IMF ready to extend fund support to BD

The International Monetary Fund (IMF) expresses readiness to support Bangladesh in coping with emerging economic disruptions caused by the ongoing war in Ukraine and also in dealing with climatic adversities.
Such support will be available from IMF's new Resilience and Sustainability Trust (RST) in response to Bangladesh's interest in this regards, says an IMF statement available in Dhaka Wednesday.
"The IMF stands ready to support Bangladesh with this request. The RST is expected to be operationalised in the coming months and IMF staff will work with the Bangladesh authorities during this period to design a programme most relevant to its economic and social dynamics," the IMF says in its statement.
Although the amount of support has not yet been discussed - it will be part of the programme design discussions, it mentions.
"In recognition of its climate-financing needs-and given the need to take precautionary steps to further cushion its economy from ongoing challenges -Bangladesh proactively expressed interest in the RST and an accompanying IMF-supported programme to advance its efforts to manage fiscal, monetary and financial stability risks posed by climate change and recent global developments," says the Fund.
According to the IMF statement, Bangladesh is taking measures to deal with the economic disruptions caused by the ongoing war in Ukraine.
"The (Bangladesh) authorities have tightened the monetary stance, allowed for a more flexible exchange rate, imposed temporary restrictions on non-essential and energy-related imports, and adopted measures to reduce electricity demand," it notes.
Steps are also being taken to reprioritize spending to protect the vulnerable. However, just like many countries across the globe, Bangladesh is also facing macroeconomic challenges from recent global developments.
"Even as Bangladesh tackles these immediate challenges, it recognizes the need to respond to the long-term challenge posed by climate change, which could threaten its macroeconomic stability," it says.
It further says external conditions have deteriorated sharply, and the unprecedented global shocks present countries like Bangladesh with significant uncertainties.
As part of the policy response, Bangladesh's request for an RST and accompanying IMF-supported programme will provide safeguards in the event of further deterioration of external conditions, while supporting the country's efforts to address the longer term macroeconomic implications of climate change, according to the statement.
The IMF's new Resilience and Sustainability Trust (RST) aims to provide affordable, long-term financing to help build resilience against such long-term risks.
About three-quarters of the IMF's membership-including Bangladesh-are eligible for RST financing, it mentions, adding that to qualify for the RST, all countries would need a concurrent financing or non-financing IMF-supported programme.
The Washington-based lender's statement came in the backdrop of Bangladesh's approach towards the former's multibillion-dollar loan that the country recently sought for helping tackle ongoing financial shocks following persisting energy and dollar crises.
Bangladesh needs financing support from development partners like the IMF as the rising import cost, especially soaring energy and commodity prices on the global market, has put the country's foreign-exchange reserves under pressure, it is learnt.

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