News
After Lanka and Pakistan, now Bangladesh lines up before IMF for bailout
After the collapse of the Sri Lankan economy, attention has turned to the state of affairs in other South Asian countries such as Pakistan, Bhutan and Bangladesh. All three countries have either curtailed imports or are planning to do so, to salvage their fast-depleting foreign exchange reserves and avoid a Lanka-like forex crisis.
While the presence of Pakistan, which is deeply indebted to China like Lanka, and tourism-dependent Bhutan has taken a massive blow from the pandemic-induced travel restrictions on the list of troubled economies is not surprising, that of Bangladesh is. Just last year, the tiny nation was celebrated for beating India in per capita income.And the UN decided to graduate it from the least-developing country category to the developing country grouping by 2026.
Bangladesh seems to have lost that momentum as Dhaka is now beseeching the IMF for a $4.5 billion bailout package to tide over its deepening economic crisis.It has also knocked the doors of the World Bank and Asian Development Bank seeking immediate relief of $1 billion from each.So, what went wrong? Bangladesh’s $ 416 billion economy is heavily dependent on its garment industry which survives on exports mostly to Europe, the US and Latin American countries.
It has been supporting the country’s growth for years but things changed dramatically following the Ukraine war pushing the prices of everything up. In response to the soaring energy prices, the Sheikh Hasina-led government was forced to introduce scheduled outages that directly impacted the textiles industry which relies on an uninterrupted power supply. On the other hand, demand also dwindled as retailers in the US and European markets — the biggest customers of Bangladesh’s garment products — started holding or cancelling orders due to disruptions and uncertainties in their own economies due to the war in Ukraine.
According to the latest available data, Bangladesh’s foreign exchange reserves stand at $39.67 billion as of July 20, which is sufficient for just four months’ worth of imports — slightly higher than the IMF’s recommended three-month cover.Just for comparison, the forex reserves were $ 45.5 billion in the year-ago period.
The country is reeling under inflation, too. In June, price rise hit a nine-month high of 7.56%, taking the average inflation for 2021-22 to 6.15%, overshooting the revised annual target of 5.9%.Bangladesh’s imports stood at $81.5 billion between July 2021 and May 2022, up 40% from a year earlier, according to Bangladesh Bank data.As a result, the current account deficit — the shortfall between exports and imports — widened over six times to $17.2 billion in the first 11 months of fiscal 2021-22.
While the Bangladesh finance minister A H M Mustafa Kamal is confident that the IMF aid will help the country tide avoid a crisis, such bailouts always come with strings attached. The Washington-based multilateral lender is known to put stringent conditions for its loans.
According to a report in The Daily Start newspaper, the conditions could include withdrawal of energy subsidies, implementing a fuel pricing mechanism, removing interest rate caps on lending and borrowing, resetting the mechanism to calculate foreign currency reserves, taking steps to increase revenue base, and strengthening corporate governance in the banking sector.
Of these, removing energy subsidies for consumers will be a major challenge for the government as it could trigger public anger. Negations on this clause is likely to drag the process.Obtaining IMF loans is a long process. An IMF delegation is expected to visit Dhaka in September to discuss the terms and conditions.By December, the deal is expected to be locked in for placing at the IMF’s board meeting in January. The question is, will Dhaka be able to manage things till then. (NIE)
Latest News
Heat index likely to increase up to ‘Caution level’ at some places in the Northern, North-central, North-western, Western, Sabaragamuwa, Southern and Eastern provinces and Monaragala district
Warm Weather Advisory
Issued by the Natural Hazards Early Warning Centre at 3.30 p.m. on 11 April 2026, valid for 12 April 2026
The Heat index, the temperature felt on the human body is likely to increase up to ‘Caution level’ at some places in the Northern, North-central, North-western, Western, Sabaragamuwa, Southern and Eastern provinces and Monaragala district.
The Heat Index Forecast is calculated by using relative humidity and maximum temperature and this is the condition that is felt on your body. This is not the forecast of maximum temperature. It is generated by the Department of Meteorology for the next day period and prepared by using global numerical weather prediction model data.

