Highlights
- Bangladesh Central Bank aims for $40 billion in forex reserves by June 2026
- Current reserves: $31.4 billion, covering about five months of imports
- Central bank already bought $1 billion without disrupting the taka
- Reforms planned: bank consolidation and stricter oversight of finance firms
- Remittances up, hundi curbed, imports more transparent
- Taka stabilized after strong central bank intervention
Goal: $40 Billion in Reserves
The Bangladesh Central Bank has set a target to increase foreign exchange reserves to $40 billion by June 2026. Governor Ahsan H Mansur said this move is aimed at stabilizing the country’s currency, the taka, and strengthening the overall economy.
He explained:
“The market is essentially in equilibrium, and we are now building reserves from a position of strength.”
The central bank has already purchased over $1 billion in recent weeks without causing any disruption to the exchange rate.
Current Reserve Position
As of 3 September 2025, Bangladesh held $31.4 billion in gross reserves. According to the central bank’s method, this is enough to cover five months of imports, while the IMF’s stricter definition calculates it as four months.
Governor Mansur said his aim is to reach six months’ coverage, regardless of whether Bangladesh continues with the IMF program.
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Reforms in the Banking Sector
Mansur, who became the 13th Governor of Bangladesh Central Bank in August 2024 after the fall of former Prime Minister Sheikh Hasina, stressed the importance of reforms.
He said reforms will include:
- Consolidation of banks
- Stronger supervision of non-bank financial institutions
He also added:
“My focus has been on ensuring macro stability — reserves, exchange rates and prices — while at the same time pushing through banking and financial reforms that are tough but necessary.”
Mansur believes if these changes are maintained for five to ten years, the financial system will become much stronger.
Clearing Past Dues and Restoring Trust
In the past year, Bangladesh cleared nearly $4 billion in arrears owed to global suppliers and power companies, including India’s Adani Group.
Mansur said:
“Within eight to nine months, we cleared everything.”
This repayment, he explained, helped rebuild trust with international correspondent banks.
Boost from Remittances and Trade
The governor credited several factors for the stronger reserve position:
- Rising remittances from expatriates
- Strict action against hundi transfers, which pushed more money into official channels
- Decline in import over-invoicing
- 9% rise in exports in the past year
Although imports slowed, Chattogram Port handled record container volumes, showing activity remained stable. These factors helped narrow the current account gap.
Taka Stabilized, IMF Calls Resisted
The taka has also stabilized after it reached 127 per US dollar last year. Mansur said the central bank’s intervention prevented the currency from falling further.
He explained:
“If I had allowed that, the rate would have gone to 135, then 145.”
Bangladesh has also resisted IMF pressure to move to a fully flexible exchange rate. Mansur said while flexibility is important, it must be controlled:
“I believe in flexibility, but not in reckless overshooting.”
Source: TBS
