Bangladesh's spendable forex reserves stand at $13.22 billion

Published Date: 15-May-2024 | 11:37 AM
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Bangladesh Bank's foreign currency reserves have declined further. After the Asian Clearing Union (ACU)'s March and April payment, the total foreign exchange reserves of Bangladesh Bank have fallen to $23.77 billion.

According to the BPM6 method of the International Monetary Fund (IMF), the reserves have now stood at $18.32 billion. The country's gross forex reserves were at $19.82 billion on May 8, as per the calculation method of the IMF. Bangladesh Bank began calculating foreign exchange reserves according to the method of the IMF in July 2023. On July 13 last year, foreign exchange reserves were $23.56 billion. The real or Net International Reserves (NIR) or spendable reserves have now stood at $13.22 billion, it is learnt on Tuesday. However, Bangladesh Bank says, according to its calculation, the forex reserves now stands at $23.77 billion after the ACU payment, down from $25.27 billion on May 8. Bangladesh Bank's sources said the central bank paid $1.63 billion regarding the ACU bills last week. Then the foreign exchange reserves had declined, and the reserves have now stood at $18.32 billion. According to the net foreign exchange reserves' target set by the IMF target for Bangladesh up to June 30 next was $20.11 billion. The IMF has lowered the target at $14.75 billion though the reserves are now less than $13 billion. Bangladesh now spends some $5 billion from its reserves to meet the import expenses each month. Bangladesh Bank Executive Director and spokesperson Mezbaul Haque said the central bank paid last two months' import bills worth $1.63 billion. As a result, reserves have declined somewhat.

However, Bangladesh will receive IMF's loan instalment next month. Besides, foreign currency of different projects will be released by June. Moreover, the inward remittances sent by expatriates will surpass $2 billion in the current month. It means that the flow of dollar will increase. As a result, pressure of selling dollar from the reserves will also go down. Sources at the central bank said Bangladesh received remittances amounting to $90 million from expatriates during the first 12 days of the current month. US dollar rate has been raised to Tk 117 with the hope that inward remittances will rise. Besides, export earnings will rise owing to the hike of the dollar's rate, said the officials concerned. Bangladesh Bank is now selling each dollar at Tk 117.44 to meet the government's import payments. On the other hand, the commercial banks which are buying remittances at higher rates, Bangladesh Bank is also purchasing dollars from them at a rate of Tk 117.44. In spite of it, the fall of the reserves cannot be stopped.

The amount of dollars which is being bought is less than that of which is being sold. In order to address the economic crises, Bangladesh Bank fixed dollar's rate at Tk 117 last week accepting the IMF's conditions which was Tk 110 earlier. In addition, the interest rates on bank loans made market-oriented. The ACU is an arrangement for settling payments for intra-regional transactions among member countries, including Bangladesh. It is an international transaction settlement system, through which transactions between Bangladesh, Maldives, Myanmar, Nepal, Bhutan, India, Iran and Pakistan are settled.

 

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