Ariful Islam
The country’s foreign exchange reserves again crossed $32 billion mark to stand at $32.08 at the end of October this year, which was $121 million higher over the previous month, Bangladesh Bank (BB) data says.
The steady growth in RMG export side by side remittance inflow has pushed up foreign currency reserves in recent months, experts and bankers opined.
The reserves are sufficient to cover about 8 months’ imports for the country of 160 million people, an economist said.
However, it was $31.95 billion in September 2018 and $33.45 in October 2017.
A number of initiatives, taken by the BB and the government, have been encouraging expatriate Bangladeshis to send home their hard-earned money through formal channel, a senior bank official said, adding that it has helped to reduce foreign exchange pressure in the market by rising dollar supply.
A central banker told Bangladesh Post that foreign exchange market has recently faced a huge demand for greenback because of higher payment for imported items, including capital machinery, fuel oils and food grains.
As part of its move, the central bank sold US dollar directly to the commercial banks to meet higher import payments putting foreign exchange reserves under pressure. Otherwise, the reserves would have risen further in recent months, he added.
Adel Haque, former BB joint director, told Bangladesh Post that if the country has strong foreign exchange reserves, it will be more capable of paying import bills, which will ultimately help raise its rating.
However, the reserves was $32.69 in January, $33.36 in February, $32.40 in March, $33.09 in April, $32.34 in May, $32.94 in June, $32.1 in July and $32.92 in August in 2018 respectively.
Eminent economist and former BB governor Dr Salehuddin Ahmed told this correspondent that “The country’s forex reserve has witnessed fluctuating between $31 billion and $33 billion for several years.
This is mainly for higher import payments against moderate remittance inflow and export earnings, he added.
Ahmed expects, “Stopping unnecessary imports, giving necessary incentives to exporters, and encouraging expatiates to send home more remittance will help boost the foreign exchange reserves further.”