The Bangladesh Bank has recently agreed to calculate reserves following the international standard as advised by the International Monetary Fund (IMF), but the process will be slow considering it as a national sensitive issue, an official said on Sunday (October 30, 2022). As per IMF suggestions, the central bank must follow the standard where spending for export development fund (EDF), loan to Sri Lanka and financing domestic projects from reserves must be excluded. An executive director of Bangladesh Bank, preferring anonymity, told UNB on Sunday that in principle, the central bank has decided to follow the global standards to calculate the amount for foreign reserves. Read: IMF team in talks with Bangladesh Bank officials on $4.5 loan “If the process is followed, the reserves will be reduced to $27.8 billion from $35.8 billion as declared earlier,” he said. A visiting IMF delegation was informed that Bangladesh Bank has taken a policy decision to publish accounts in line with international standards. However, as the matter is sensitive, it needs approval from the government high-ups on when it will start, he said. In addition to following the IMF's procedures, the accounts on the basis of the existing procedures will also be published. Read: Remittance fell in Sep due to exchange rate volatility: Bangladesh Bank Sector insiders say most of the world's foreign exchange reserves are calculated according to the IMF's Balance of Payments and International Investment Position manual. But Bangladesh calculates net reserves and total foreign exchange reserves when it publishes the amount for foreign currency reserves. Funds provided to various sectors including EDF are excluded from the net calculation. Bangladesh Bank publishes the gross or total account of reserves. Earlier Bangladesh Bank spokesperson Abul Kalam Azad said the central bank agreed to follow the IMF's suggestions on various issues including foreign exchange reserves. Read More: Bangladesh Bank yet to allow Indian rupee in foreign trade

Bangladesh’s forex reserves are now down to USD 36.90 billion, despite the central bank’s move of curbing imports, and currency diversification in foreign trade. According to the data of Bangladesh Bank, forex reserves on Wednesday (September 21, 2022) stood at USD 36.90 billion, which was USD 37.08 billion last Monday. In the first week of this month, the reserves fell to USD 37.06 billion as the Asian Clearing Union (ACU) cleared its July-August arrears of USD 1.74 billion. As of August 25 last year, the reserves were USD 48.60 billion. According to that, the reserve has decreased by USD 11.5 billion in one year. This is happening due to the selling pressure of US dollars for import LCs and the surge of individual demand to meet travel, medical treatment, and tuition fees for foreign universities. On September 1, 2022, the forex reserves of Bangladesh were USD 39.05 billion. Bangladesh Bank has been selling dollars from the reserves in continuation of last fiscal year to bring 'stability' to the forex market. In total, the central bank has sold USD 2.57 billion from reserves in two months (July-August) and of the current FY 2022-23. Former Bangladesh Bank governor Atiur Rahman said that despite the increase in remittance, the forex reserve fell due to the continued sale of dollars. "There is no problem even if the reserves fall to USD 38 billion in the current global context. Because, with this reserve, it is possible to meet the import expenses of more than six months,” he added. Also read: Forex reserves below $38 billion despite tightened imports

The foreign currency reserve and inward remittances hit new highs in the  midst of the coronavirus pandemic.