Bangladesh seeks $4.5 billion IMF loan as its reserves shrink

• Bangladesh has asked International Monetary Fund (IMF) for $4.5-billion loan to ease pressure from depreciating currency and shrinking foreign exchange reserves.

D-8 (Developing 8)

• Members: Egypt, Iran, Malaysia, Nigeria, Pakistan, Turkey, indonesia and Bangladesh
• Area of discussion: Alternative trade financing such as cross-currency swap, barter and blockchain to address foreign currency reserves vulnerabilities.

Current Situation

• Due to COVID-19 pandemic and global economic developments, every member country is facing
• Foreign reserve and currency vulnerabilities
• Supply chain disruptions
• Inflation, energy and
• Food security risks.
• Bangladesh has suspended operations in diesel-run power plants to ease pressure on cost of imports.
• Central bank has taken measures to reduce imports of luxury goods amid shortages of dollars in banks.

Prelims Take Away

• D-8 countries
• IMF