Bangladesh reached a staff-level agreement with the International Monetary Fund for a $4.5 billion loan, a key step that would allow the nation to buffer its economy amid dwindling foreign exchange reserves.

The IMF and Bangladesh agreed on $3.2 billion under the extended credit facility and $1.3 billion under the Resilience and Sustainability Facility, the multilateral creditor said in a statement. The 42-month program is meant to cushion the South Asian nation from economic disruptions. It will be subject to approval by the IMF’s management and board in the coming weeks.

“Bangladesh’s robust economic recovery from the pandemic has been interrupted by Russia’s war in Ukraine, leading to a sharp widening of the current account deficit, rapid decline of foreign exchange reserves, rising inflation and slowing growth,” the IMF said.

Bangladesh, with its $416 billion economy and a robust garments sector that supplies to H&M Hennes & Mauritz AB and Gap Inc., has sought support from creditors to fortify its finances after elevated energy prices caused power outages and strained FX reserves.

The nation’s dollar stockpile has slipped to $35.75 billion as of Nov. 2 -- just enough to cover about four months of imports -- from $46.49 billion a year earlier. The nation has also sought assistance from the World Bank and the Asian Development Bank.

In the staff-level agreement, the IMF program aims to create additional fiscal space, contain inflation and modernize the monetary policy framework, strengthen the financial sector, boost growth potential and build climate resilience.