The country’s foreign exchange reserves stood at $32.08 billion at the end of April this year, $335.66 million higher than that in the previous month, according to Bangladesh Bank (BB) data. Experts and bankers opined that the steady growth of remittance, and readymade garments export earnings, had played a crucial role in pushing the foreign currency reserves up in the last month.
The foreign exchange reserves were $31.28 billion in January, $32.23 billion in February and $31.79 billion in March 2019 correspondingly. However, the reserves were $32.69 billion in January, $33.36 billion in February, $32.40 billion in March, $33.09 billion in April, $32.34 billion in May, $32.94 billion in June, $32.1 billion in July, $32.92 billion in August, $31.95 billion in September, $32.08 billion in October, $$31.05 billion in November and $32.01 billion in December of 2018 respectively.
A central banker told Bangladesh Post that the BB and the government have been encouraging expatriate Bangladeshis by taking a number of initiatives to send home their hard-earned money through formal channel. It has helped to raise remittance inflow, which helped reducing foreign exchange pressure in the market by raising dollar supply, he added. He mentioned that the foreign exchange market has recently faced a huge demand for the 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, he said adding, otherwise, the reserves would have risen further in recent months. 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.
Eminent economist and former BB governor Dr Salehuddin Ahmed said, “The country’s forex reserve has witnessed fluctuation 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 expatriates to send home more remittance will help boost the foreign exchange reserves further.”