After Sri Lanka and Pakistan, Bangladesh seeks 4.5 billion dollars from IMF to ride out Financial crisis

The rising fuel prices caused by the Russian-Ukraine war has harmed Bangladesh's economy. The country is experiencing inflation, which has driven up fuel prices to the point that residents are resorting to wood for cooking.

In recent weeks, the South Asian country has witnessed extended blackouts, sometimes lasting up to 13 hours a day, as utilities struggle to find enough fuel and gas to fulfill demand.

Foreign reserves, according to government officials, are set to run out. Pakistan is likewise dealing with this issue, forcing its inhabitants to cut back on necessities such as tea.

Following the visit of its officials, Bangladesh is requesting assistance from the International Monetary Fund (IMF). "We can't make dollars; we have to earn them," Bangladesh's finance minister, A.H.M. Mustafa Kamal, said on Wednesday.

“We earn dollars by the hard work of our people who work or do business abroad. They are the driving force of our economy.”

Due to concerns about a worldwide recession, both money transferred by Bangladeshis residing abroad and exports have declined. The weakening of the native currency has deteriorated the country's finances even further, with the current account deficit reaching 17 billion dollars.

All diesel-powered power facilities in the nation are shut down, and several gas-fired units have also been disconnected from the grid. The combined generating capacity of diesel-powered plants was 1500 megawatts.

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The IMF said Bangladesh was interested in its new Resilience and Sustainability Facility, which is designed to assist countries in dealing with climate change concerns, and that it had also sought discussions for a "accompanying IMF program."

"The IMF stands ready to assist Bangladesh, and staff will work with the authorities on program design in accordance with the Fund's established norms and procedures," an IMF spokesperson said.

Sri Lanka is also negotiating an IMF bailout after running out of foreign money to acquire even the most basic necessities, resulting in long lines at gas stations, food shortages, and power outages.