EXCLUSIVE IMF Says Bangladesh Seeks Loan Under Fund’s Resilience Trust


Vehicles are stuck in afternoon traffic in Dhaka, Bangladesh June 8, 2022. REUTERS/Mohammad Ponir Hossain

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LONDON, July 26 (Reuters) – Bangladesh has asked the International Monetary Fund to start talks on a new loan under the creditor’s Resilience and Sustainability Trust (RST), which is designed to help countries secure growth sustainable,” said IMF Managing Director Krishna Srinivasan. Asia and Pacific Department, in an interview on Tuesday.

Bangladesh’s $416 billion economy is the first in Asia to make such a request to the Washington-based lender as it seeks to increase its focus on how to mitigate the impact of climate change.

“The RST also comes with a program (upper credit tranche), so it is a joint initiative. The amounts will have to be discussed later,” Srinivasan told Reuters. This means that Bangladesh will need a regular program supported by the IMF, such as a stand-by arrangement or an extended financing facility, to be able to obtain this new type of financing.

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“This facility aims to address transformational changes in countries including climate change and pandemic preparedness,” he said. “It is hoped that other countries will also benefit from this instrument.”

RST funds are capped at 150% of a country’s quota or, in the case of Bangladesh, a maximum of $1 billion.

The IMF plans to start lending from the RST in October. Low-income and vulnerable middle-income countries can apply for the funding, which channeled special drawing rights from countries with strong external positions, according to the fund’s website.

The loans will have a maturity of 20 years and a grace period of 10.5 years.

“We hope this will be one of many to come,” Srinivasan said.

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Reporting by Jorgelina do Rosario, David Lawder, Karin Strohecker and Rodrigo Campos; Editing by Leslie Adler

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