The Bangladesh Bank reduced the Export Development Fund (EDF) by $400 million in May to increase net forex reserves, as per the conditions set by the International Monetary Fund (IMF).
The IMF, while granting $4.7 billion loans at the end of January this year, suggested Bangladesh increase its net reserves to over $24 billion by June, which is currently a bit lower than the prescribed amount, according to officials.
With the latest adjustment, the EDF size stood at $4.6 billion, which was $7 billion until the first cut in December last.
The fund was reduced by $2.4 billion over the span of 6 months.
The export development fund loans are for supporting exporters to import their raw materials.
The loans are repaid when export proceeds come home.
According to the Bangladesh Bank, the demand for loans from the EDF has been on the decline in line with the reduced imports amid the dollar crisis.
Imports of goods, which used to be worth $7 billion per month on average, fell to a 32-month low of $4.69 billion last April.