Effect of the heat index on human body is mentioned in the above table and it is prepared on the advice of the Ministry of Health and Indigenous Medical Services.
ACTION REQUIRED
Job sites: Stay hydrated and takes breaks in the shade as often as possible.
Indoors: Check up on the elderly and the sick.
Vehicles: Never leave children unattended.
Outdoors: Limit strenuous outdoor activities, find shade and stay hydrated.
Dress: Wear lightweight and white or light-colored clothing.
Note: In addition, please refer to advisories issued by the Disaster Preparedness & Response Division, Ministry of Health in this regard as well. For further clarifications please contact 011-7446491.
Latest News
Sun directly overhead Cheddikulam, Kebithigollewa, Gomarankadawala and Nilaveli about 12:11 noon. today [12]
On the apparent northward relative motion of the sun, it is going to be directly over the latitudes of Sri Lanka from 05th to 15th of April in this year.
The nearest areas of Sri Lanka over which the sun is overhead today (12th) are Cheddikulam, Kebithigollewa, Gomarankadawala and Nilaveli about 12:11 noon.
News
CEB orders temporary shutdown of large rooftop solar systems
The Ceylon Electricity Board (CEB) has directed owners of large-scale rooftop solar systems to temporarily disconnect their installations for a 10-day period beginning from Friday (April 10), citing growing concerns over grid stability amid low electricity demand and high solar generation.
The directive applies to rooftop solar systems exceeding 300 kW capacity, which are required to remain switched off until April 20. The move coincides with the extended holiday season, during which national electricity demand typically declines, alongside prevailing sunny weather conditions that significantly increase solar output.
Senior electrical engineers told The Island that the decision, though exceptional, was necessitated by operational risks posed to the national grid.
“We are seeing a pronounced imbalance between supply and demand,” a senior CEB system control engineer said. “With industries and commercial establishments operating at reduced levels during the holidays, demand drops. At the same time, solar generation remains high, creating excess power that the grid struggles to absorb.”
He explained that such imbalances could lead to fluctuations in system frequency, potentially threatening the stability of the grid. “If generation exceeds demand, frequency rises beyond acceptable limits.
This can trigger automatic protection mechanisms or, in extreme cases, lead to partial outages.”Another senior engineer attached to the transmission division noted that managing distributed solar generation remains a technical challenge.
“Unlike conventional power plants, rooftop solar systems are not centrally dispatchable. We cannot directly control their output in real time. This limits our ability to balance the system during periods of excess generation,” he said.
He added that the country’s grid infrastructure is still adapting to the rapid growth of renewable energy. “We lack sufficient large-scale battery storage and advanced grid management systems to effectively handle these fluctuations. Until such capabilities are enhanced, temporary curtailment becomes necessary.”
Engineers also pointed out that conventional thermal plants cannot be abruptly shut down or adjusted to compensate for sudden surges in solar generation.
“These plants require minimum stable operating levels. When solar floods the grid during low demand, it creates operational constraints that are not easy to manage,” one official said.
The CEB, in its statement, expressed appreciation for the cooperation of solar system owners affected by the measure, stressing that it is a short-term intervention aimed at ensuring uninterrupted and stable electricity supply across the country.
Energy experts say the development underscores the urgent need for grid modernization, including investment in battery energy storage systems, smart grid technologies, and improved demand-side management.
“This is part of the transition challenge,” an independent analyst noted. “As solar penetration increases, the grid must evolve to become more flexible. Otherwise, curtailment will remain a recurring necessity.”
Despite the temporary shutdown, CEB engineers reaffirmed their commitment to expanding renewable energy.
“Solar power is a key pillar of Sri Lanka’s future energy mix,” a senior engineer said. “But integration must be carefully managed. Grid stability cannot be compromised.”
The temporary disconnection order, which took effect yesterday, marks a critical moment in Sri Lanka’s energy transition—highlighting both the progress made in renewable energy adoption and the technical hurdles that remain.
By Ifham Nizam
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