Forex reserves increase after loans from IMF, ADB
Bangladesh Bank's foreign exchange reserves have seen an increase following the receipt of loan installments from the International Monetary Fund (IMF) and the Asian Development Bank (ADB).
The total or gross reserves have now reached USD 25.82 billion.
Using the IMF's BPM 6 accounting method, the reserves amount to USD 20.40 billion. The central bank, however, has not disclosed the net or actual reserves.
The spokesperson and executive director of Bangladesh Bank, Mezbaul Haque, disclosed this information in a press conference on Sunday.
Using the IMF's BPM 6 accounting method, the reserves amount to USD 20.40 billion. The central bank, however, has not disclosed the net or actual reserves.
As of 7 December, the gross reserves were USD 24.66 billion, while the reserves in the BPM 6 accounting system were USD 19.13 billion.
Mazbaul Haque reported that on 15 December, the second installment of the IMF loan, amounting to USD 689.8 million, and USD 400 million from the ADB loan were added to Bangladesh's foreign currency reserves. This addition has contributed to the overall increase in reserves.
As per central bank data, liabilities in the Asian Clearing Union (ACU) currently stand at USD 50 million, and IMF debt stands at USD 3.37 billion as of last June. Additionally, banks have USD 1 billion pending settlement of transactions as Foreign Currency Clearing (FC). The IMF recommends calculating reserves excluding these liabilities.
Although the central bank's reserves have increased, the prolonged dollar crisis persists. Banks continue to purchase the US currency at a rate higher than the official dollar rate, leading importers to acquire dollars at elevated prices. This discrepancy in the dollar's value is believed to impact the prices of imported goods, according to traders.
Bangladesh is required to increase its net foreign exchange reserves to USD 17.78 billion by 31 December, as per the new target set by the IMF. According to Bangladesh Bank sources, the country currently holds net reserves slightly exceeding USD 16 billion.
The IMF has revised the reserve target for Bangladesh, effectively reducing it from USD 26.80 billion at the beginning of the year to the new goal of USD 17.78 billion for December. An IMF report provides a detailed review of Bangladesh's overall economic situation and outlines necessary actions.
Despite falling short of the previous target set for June, Bangladesh successfully secured the second installment of the IMF loan. On 12 December, the multilateral organisation approved approximately USD 690 million for the second tranche.
Although the central bank's reserves have increased, the prolonged dollar crisis persists. Banks continue to purchase the US currency at a rate higher than the official dollar rate, leading importers to acquire dollars at elevated prices. This discrepancy in the dollar's value is believed to impact the prices of imported goods, according to traders.