Bangladesh seeks $4.5 billion IMF loan as its reserves shrink

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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)

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  • 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