Bangladesh’s foreign exchange reserves fell below the $20 billion mark after the country paid $1.5 billion in liabilities to the Asian Clearing Union (ACU) on November 10. The reserves now stand at $18.19 billion, according to the Bangladesh Bank, calculated under the IMF’s BPM6 standard. Husneara Shikha, Executive Director and Spokesperson of Bangladesh Bank, confirmed the updated figures on Tuesday, noting the reserve decline after settling the ACU bill. Forex reserves on the rise: BB Governor assures stability Data from Bangladesh Bank shows that reserves briefly touched $20 billion on November 7, bolstered by remittance and exports. However, large payments like the ACU liability significantly impacted the balance. Earlier, in September, a similar payment of $1.36 billion for July-August ACU bills reduced reserves to $19.44 billion. In recent months, Bangladesh witnessed over $6 billion in remittances and $10 billion in export earnings, which provided some stability. Additionally, reduced pressure to open import Letters of Credit (LCs) allowed banks to maintain sufficient dollar liquidity, while inflows from foreign loans and central bank dollar purchases further contributed to reserves. Bangladesh Bank tracks reserves in three categories. Total reserves includes various funds, IMF-compliant reserves are calculated under the BPM6 standard, and usable reserves reflect readily available foreign exchange. For the first time in the country's history, foreign exchange reserves crossed the $48 billion mark in August 2021. However, increased demand in the post-Covid economy and the Russia-Ukraine war led to dollar sales from reserves, reduced foreign loans and investment, and increased repayment of previous liabilities.

Bangladesh's foreign exchange reserves are gradually increasing and stabilising, says Bangladesh Bank (BB) Governor Dr Ahsan H Mansur. “The reserves, which had been depleting by USD 1.3 billion per month under the previous government, are now seeing a more positive trend,” Governor Mansur said in an interview with UNB on Sunday. “A significant amount has already been paid for fertilisers, electricity, and obligations to Adani-Chevron,” he said. Less than a month in, new governor returns stability to forex market In the past two months alone, the central bank has successfully reduced deferred payments from USD 2.5 billion to USD 700 million by paying off USD 1.8 billion in outstanding liabilities for energy and other essential services. As of October 8, Bangladesh's foreign exchange reserves stood at USD 19.82 billion as per BPM6 calculations, while the gross reserves reached USD 24.97 billion. He said that the central bank's primary goal is to eliminate the remaining debt within the next two months, aiming for a debt-free status by November-December. “Once achieved, liquidity in the market is expected to improve.” By settling these dues, the financial pressure on the economy is anticipated to ease, allowing economic activities to accelerate. The central bank is preparing to secure an additional USD 10 billion in loans from various international institutions to bolster the economy. Bangladesh forex reserves soar to $19.53bn boosted by remittance The Governor, however, expressed concern over the country’s growing foreign debt, which has now reached USD 103 billion, with repayment pressures steadily increasing. Despite this, he urged patience, suggesting that it will take at least a year to navigate through the current debt challenges successfully.

Macroeconomists and policy analysts have listed paying deferred dues, the tendency of FDI profits taken abroad by investors, declining inward remittance flow, capital flight, and money laundering as reasons behind Bangladesh's foreign exchange reserves slipping to US$ 21.15 billion. Bangladesh’s foreign exchange reserves stood at $21.15 billion on Tuesday in line with the IMF reserve calculation method, Bangladesh Bank shared the information on Wednesday. According to the central bank, a week ago on September 21, the reserve was $21.45 billion. The forex reserves dipped by $300 million to $21.15 billion within a few days. Dr Debapriya Bhattacharya, a macroeconomist and public policy analyst, told UNB that this happened due to deferred payments of fuel import and FDI profits of the western investors being taken abroad. He said Bangladesh’s imports, particularly fuel, in some cases may close unless deferred dues are cleared. Foreign investors are also under pressure to take their profits abroad considering political uncertainty. Economist Dr Ahsan H Mansur told UNB that the declining inward remittance flow and rise in money laundering are contributing to depleting reserves. India's foreign exchange reserves dip to 4-month low He said the situation would not improve before the next national election as there is uncertainty. If a stable government is formed through a credible election, then the economy will recover fast due to improved confidence level, he pointed out. According to the central bank, the gross reserves (which include EDF funds and loans from reserves) of the country at the beginning of September were $29.23 billion. JS passes bill doubling security deposit for women’s reserved seats’ candidates At the beginning of Wednesday (September 27), it decreased to $27.06 billion. Currently, the average monthly import expenditure is $6 billion. According to this, $18 billion will be required to meet three months of import demand. That is, with the current reserves, the import expenses of little over three months can be met under the Bangladesh Bank policy of a controlled spending system. A further reduction in imports will cover four months of import expenses. Bill incorporating changes to reserved women's seat elections placed in JS According to sources, the inflow of dollars in the market has decreased due to a decrease in export earnings and remittance flow. Meanwhile, new LC has to be opened and the debt of the previous LC has to be paid. Apart from this, foreign loans and other debts also have to be paid. The Asian Clearing Union (ACU) dues for the months of September and October have to be paid in early November. Then the reserves could fall further. The second installment of the IMF loan could be waived by $480 million in November. In addition, some loans from the World Bank and Asian Development Bank may also be exempted at that time. Then the foreign exchange reserve may increase slightly. By the end of the year, Bangladesh’s export earnings are expected to increase.  

