WASHINGTON, April 2 (Reuters) - The International Monetary Fund on Wednesday approved $217.7 million in emergency loans to Bangladesh to help the government deal with severe damage caused by flooding and a cyclone last year.
Flooding and Cyclone Sidr killed at least 4,400 people and uprooting millions of people in the country's southern coast in November last year.
Total damage, mainly to agriculture, housing and infrastructure, is estimated at $2.7 billion, or 3.7 percent of Bangladesh's gross domestic product. Damage to agriculture is expected to reduce Bangladesh's economic growth in fiscal year 2008, the IMF said, without elaborating.
The IMF's loan will support Bangladesh's international reserve position under pressure from a sharp rise in disaster-related imports, including large volumes of food, the IMF said.
"Support from the international community, including emergency assistance from the IMF, will therefore be crucial for financing needed imports while allowing international reserves to remain at about three months of import coverage," the fund added.
IMF emergency assistance is usually granted to member countries hit by natural disasters to help them meet immediate balance of payments financing needs, and to maintain or restore macroeconomic stability.
The loans are repaid in eight equal quarterly installments over 3-1/4 to 5 years from the disbursement date. (Reporting by Lesley Wroughton; editing by Gary Hill)
Tanzania's President Jakaya Kikwete talks to mine owners at one of the pits, where miners remain trapped underground after floods swept through the pits, in the Manyara region March 31, 2008. ...
