Import payments push Bangladesh's forex reserve below $20 billion

This drop marks the first time in a month that reserves fell below the $20 billion mark, media reports claimed.

The ACU facilitates payments for intra-regional transactions among eight countries, including Bangladesh. As per the Bangladesh Bank’s calculation based on the IMF's Balance of Payment Manual, reserves decreased from $21.15 billion on March 6 to $19.99 billion on March 13.

Previously, foreign reserve was recorded at $19.94 billion on February 14.

The surge in commodity prices driven by the Russia-Ukraine conflict has affected import-dependent countries like Bangladesh, worsening the volatility in global markets. Despite notable improvements in both export and remittance sectors in February, they have not met expected levels.

Remittance inflows reached $2.16 billion, a 39 per cent increase compared to the previous month, yet concerns persist over informal channels like hundi, offering higher exchange rates.

Exports grew by 12 per cent year-on-year to $5.18 billion in February, signalling a gradual recovery in the global economy amid inflationary pressures. Conversely, imports decreased by 7.94 per cent to $5.87 billion in January, contributing to the decline in forex reserves.

Notably, Bangladesh’s forex reserves reached a record high of $40.7 billion in August 2021, showcasing a significant contrast to the current levels. 

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