Indian High Commissioner to Bangladesh Pranay Verma today (July 11, 2023) said the new arrangement — through initially designating selected Indian and Bangladeshi banks — to commence settlement of bilateral trade in Indian rupee can help reduce pressure on foreign exchange reserves. “There are clear benefits of this new mechanism. It will reduce pressure to some extent on foreign exchange reserves for settlement of trade, while allowing some savings on exchange costs for traders. Essentially, this mechanism would help in bringing certainties of dealing in our own currencies,” he said. Speaking at an event to mark commencement of Bangladesh-India bilateral trade in Indian rupees, the high commissioner said the Indian banks currently identified are the State Bank of India and the ICICI Bank, whereas the designated Bangladeshi banks are Sonali Bank and Eastern Bank Ltd. Read: EU delegation holds meeting with EC on preparations for holding nat'l election Bilateral trade settlement in rupee entails each of the designated Bangladeshi banks opening a Special Rupee Vostro Account (SRVA) with the designated Indian banks. With growing determination and willingness, both sides, despite the odds presented by the global economic situation, have moved forward to add new momentum to the economic ties, said the envoy. “We faced the challenge presented by the Covid pandemic, and emerged stronger from it. The current global headwinds that are affecting economies across the world, present yet another challenge. And it is very heartening, and a symbol of the resilience of our bilateral partnership, that we are yet again adapting and leveraging opportunities to take our relationship and our economies forward through this innovative arrangement,” he said. This is also a reflection of the commitment to shared growth and shared prosperity, said the high commissioner. Read: ADB increases support for rural roads improvement in Bangladesh He said the success of this mechanism will lie in widespread knowledge and use of this arrangement. Bangladesh Bank Governor Abdur Rouf Talukder, Senior Secretary to the Ministry of Commerce, Executive Chairman of Bangladesh Investment Development Authority (BIDA), Secretary to Financial Institutions Division, Ministry of Finance, and presidents of the trade and chamber bodies were present. “It gives me great pleasure to welcome you all here today at this landmark event, where we formally announce the commencement of the India-Bangladesh trade in Indian rupee,” said the Indian envoy. He said India-Bangladesh relations have transformed significantly over the last decade under the visionary leadership of Indian Prime Minister Narendra Modi and Bangladeshi Prime Minister Sheikh Hasina. Read: EC proved its ‘impartiality, capability through fair polls’ in 5 recent city elections: Monitoring Forum tells EU delegates “And one of the most important manifestations of that transformation is our visibly growing economic and commercial ties and connectivity links,” he said. Bangladesh is India’s biggest trade partner in South Asia, and fifth largest globally. In the last five years, bilateral trade has more than doubled. Bangladesh’s exports to India have consistently crossed the one billion dollar mark consecutively over the last three years. In the last financial year, it crossed two billion dollars for the first time. India, with its diverse market, has emerged as the top export destination for Bangladesh in Asia. Read more PM on forex reserves: Better to spend on people's welfare than keep it idle

