REJAUL KARIM BYRON

Bangladesh is eyeing $2 billion in emergency aid from the IMF’s Rapid Financing Instrument (RFI) window to cushion the economic shock stemming from the Middle East war.

The RFI provides rapid, low-access financial assistance to countries facing urgent balance of payments needs that, if not addressed, would result in an immediate and severe economic disruption.

The Middle East war is an external shock to the Bangladesh economy, raising the import bill for fuel/LNG, fertiliser and food and increasing the subsidy and social protection pressures in real time.

As a result, there is an additional subsidy requirement of Tk 38,542 billion (about $3.2 billion) for March–June, risks of rapid reserve drawdown and tighter external financing conditions.

Funds under the RFI would provide bridge liquidity to preserve reserves while sustaining essential fuel, LNG, fertiliser and food imports; create fiscal space for targeted and time-bound support; and reduce the risk of disorderly adjustment.

In so doing, it would protect macroeconomic stability.

The Bangladesh delegation led by Finance Minister Amir Khosru Mahmud Chowdhury discussed availing the RFI during the International Monetary Fund–World Bank Spring Meetings in Washington DC last weeks, The Daily Star has learnt from finance minister officials involved with the proceedings.

The formal request for funds under RFI, whose disbursement takes

SEE PAGE 8 COL 3