IMF says Bangladesh requests new assistance program amid Iran war fallout

WASHINGTON

The International Monetary Fund said Tuesday it was in negotiations with the Bangladeshi government for a new assistance program at Dhaka's request, as the South Asian country reels from the economic fallout of the Iran war.

"The Bangladeshi authorities have requested a new IMF-supported program," said Ivo Krznar, the Fund's Mission Chief for Bangladesh. "IMF staff are in discussions with the authorities on their reform agenda and policy priorities."

In March, Bangladesh's government said it was seeking loans of around $2 billion from multilateral donors to tackle energy security concerns sparked by the surging fuel prices caused by the war on Iran.

In a virtual meeting last week between Bangladesh Finance and Planning Minister Amir Khasru Mahmud Chowdhury and IMF Deputy Managing Director Nigel Clarke, both sides agreed to move quickly toward a new program, the finance ministry said in a statement on Monday.

Bangladesh is already in the middle of a $5.7 billion IMF program, which began in 2023 and was due to run for four years.

Last week, the World Bank said it had approved a $350 million loan to help Bangladesh manage rising fuel import pressures and strengthen energy security after shortages linked to the Middle East war.

The South Asian nation of 170 million people imports 95 percent of its oil and liquefied natural gas (LNG), much of it from the Middle East, where energy shipments through the Strait of Hormuz have been disrupted since the war began on February 28.

Bangladesh relies on imported LNG to meet its electricity demands, with power needs surging as the South Asian country swelters in the summer heat.

The government has already taken several measures to curb fuel consumption, including halting production at most fertilizer factories.