The Financial Express

Bangladesh's foreign exchange reserve crosses $45b mark

| Updated: May 04, 2021 19:15:30

Bangladesh's foreign exchange reserve crosses $45b mark

Bangladesh's foreign exchange (forex) reserve crossed US$45 billion-mark for the first time on Monday following lower import payment obligations and higher growth of inward remittance, officials said.

The forex reserve rose to $45.01 billion on the day, setting a new record, from $44.90 billion of the previous working day, according to the central bank's latest data.

It was $44.03 billion on February 24, 2021.

The forex reserve may fall within a couple of days after making a routine payment of $1.74 billion to the Asian Clearing Union (ACU) against imports during the March-April period of this calendar year, they added.

The reserve, one of the major macroeconomic indicators of an economy, touched the $41 billion-mark on October 28 and rose to $42 billion on December 15 and $43 billion on December 30 last year.

"Our forex reserve has crossed the $45 billion-mark mainly due to higher inflow of inward remittance in the recent months," Kazi Sayedur Rahman, deputy governor of the Bangladesh Bank (BB), told the FE.

The central bank officials, however, said higher export earnings in the month of April have also contributed to achieving such forex reserve.

The single month earnings in April 2021 posted a significant 502.75 per cent growth to $3.13 billion over that of April 2020, when the country fetched only $520 million.

Bangladesh's overall export earnings grew by 8.74 per cent to $32.07 billion during the July-April period of the current fiscal year (FY), 2020-21, from $29.49 billion in the same period of the previous fiscal, according to the state-run Export Promotion Bureau (EPB)'s latest statistics.

On the other hand, import payments grew by 1.91 per cent to $37.07 billion during the July-February period of FY'21 from $36.37 billion in the same period of FY'20.

The rising trend in the prices of essential commodities including fuel oils in the global market has pushed up import payment obligations, according to the officials.

Meanwhile, the flow of inward remittance grew by nearly 39 per cent to $20.65 billion during the July-April period of FY'21 compared to $14.87 billion in the same period of the previous fiscal year, the BB data showed.

Talking to the FE, another BB official said higher inflow of foreign loans and assistants have also helped push up the forex reserve.

Besides, purchasing of the US currency continuously from the commercial banks directly has contributed to achieve the new record of forex reserve, the central banker explained.

Nearly $7.0 billion, so far, was bought from the commercial banks in FY'21 as part of the BB's intervention into the market, the BB official added.

The central bank resumed purchasing the US dollar from the commercial banks in March 2020 after around three years to help the country's forex market remain stable.

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