Forex reserve crosses USD 30b

US dollarDeutsche Welle

The amount of forex reserve of Bangladesh Bank has increased to USD 30.36 billion within two days of falling below USD 30 billion, said an official of the central bank.

Speaking to Prothom Alo, Bangladesh Bank’s spokesperson Mezbaul Haque said, “The amount of reserve fell below USD 30 billion after paying the bill of ACU (Asian Clearing Union). But the amount has crossed USD 30 billion as we have received dollar (in the form of expatriate income and grant) from abroad.”

The country’s foreign reserve came down to USD 29.8 billion on Monday from USD 30.98 billion after paying USD 1.18 billion to ACU.

The country’s reserve increased during the time of Covid-19 pandemic as expatriate workers started sending their income through legal channels. As a result, the reserve shot up to record USD 48 billion in August 2021.

But the amount started dwindling as prices of grain and fuel oil increased as the war between Russia and Ukraine broke out in February 2022. But remittance and export earnings did not increase.

So Bangladesh Bank is regularly selling dollars from its reserve to meet the import bill. As a result, the reserve is decreasing. The dollar crisis intensifies further as the Bangladesh Bank did not take decisions timely.

As per estimation of the central bank, the reserve is USD 30.36 billion. The International Monetary Fund says USD 6 billion is not usable.

In March, IMF set target of keeping net USD 22.95 billion dollars, which Bangladesh could not fulfill. The international lending agency has a condition to raise the target to USD 24.46 billion in next June.

IMF has set target to increase USD 25.32 billion in September and USD 26.41 billion in December.