Bangladesh will be the first country in South Asia to use the IMF’s new Resilience and Sustainability Facility (RSF) after its executive board approved a support program for it worth $4.7 billion at current exchange rates.
Among the funding released on Monday January 30, are $3.3 billion under the Extended Credit Facility and Extended Fund Facility programs of the IMF and $1.4 billion under the new RSF, which is intended to assist island nations and middle-income countries that are particularly vulnerable.
According to the IMF, the board’s ratification of a staff agreement reached in November permits an immediate release of around $476 million to Bangladesh.
The 42-month loan plan, according to the IMF, “will help preserve macroeconomic stability, protect the vulnerable and foster inclusive and green growth”.
According to the fund, these reforms include bolstering Bangladesh’s financial sector, advancing fiscal and governance reforms, and enhancing climate resilience. They also create fiscal room to allow for higher social and developmental spending.
In addition to the current loan toolkits that low-income and vulnerable middle-income countries had access to, the IMF announced the new RSF facility in October of last year to provide policy support and affordable longer-term funding for these nations.
RSF facilities have a maturity of 20 years and a 10-and-a-half-year grace period during which there is no principle repayment.
The IMF stated that the assistance from the RSF will aid in the nation’s efforts to adapt to and mitigate climate change.
