF said.
Earlier, Bangladesh’s Finance Minister Mustafa Kamal said that funds under the IMF package will be disbursed in seven installments from February next year until December 2026.
A man pushes his autorickshaw to a fuel station in Colombo, Sri Lanka, Wednesday, July 27, 2022. - Sputnik India, 1920, 13.01.2023
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He further claimed that Bangladesh would pay a 2.2 percent interest rate on the IMF loan.
The IMF also said it includes reforms focused on creating fiscal space to enable greater social and developmental spending, strengthening Bangladesh’s financial sector, boosting fiscal and governance reforms, and building climate resilience.
The package came at a time when the South Asian country is grappling with diminishing forex reserves and high inflationary pressure because of a number of factors, including high food and fuel prices and a strong US dollar.