Bangladesh seeks $2B from the World Bank

bangladesh seeks 2b from world bank

According to people familiar with the matter, Bangladesh is seeking assistance from the World Bank and Asian Development Bank (ADB) amid efforts to bolster its foreign exchange reserves.

The Bangladeshi government wrote letters to the two lenders seeking $1 billion each to help the nation’s economy cope with the ripple effects of the war in Ukraine and energy price shocks, said the people, who asked not to be named because the matter is not public yet.

The requests come days after the government sought a loan from the International Monetary Fund (IMF), a move seen as a preventative measure to shore up the country’s foreign exchange reserves amid concerns over contagion risks. South Asian neighbors Sri Lanka and Pakistan are already in talks with the IMF for loans to tide over crises in their respective economies.

In a media briefing in Dhaka on July 27, 2022, AMH Mustafa Kamal, Bangladesh Finance Minister, said Bangladesh would not only to the IMF but also to ADB and the World Bank.

Bangladesh’s foreign exchange reserves slipped to $39.48 billion as of July 27, 2022, from $45.7 billion a year earlier. The country’s trade deficit widened to $33.3 billion in the fiscal year ended in June 2022.

Bangladesh’s government and the ADB opened initial discussions on at least four projects, including $250 million in loans for economic recovery from the pandemic. Another project to help rebuild after floods devastated the northeastern region is expected to receive as much as $250 million in loans.