Bangladesh has applied for a new three-year loan from the International Monetary Fund (IMF).
On June 9th, Finance and Planning Minister Amir Khosru Mahmud Chowdhury formally sent a letter to the IMF regarding this matter.
The loan amount was not mentioned in the minister’s letter, but sources from the finance ministry indicate that the possible amount could be between US$4-4. 5 billion. However, the final decision will be made by the IMF’s executive board.
Countries typically turn to the IMF for loans when they are under economic pressure. The interest rates on IMF loans are low, but the terms are strict. Governments are required to enact various reforms as per the IMF’s conditions, and if the reforms are not implemented successfully, the IMF can halt the disbursement of loan installments.
Earlier, due to IMF conditions, the government subsidy on fuel in Bangladesh has been nearly withdrawn, and a monthly pricing mechanism has been introduced.