Bangladesh seeks IMF support to head off financial crisis
Bangladesh has sought financial assistance from the International Monetary Fund to deal with the financial shock caused by volatile energy prices following the Russian invasion of Ukraine.
Economists say the Bangladeshi taka has fallen by nearly 20% against the US dollar in the past three months.
Bangladesh's foreign exchange reserves fell to $39.67 billion as of July 20 from $45.5 billion a year ago.
Remittances from overseas Bangladeshis fell 5% to $1.84 billion in June.
The depreciation of the local currency has further weakened the country's financial position, with the current account deficit reaching $17 billion.
Sri Lanka is facing its worst economic crisis in South Asia in seven decades, while Pakistan's foreign exchange reserves are depleting rapidly.
Reason of precarious financial situation
Bangladesh's precarious financial situation has been compounded by unprecedented flooding in the northeast, inundating homes of more than seven million people and causing nearly $10 billion in damage.
The economies of the region have been severely affected by the Ukraine War, which has raised the cost of fuel and other essential imports.
The government has implemented "austerity measures" in addition to power rationing, including import restrictions and cutting power spending.
Diesel power plants in the country, which have a generating capacity of 1,500 MW, have been taken off the grid, while some of the gas-fired plants are also dormant.
Bangladesh Bank announced a policy to preserve the dollar by discouraging the import of some items like luxury items, fruits, non-cereal foods and packaged and processed foods.
Official Name - Gana Prajatantri Bangladesh (People’s Republic of Bangladesh)
Prime Minister - Sheikh Hasina
Capital - Dhaka
President - Abdul Hamid
Official Language - Bengali (Bangla)
Official Religion - Islam
Currency - Taka
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