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Forex reserves hit $32.29bn


Published : 09 Aug 2019 09:13 PM | Updated : 04 Sep 2020 02:58 PM

Country’s foreign exchange reserve has stood at $32.29 billion at the end of the first week of August this year, $152 million higher than that in the same period of the previous year. This figure was $32.13 billion in same period of 2018. Market analysts have attributed the rise to the country’s steady remittance growth and higher export earnings.

According to sources, Bangladesh’s export earnings and remittance inflows grew 11.92 percent to $37.75 billion and 11.74 percent to $15.50 billion respectively in the first 11 months of fiscal year 2018-19, while import payment rose by only 2.62 percent to $51.84 billion. Initiatives of the government and Bangladesh Bank to encourage expatriate Bangladeshis to send money through formal channel have played a crucial role in pushing the remittance, thereby, the foreign currency reserves up, banker said.

Moreover, higher remittance growth coupled with the increase in export earnings backed by the government’s time-befitting initiatives have helped stabilise the market by reducing pressure on foreign exchange reserve, they added. On Thursday, the exchange rate of US dollar was quoted at Tk 84.50 since May 06, 2019 while it was depreciated by 60 paisa during January-April in 2019.

However, the forex reserve was $32.27 in January, $33.23 in February, $31.78 in March, $32.12 in April, $31.34 in May, $32.71 in June, and $32.09 in Julyin 2019 respectively. Earlier, the foreign exchange market faced huge pressure to meet higher import payment for buying capital machinery to be used in government development schemes, a BB source said.

According to BB, the central bank has sold US dollar directly to the commercial banks to meet higher import payments on a regular basis. Eminent economist and former BB governor Dr Salehuddin Ahmed said that “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 envisages, “Stopping unnecessary imports, giving necessary incentives to exporters, and encouraging expatiates to send more remittance will help boost the foreign exchange reserves further.” 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.