Prime Minister Sheikh Hasina on Monday said it is better to spend reserve money for the welfare of the people rather than sitting idle on it. “We can’t sit idle with this (reserve) money, we have to spend it for the welfare of the people,” she said. The prime minister said this while speaking at the oath taking ceremony of the newly elected Chairmen and members of the 59 Zila Parishads of the country at Bangabandhu International Conference Center (BICC). Read more: Bangladesh’s forex reserves now $34.3 billion, as per IMF formula it’s $26.3 billion While the PM administered the oath of the chairmen,  LGRD Minister Md Tajul Islam did it 623 members of the Zila Parishods. The prime minister said that the government has spent the reserve money for the welfare and betterment of the common people. In this connection she said that during the Coronavirus pandemic communication, transportation, import and everything was almost stalled. As a result the reserve money swelled to almost USD 48 billion. She said that while the world was returning to normalcy at that time Ukraine-Russia war started followed by sanctions. “As a result, prices of every item have increased worldwide with higher transportation cost,” she said. She said that notwithstanding the cost the government is importing everything to make those available to the common people. Read more: Forex reserves still enough to cover 5 months' imports: PM She said that the government is procuring food, fuel oil, gas, edible oil, wheat and corn at a very much higher price. She said that through the one crore TCB cards the government is supplying essential items at a lower price, while 50 lakh people are getting rice at the rate of Tk 15 per kilogram. “Those who are totally incapable, we are giving them food at free of cost,” she said. She also said that the government is giving houses to the homeless people. The PM said that the government has invested USD 8 billion for various purposes including infrastructural development works. “We have utilised our own reserve money, we did not take loans from others,” she said. She said the reserve money was given in loan to the Biman Bangladesh Airlines to procure aircraft.  Read more: Bangladesh Bank will go slow in calculating reserves following IMF formula Hasina said that the government is giving stimulus packages for the export-oriented industries. Pointing to the BNP's severe propaganda regarding the reserve money she said that they will definitely do it as their leader Tarique Rahman has been  convicted in a money laundering case. LGRD secretary Muhammad Ibrahim conducted the oath taking programme.

Prime Minister Sheikh Hasina on Sunday said Bangladesh still has adequate reserves of foreign exchange - enough to meet five months' import expenditures. “The forex reserve was US$ 35.72 billion on November 03, 2022. Still it is possible to import goods for five months with our reserve of foreign currencies. Whereas international standard is to maintain enough to pay for three months' import,” she told Parliament. Sheikh Hasina, also the Leader of the House, was addressing the valedictory speech in the 20th session of the 11th Parliament. She said everyone now talks about the reserve and everyone has become expert over it. The reserve was only US$ 2.12 billion in 1996 but her first government raised it to nearly US$ 4 billion by 2001. Read: PM at World Marketing Summit: 'Bangladesh an ideal place for investment' The PM said the AL government, coming to power again in 2009, found the forex reserve of US$ 5.35 billion on January 06, 2009, which was raised to 17.47 billion on 08 January, 2014, US$ 32.09 billion on January 7, 2019, US$ 36.04 billion on June 30, 2020 and $46.39 billion on June 30, 2021. She said the forex reserve went up to nearly US$48 billion during the Covid-19 as the import of goods declined sharply and the capital machinery was not imported during the pandemic. when the Covid restrictions were withdrawn, the imports of goods normally increased. So, the forex reserve declined, she said.She, however, stressed the need for reducing the import of luxurious goods and imposition of high taxes on the import of less necessary products. Read: Don’t forget BNP-Jamaat's arson, violence in 2013-15: PM Besides, Sheikh Hasina, in her speech, focused on the government’s steps taken to ensure enough stock of foods, to ease the dollar crisis, to lessen import expenditures and to expand food-friendly programmes including OMS. She also highlighted subsidies to different sectors, expansion of the social safety net, the export growth, dengue outbreak, the amount of the government’s loans and foreign debts. Later, the 20th session of the current parliament, which lasted for six sittings, was prorogued. Speaker Dr Shirin Sharmin Chaudhury read out the prorogation order of the President for the session that started on October 30 last. The PM said Bangladesh is now also facing the consequences of the global economic crisis caused by the Russia-Ukraine war, and the sanctions and counter-sanctions in its wake, following the Covid-19 pandemic.  “Bangladesh is not isolated from it. Bangladesh is suffering its consequences,” she said. She said inflation has hit records in almost all the countries across the world. The continuous rise in the value of the dollar against different currencies deepened the crisis further, she added. About the subsidies, the premier said the government needs to provide additional subsidies to different sectors including electricity, energy, food imports, and food-friendly programmes due to the crisis.  The total demand for subsidy has increased by Tk 105,000 crore, she said. Talking about the food, she said there is nothing to be worried about as there is a stock of 1,573,485 tons of food grains right now in the nation's coffers. Besides, the government has taken steps to import more food. Sheikh Hasina said 29 percent of families in the country have been brought under the social safety net and different food-friendly programmes were strengthened and OMS (Open Market Sale) scheme was taken down to the Upazilas.  “We’ve taken preparation to provide a larger amount of essentials to the poor through OMS,” she said. “We’ve been working for the people of the country. We’re making our best efforts so that the people of the country remain well,” she said. The PM said the export earnings and remittance inflow witnessed positive growth of 7 percent and 2 percent respectively during the July-October period of the current fiscal year, while the LCs opened for import declined by 11.7 percent.    She said the government is keeping an eye so that there would be no dollar crisis in the country from January 2023. About the foreign debt, Sheikh Hasina said the total loan of the government is only 36 percent of the GDP and its foreign debt is only 13.5 percent of the GDP. “After formation of the AL government, we (Bangladesh) never failed to repay loans or loan defaulters and will not be a failure in future,” she said. “We’ve been trying our best to keep our economy vibrant,” the prime minister told the House. In this context, she urged all people to exercise austerity, stop wasting resources, raise food production and reduce dependency on imported goods.

