Bangaldesh: Officials said on Tuesday that Bangladesh had sought the International Monetary Fund’s support to deal with the financial shock caused by volatile energy prices following the Russian invasion of Ukraine.
The South Asian nation has recently experienced prolonged blackouts, sometimes up to 13 hours a day, as utilities struggle to source enough diesel and gas to meet demand.
Tens of thousands of mosques across the country have been told to reduce their use of air conditioners to ease pressure on the electricity grid, currency depreciation due to power outages and dwindling foreign exchange reserves.
Speaking anonymously, a senior finance ministry official confirmed to AFP that Dhaka had sought an IMF credit line without disclosing the amount.
Junior planning minister Shamsul Alam told AFP that authorities were grappling with a “crisis” because of rising international fuel prices after the Russian attack on Ukraine.
“Our balance of payments is in the negative zone. We need to stabilise our exchange rate,” he said.
Economists say the Bangladeshi taka has effectively slid against the US dollar by around 20 per cent in the past three months. The depreciation of the local currency has further weakened the nation’s finances, with the current account deficit hitting $17 billion.
Several South Asian nations are struggling with galloping inflation and deteriorating public finances triggered by global economic headwinds.
Nearby Sri Lanka is currently in negotiations for an IMF bailout after running out of foreign currency to import even its most vital essentials, triggering long queues at petrol stations, food shortages and lengthy power cuts.
Angry crowds in the island nation stormed the president’s official residence earlier this month, prompting the leader to flee abroad and tender his resignation.