The central bank's foreign currency reserves are dwindling, with a significant decrease of 60 million dollars within a week. As a result, the reserve now stands at 20.89 billion dollars, as indicated in the latest report from the Bangladesh Bank.
According to the Bangladesh Bank's report, following the International Monetary Fund's (IMF) BPM6 accounting system, the reserve was at 23.30 billion dollars at the beginning of last August.
However, at the beginning of this month, it decreased to 21.05 billion dollars, signifying a decrease of 2.25 billion dollars in just two months. By the middle of this month, the reserves had fallen below 21 billion dollars.
According to Bangladesh Bank's internal accounting system, in August 2021, the foreign currency reserve exceeded 48 billion dollars. By October 25 of the same year, that reserve had decreased to 35.80 billion dollars. However, as of last Wednesday, the reserves have fallen to 26.70 billion dollars.
Additionally, there is another account detailing the net or real reserves of the central bank, which is exclusively shared with the IMF and not made public. According to IMF sources, the actual reserves of the country are currently less than 17 billion dollars.
Among the several conditions set by the International Monetary Fund (IMF) for granting a loan of 4.7 billion dollars to Bangladesh, one was to maintain actual reserves of 26.80 billion dollars by the next December.
However, Bangladesh informed the IMF that it would not be able to meet this reserve requirement.
Consequently, the IMF has eased the conditions, setting a new target to maintain real (net) reserves of 18 billion dollars by December and 20 billion dollars by June next year.
Foreign exchange reserves are one of the key indicators of a country's economy.
The actual reserves held by Bangladesh Bank can cover three months of import expenditure, but not other expenses.
Typically, a country should have reserves equivalent to at least three months of import costs. With this in mind, Bangladesh is currently on the brink of meeting these requirements.