Its economy in turmoil, Dhaka seals pact with IMF on bailout

BANGLADESH AND the International Monetary Fund reached a staff-level agreement on the first review of a $4.7 billion bailout on Thursday, in a boost for the cash-strapped economy as it heads towards a national election in January.

Bangladesh's $416-billion economywasoneof theworld's fastest growing for years, but has recently struggled topay forimported fuel as its dollar reserves have shrunk by more than a third due to costly imports following Russia's invasion of Ukraine.

Completion of the first review, subject to IMF board approval in the coming weeks, will make about $681 million in

loans available to the country, the IMF said in a statement.

"The authorities have made substantial progress on structural reforms under the IMFsupported program, but challenges remain," the Fund said.

"Continued global financial tightening, coupled with existing vulnerabilities, is making macroeconomic management challenging, putting pressures on the Taka and FX reserves."

The IMF approved $4.7 billion in loans to Bangladesh in January, with an immediate disbursement of about $476 million, making it the first to secure such funds out of three South Asian countries that applied last year amid economic troubles.

The Fund said further calibrated monetary policy tightening, greater exchange rate flexibility and a tight fiscal policy would help restore macroeconomic stability in the country.

Theimf projects bangladesh' s growth at 6% in fiscal year 2024, while inflation is projected to moderate slightly above 7% by the endof theyear.