IMF says Bangladesh seeks new aid programme amid Iran war fallout

The International Monetary Fund said on Tuesday that it is in talks with the Bangladeshi government over a new assistance programme requested by Dhaka, as the country grapples with the economic impact of the Iran war.

“The Bangladeshi authorities have requested a new IMF-supported programme,” 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 said it was seeking around $2 billion in loans from multilateral lenders to address energy security challenges triggered by soaring fuel prices following the outbreak of the Iran war.

During a virtual meeting last week between Finance and Planning Minister Amir Khasru Mahmud Chowdhury and IMF Deputy Managing Director Nigel Clarke, both sides agreed to expedite discussions on a new programme, according to a finance ministry statement issued on Monday.

Bangladesh is already under a $5.7 billion IMF programme launched in 2023, which is scheduled to continue for four years.

Last week, the World Bank approved a $350 million loan to help Bangladesh cope with mounting fuel import costs and bolster energy security amid shortages linked to the Middle East conflict.

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

Bangladesh depends heavily on imported LNG to meet rising electricity demand, particularly during the summer heatwave.

To reduce fuel consumption, the government has already introduced several measures, including suspending operations at most fertiliser factories.