Bangladesh’s forex reserves slip below $40bn, first in 2 years

Bangladesh’s foreign exchange reserves on Tuesday declined to USD $39.77 billion or below 40 billion mark for the first time in two years, according to updated data of the central bank.

The drop has been attributed to Bangladesh Bank’s import payments of $1.99 billion last week to the Asian Clearing Union (ACU).

Bangladesh, Bhutan, India, Iran, the Maldives, Myanmar, Nepal, Pakistan and Sri Lanka are members of ACU. The central banks of these countries have to make the payments every two months.

The reserves have been under stress for the past couple of months due to surge in the import bills and drop in the inward remittance.

Bangladesh’s foreign exchange reserves soared to record amount of $46.15 billion in December last year.

Bangladesh’s forex reserves witnessed a fall as import volume in the fiscal year 2021-22 increased to about $78 billion, while foreign exchange gained from remittance and export stood at $73 billion. The export earnings in FY 22 amounted to 52.08 billion and inward remittances $21.03 billion.

The inward remittance shows a fall in the FY22 to $21.03 billion from $ 24.77 billion in the FY 21.

Md Serajul Islam, executive director and spokesperson of BB told UNB that the central bank is selling US dollar to meet huge import payments in every day.

He said fall in inward remittance and rising demand of imports are the reasons for the fall in the foreign exchange reserves.