The current foreign exchange reserves, as determined by Bangladesh Bank, are $24.9 billion. After paying the Asian Clearing Union (ACU) $1.67 billion for imports in November and December, Bangladesh’s foreign exchange reserves fell to $20 billion. A top Bangladesh Bank official said the payment was made on Thursday, January 9. This amount is less than the central bank’s estimate of reserves, which is $24.9 billion, as determined by the IMF’s BPM-6 approach. Every two months, Bangladesh pays their ACU bills. According to BPM-6 calculations, the nation’s foreign exchange reserves were down to $18.46 billion after the $1.5 billion payment for September-October imports was made on November 10…. Reserves did, however, rebound in the months that followed.
According to data from Bangladesh Bank, imports from ACU nations rose by 11.33% in November and December over the preceding two months. India, Bangladesh, Bhutan, Iran, the Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka are the nine nations that use the ACU, a Tehran-based organization, to settle payments. Bankers see this increase in imports favorably as a sign of a strong foreign exchange position in the banking industry.
According to a representative of a private bank, “the dollar crisis in banks has significantly eased,” TBS reported. The central bank has also loosened a number of import restrictions, enabling firms to import as needed. The difficulties traders have had with imports since September 2022 have changed. Since local banks’ outstanding payments to foreign banks were settled in December of last year, we anticipate importing more in the upcoming months. Therefore, the new year will not be impacted by payment pressure,” the official continued.
Earlier this month, Husne Ara Shikha, a spokesman for Bangladesh Bank, informed the media that foreign exchange reserves are increasing. Increased remittances through banking channels and the addition of $500 million from Asian Development Bank (ADB) loans helped to keep reserves at over $26 billion as of January 3. In comparison to the same period last year, import LC (letter of credit) openings and settlements increased by 15% and 20%, respectively, during the first five months of the fiscal year 2024–25, according to central bank data.
LC openings increased to $4.54 billion during the July–November period of FY25 from $3.94 billion during the same time in FY24. In the same period, LC settlements increased from $3.48 billion to $4.17 billion. During the pandemic-induced economic shutdown in August 2021, Bangladesh’s reserves soared to a record level of $48 billion. However, due to an increase in import payments, reserves began to progressively decline in the post-pandemic period. The depreciation of forex reserves continued until August 5, 2024. But after the political change, reserves started to increase due to a spike in remittance inflows. The increasing trend was also aided by the Bangladesh Bank’s decision to stop selling dollars from reserves.
Last December, Bangladesh received a record $2.64 billion in remittances, the largest inflow of remittances for a single month in the nation’s history.
Source: The Business Standard