Despite curbing imports, Bangladesh’s foreign exchange reserve fell to USD 36 billion – the lowest in 28 months – due to 3 reasons, economists believe. The reasons are an imbalance in export-import, high dependency on imported oil and gas, and decreasing trend in inward remittance flow. The forex reserves stood at USD 35.98 billion on Wednesday, according to data from Bangladesh Bank. The country’s reserve was USD 46.19 billion a year ago (October 19, 2021). Read: Forex market may be more volatile unless reforms are done Former governor of Bangladesh Bank, Dr Salehuddin Ahmed, told UNB, increasing the flow of inward remittance and curtailing import liabilities are ways to secure forex reserves, as exports are facing a slump due to the Russia-Ukraine war. Despite increasing the cash incentives to 2.5 percent from 2 percent in the current fiscal year (2022-23), the inward flow of remittance saw a fall of 25 percent in September compared to August. Bangladesh is receiving an average of USD 59.22 million inward remittance per day in the current month through banking channels which was USD 76.66 million in July. Read: Bangladesh’s forex reserves now $36.90 billion The fiscal year started with a growth trend of inward remittance while the country received USD 2.09 billion in July and USD 2.03 billion in August. But remittance fell to USD 1.54 billion in September. Dr Abdur Razzaq, a trade expert and a former researcher of WTO, said overall exports of Bangladesh have declined by 6.25 percent in the last month, mainly due to a decline in apparel exports. The export of readymade garments was worth USD 3.16 billion in the previous month, which is 7.52 percent lower than in September last year. Export of both woven and knit garments declined last month, he said. Read Market-based foreign exchange rate may be introduced soon Exporters of readymade garments have said that inflation in the USA and EU countries has become severe due to the Russia-Ukraine war. People there have cut back on purchases other than fuel and groceries. Because the foreign buyers have reduced new purchase orders, some companies were not allowing shipment even after the products were ready, sector insiders said. Higher dependency on importing oil and LNG gas, directly and indirectly, affected the foreign exchange reserves. The foreign exchange payment liabilities have been surging due to increasing oil and gas prices in the global markets. Read Explainer: What it means to let taka float

Bangladesh’s forex reserves remain under stress despite curbing imports. This is happening due to the selling pressure of US dollars for import LCs, surge in individual demands to meet travel, medical treatment expenses, and tuition fees for Bangladeshi students at foreign universities. Bangladesh’s forex reserves for July-August will stand at US$38 billion after payment of $1.75 billion import bills due, — of the Asian Clearing Union (ACU) — said an official of Bangladesh Bank. The central bank will pay this debt by tomorrow. Then the forex reserves will be below $38 billion, to around $37.50 billion, he said. Also read: Hope amidst forex crisis: Bangladesh received $2.03bn remittance in Aug Last Thursday (Sep1,2022), the forex reserves of Bangladesh were $39.05 billion. Bangladesh Bank has been selling dollars from the reserves to bring 'stability' to the forex market. On Thursday, $76 million dollars were sold to some banks. In total, the central bank has sold $2.57 billion from reserves in two months. Former Bangladesh Bank governor Atiur Rahman said that despite the increase in remittance, the forex reserves fell due to the continued sale of dollars. Also read: BB sets cost ceiling for short-term trade finance in forex "There is no problem even if the reserves fall to $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. “Imports are falling; remittance and export earnings are increasing. In this situation, it seems that the forex reserves will increase in the coming days,” he hoped. The central bank sold $7.67 billion from reserves in FY 2021-22 to stabilize the forex market. Bangladesh never sold such a high amount of dollars from the reserve in a single fiscal year earlier. However, in the previous financial year (2020-21), Bangladesh Bank bought a record $8 billion to keep the forex market stable during the falling trend of imports for the Covid-19 pandemic. Read Fuel, forex reserves may run out after power crisis: Fakhrul

