Bangladesh's foreign exchange reserves have dropped to $18.45 billion as per the IMF's Balance of Payments Manual (BPM6) calculation after recent payments to the Asian Clearing Union (ACU). 

Bangladesh Bank sources gave the information on Monday (November 11) night.

This marks a continued drop from previous months, reflecting the pressure on the country's reserves due to ongoing import obligations. 

The gross reserves, including various funds held in foreign currency like the Export Development Fund, currently stand at $24.19 billion.

The ACU, an arrangement that facilitates regional trade settlements among countries like India, Pakistan, and Bangladesh, required a substantial payment recently, which contributed to this dip. 

The payment cycle, occurring bi-monthly, has been a consistent factor influencing the liquidity of Bangladesh's forex reserves, as seen with previous settlement cycles as well.

While the gross reserve figure remains relatively higher, the usable reserve is significantly lower. The IMF's stringent BPM6 guidelines require the exclusion of specific foreign currency holdings that are tied to obligations or investments, resulting in a lower reported figure. 

The depletion is driven by persistent trade imbalances, rising import costs, and lower-than-expected remittance inflows, further straining the country’s foreign exchange capacity.

The central bank and government are now eyeing support from multilateral institutions like the IMF to stabilize the reserves and improve the balance of payments, especially as they face challenges in maintaining an adequate import cover.

Bangladesh Bank Executive Director and Spokesperson Hosne Ara Shikha said: “The reserve is an ongoing issue. It will decrease once, it will increase again. But now the flow of expatriate income is positive, the reserve will increase again even if it decreases temporarily.”

Source: BBC

BDST: 1011 HRS, NOV 12, 2024
SMS