Bangladesh Bank seeks $2bn extra loan to buffer economy against Iran war shocks
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Bangladesh Bank (BB) is planning to secure another $2 billion in external financing to navigate the economic pressures triggered by the Iran war, Governor Md Mostaqur Rahman has announced.
The central bank chief shared the plan during a two-hour exchange with economic reporters at the BB headquarters on Sunday, where he outlined strategies to manage potential disruptions in fuel imports and remittance flows caused by the Middle East conflict.
“We are adopting a cautious strategy to maintain the balance of payments (BoP) under these exceptional circumstances,” the governor said.
He noted that preliminary discussions are already under way with the International Monetary Fund (IMF), while the Economic Relations Division (ERD) is exploring other funding sources.
The central bank maintains that the country's foreign exchange reserves remain at a satisfactory level.
Deputy Governor Kabir Ahmed assured the meeting that even if the conflict persists for another three to four months, the current reserves are sufficient to cover import costs.
“The exchange rate remains stable without any direct intervention, and we do not foresee major volatility in the near future,” he said.
Officials expect the BoP pressure to ease significantly by June or July, bolstered by an anticipated $2.5 billion surge in Eid-ul-Azha remittances and a scheduled $1.5 billion instalment from the IMF.
To keep energy prices affordable, the government is pursuing government-to-government (G2G) fuel import deals at lower prices or as grants.
The central bank is also working to control inflation, which may rise with global oil and dollar prices.
On the domestic front, the governor outlined three priorities -- agriculture, SMEs and reopening factories closed after the 2024 mass uprising.
The governor said these factories are national assets and banks have been asked to support their reopening through client discussions.
The governor, a former businessman who took office under the new political government, vowed to keep the financial sector free from political influence.