Accusing the Awami League government of ruining the country’s economy through widespread corruption and plundering, BNP on Friday warned that the foreign exchange reserves also may get depleted in the days to come after power and energy crisis. “The bell of the government’s downfall has begun to toll. There’s a now crisis of power and then we’ll face the shortage of fuel oil. After that, you’ll see the reserves are running out,” he said. Speaking at a rally, Fakhrul said the country’s people are going through immense sufferings since the prices of all essentials have skyrocketed. “This government is destroying the economy of Bangladesh in a planned way. Their only purpose is to indulge in corruption and looting. So our now one-point demand is the resignation of the government,” the BNP leader said. He urged the government to dissolve parliament and hand over power to a neutral caretaker government by stepping down, paving the way for holding a credible election under a reconstituted Election Commission. Read:Power Outages: BNP announces 3-day protest programme “Wake up as we have no more time in our hands. We must oust this fascist and corrupt regime,” the BNP leader said pointing at his party leaders and activists. BNP’s Dhaka north city unit arranged the programme in protest against the 'unprecedented' load-shedding and the hikes in fuel and gas prices. Fakhrul said Finance Minister AHM Mustafa Kamal admitted seeking a $4.5 billion loan from the International Monetary Fund (IMF), though last week he denied it. “This is how this government resorts to blatant lies and deceives and fools people. But they are empty inside. They’re making the country bankrupt by depleting the money resources,” he observed. Narrating a frightening economic condition, he said the government has not more than $16 billion usable forex reserves in the country. “They are turning Bangladesh into a failed state. So, we can’t give Awami League any more time and chance. The more they stay in power, the faster the destruction of the country will accelerate,” the BNP leader said. He also slammed his ruling party counterpart Obaidul Quader for his comment that there is no shortage of power and fuel oil in the country. “Why are you carrying out load-shedding for even 8 hours, if there is no shortage? Why are you rationing gas? Why are the experts talking about an ominous sign for Bangladesh? The BNP secretary general alleged that the government has destroyed the energy sector of Bangladesh through corruption and plundering.  "People in cities are now experiencing power outages for two-three hours while people in the rural areas where electricity is needed for irrigation during Boro season are facing this problem for seven-eight hours. But this government looted thousands of crores of taka in the name of electricity generation and siphoned it abroad,” alleged Fakhrul.

Prime Minister Sheikh Hasina on Wednesday said Bangladesh would be able to meet six to nine months of food import expenditures with the existing foreign currency reserves. “We have money in our hands to import food grains and others (essentials items) for at least three months during any crisis. We’ll be able to import the food for six to nine months, not only for three months, with the reserve that we have now,” she said. The premier was addressing the 28th founding anniversary programme of Bangladesh Awami Swechasebak League at Krishibid Institution Bangladesh auditorium in the city’s Farmgate area, joining it through a virtual platform from her official residence Ganobhaban. She said despite having enough reserve, the government will have to take steps to grow more crops in order to save the foreign currencies and keep the forex reserve for any emergency. Awami Swechasebak League, an associate body and the volunteer wing of Bangladesh Awami League, was founded on July 27 in 1994. Noting that the reserve was some US$ 3.8 billion in 2006 during the BNP regime, the prime minister said her government was able to raise it to US$ 48 billion from US$ 7 billion in 2009. She said Bangladesh had to spend huge amounts of foreign currencies from the reserve to import the materials for development works, capital machines for the industries as well as Covid-19 vaccines, testing kits and other Covid materials. The people of the country would be benefited when the imported capital machineries go in operation, she added. Taking a swipe at the critics of the government over forex reserve and energy, Hasina questioned why they don’t see the development activities of the government. She said the government continues providing a huge subsidy, placed such a budget, raised the per capita income and has been able to keep the GDP growth. The PM said her government pledged to reach electricity to every house and also kept this promise. But now many developed countries are taking austerity measures over the use of energy amid the global economic recession. “We’ve also to take precautionary measures so that we will not fall in a great danger….we’ve taken steps for limited use of electricity. But it doesn’t mean that we don’t have any energy or it is running out,” she added.