Bangladesh turns to ADB, World Bank for funds
The government of Bangladesh has sought assistance from both the World Bank and Asian Development Bank to increase its foreign exchange reserves. The government wrote letters to both entities requesting $1 billion to help the economy. The economy in Bangladesh has been struggling since the effects of the war in Ukraine along with energy price shocks.
The requests were sent out days after the government sought a loan from the international Monetary Fund in a preemptive measure to increase the foreign exchange reserves amid concerns over contagion risks. Pakistan and Sri Lanka are already in talks with the IMF for loans for their economies. Bangladesh’s foreign exchange reserves slipped to $39.48 billion as of July 27, down from $45.7 the year prior. The trade deficit in Bangladesh widened to $33.3 billion in the fiscal year that ended in June. The ADB and Bangladesh have opened initial discussions on at least four projects, one of which is a $250 million loan for economic recovery from the pandemic.