Founder, Chairman of Centre for Policy Dialogue (CPD) and prominent economist Professor Rehman Sobhan on Monday expressed concern that Bangladesh may face severe difficulties if foreign exchange reserves keep falling and go below $10 billion.

He said this at an open conversation with the members of the Economic Reporters Forum (ERF) held in the city on Monday.

Also read: People’s comfort more important than big forex reserves: PM

Prof Sobhan said Bangladesh's foreign exchange reserves continue to slide and stood at $21.15 billion on 26 September in line with the IMF’s reserve calculation formula.

Recently the reserves decreased to $18 billion as per the global standard of reserves calculation, which may fall to $10 billion or below within a few months if this trend continues, he said.

Then global lenders like the IMF and the World Bank would not be able to help Bangladesh, he said.

Also read: Net reserves of foreign exchange as per BPM-6 below $18 billion: Economist Zahid Hussain

Prof Sobhan said the inward remittances dropped to $1.34 billion in September, the lowest in 41 months, though August saw the highest number of workers going abroad in a single month and a record 11.3 lakh in FY23.

He, however, does not believe that the overall economic situation of Bangladesh can ever be like that of Sri Lanka as Bangladesh has well export earnings and remittances.

He said that instead of sending remittance through banking channel reserves are being handled through hundi.

Also read: IMF reviewing reserves, macroeconomic condition ahead of next fund release

“So, that has become quite convenient for those who smuggle money abroad,” he said.

 Prof Sobhan said that there has been a big change in the culture of the country's financial sector

“Non-repayment after borrowing has become the norm. The lower income groups deposit money in the banks while the rich take money as long-term loans and become defaulters. This tendency is growing,” he said.

He also said that in the next national election loan defaulters should not be allowed at all, but the record said they are allowed to contest by paying 4 to 5 percent of defaulted loans.

In replying to a query, he said the earnings of Bangladeshi people have increased and BMW cars are available as some people have the money to buy them.

Also read: Why Bangladesh’s forex reserves dipped to $21.15 billion? Economists cite reasons

“But which one is more necessary? Eggs or BMW, policymakers will determine it,” he said.

“There remains income discrepancy in the society,” he said.