Economic Crisis: Economic crisis also surrounded Bangladesh, now hope for help from IMF only

Posted on 1st Aug 2022 by rohit kumar

Bangladesh is now going to start talks with the International Monetary Fund (IMF) to get loans amid the continuous fall in foreign exchange reserves. Bangladesh sent its application for the loan to the IMF a few days ago. In this way, Bangladesh has become the third such South Asian country, which has gone under the protection of the IMF, amidst the current economic crisis growing around the world. Earlier, Sri Lanka and Pakistan requested the IMF to get a new loan.

 

According to Bangladesh's newspaper The Daily Star, Bangladesh has asked for a loan of $ 4.5 billion from the IMF. The Sheikh Hasina Wajed government of Bangladesh decided to approach the IMF after a sharp fall in foreign exchange reserves. According to experts, Bangladesh is also facing a foreign exchange crisis due to a rapid increase in the bill for other imports including natural gas, and a fall in exports.

 

Bangladesh is also willing to receive assistance under the IMF's new climate protection facility, according to the IMF. The IMF has created this new facility to help various countries to combat climate change. IMF spokesperson has said- 'IMF is ready to assist Bangladesh. Our staff will interact with the Bangladesh authorities as per the laid down policy and procedures. The amount of assistance will be decided only based on that negotiation.

 

The total economy of Bangladesh is $415 billion. It has recently been considered one of the fastest-growing countries in the world. Its textile industry in particular has been successful in creating a large market for itself in Europe, America, and Latin America. But recently, Bangladesh has had to pay a higher amount for imports of these items due to rising energy and food prices in the international market. Due to this, the balance of payments of many other countries has also deteriorated.

 

Since the corona pandemic, about 90 countries have approached the IMF to get loans. But the IMF has agreed to give loans to only a few of them. The IMF can lend up to one trillion dollars to member countries. So far, it has made up its mind to give a loan of $ 250 billion. The IMF often gives loans with strict terms. Therefore, its terms in different countries become a big cause of dispute.

 

Bangladesh Finance Minister AHM Mustafa Kamal has said, 'If the IMF's terms are favorable to us and they show synergy with our development policy, then only we will take a loan from it. Otherwise, we will refuse to take loans.’ The IMF has been imposing conditions in the past, including lending, cutting subsidies, and bringing transparency to the economy.

 

Meanwhile, Bangladesh's Chamber of Commerce and Industry has suggested that Bangladesh's central bank should consider replacing China's currency, the Yuvan, as a second reserve currency. The chamber has said that making the Yuvan a second reserve currency for international trade will bring great relief to the country because then the demand for dollars in the country will decrease.

 

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