STAR BUSINESS REPORT

Bangladesh is eyeing an additional $2 billion from multilateral partners, including the International Monetary Fund (IMF), to manage pressure on external payments amid increased emergency energy purchases caused by the US-Israel war on Iran, said the central bank governor yesterday.

The disclosure comes as oil prices soar amid Iran’s effective closure of the Strait of Hormuz, a key chokepoint handling one-fifth of global oil trade.

Brent crude futures, the benchmark for international oil trade, closed 4.2 percent higher at $112.57 a barrel on Friday (March 27), up from $72.48 a barrel just a month ago, the day before the US-Israel war on Iran began.

Bangladesh meets 95 percent of its oil and 30 percent of its gas needs through imports.

Middle Eastern countries such as Saudi Arabia and Qatar, which use the Strait of Hormuz to export energy and fertiliser, are two key sources for the country. Bangladesh spends more than $10 billion a year importing petroleum and energy products.

“We are providing the government with ideas about various potential impacts of oil price increases,” said Bangladesh Bank (BB) Governor Md Mostaqur Rahman at a view-exchange meeting with senior business journalists at his office, where deputy governors and senior officials of BB were also present.

Based on different scenarios, the BB is analysing the possible impact on foreign exchange reserves. For example, if the price of oil is $210, the impact will be one type; if it is $150, it will be different; and if it is $100, the result will be different again.

“We are informing the government of these calculations,” he said, adding that discussions are underway regarding obtaining about $2 billion in balance of payment (BoP) support.

Bangladesh, already under an IMF loan programme, resumed talks with an IMF delegation in Dhaka on March 24-25 regarding the stalled $5.5 billion loan approved in January 2023, which has been on hold since the fifth review in November last year.

The country could receive a $1.3 billion tranche by June if it implements key reforms. Two instalments released together in June last year brought the total received so far to $3.6 billion.

Rahman said talks are ongoing with various international partners. “The matter of obtaining additional assistance from “Our