Bangladesh's foreign currency reserves fell below $34 billion today after the central bank sold $71 million in in the interbank market to help banks clear import bills, said a Bangladesh Bank official.

Many economists today believe we are committing one of the biggest economic blunders, which has brought ruin to countless past societies.

The Asian Infrastructure Investment Bank has become the first multilateral lender to respond to Bangladesh’s call for budget support this fiscal year to weather the impacts of the Ukraine war after its board approved $250 million last week.

Even though the amount of our default loans is over Tk 130,000 crore, according to the government accounts, IMF suggests it is almost over Tk 300,000 crore.

Bangladesh may witness slower economic growth in the coming future if it retains the consumption-led growth, which will also exacerbate the widening inequality, said a development economist yesterday.

Dread and anxiety over the possibility of a global recession are rising around the world right now.

Countries in Southeast Asia had until recently taken for granted a stable relationship between China and the US to preserve their own prosperity.

Cottage, micro, small-and-medium enterprises (CMSMEs) in Bangladesh are suffering from significantly lower sales at a time when inflationary pressure has pushed up production costs, according to entrepreneurs.

Private companies are spearheading Bangladesh’s growth with their energy and optimism, putting the economy on a path to cross the $1-trillion mark by 2040, according to a top global consulting firm. 

The International Monetary Fund is set to tag three binding conditions and a host of structural reforms for the prospective $4.5 billion loan to Bangladesh, as the Washington-based multilateral lender looks to bring in lasting reforms in the country.

Local denim has maintained its top position in the US markets despite the ongoing global crisis as the demand for garments made from the widely used fabric is soaring among American consumers.

The U.S. dollar was firmly higher against major currencies on Monday, while China’s yuan slipped as sentiment was soured by rising COVID cases and tightening restrictions in some cities in the world’s second-biggest economy.

The default-loan narrative has smeared our otherwise powerful story of graduation from the Least Developed Country (LDC) status.

This fiscal year alone, the Bangladesh Bank has supplied more than $4.5 billion to the market to support the exchange rate, while the import bill averages $6 billion a month.

The government and the IMF team have reached a staff-level agreement to support the authorities’ reform policies under a new 42-month ECF/EFF arrangement of about $3.2 billion, and a concurrent RSF arrangement of about $1.3 billion.

The current lending rate, which equals the inflation rate, has brought about major challenges for the economy as a negative interest rate has prompted many large clients to borrow hugely despite subdued demand, giving them the leeway to divert funds to the unproductive sector. 

The exchange rate of dollar needs to be freed to make the garment business profitable at this crisis time, said a top leader of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) today.

"Complacency has brought us to the current forex reserve situation,” said Salehuddin Ahmed, former governor of the Bangladesh Bank.

Prime Minister Sheikh Hasina yesterday instructed Bangladesh Bank to intervene if any bank faced a dollar shortage while opening letters of credit for importing food, fertiliser and other agricultural inputs to ensure uninterrupted food supply.

Bangladesh Bank is anticipating the pressure on the balance of payments will blow over by the end of this fiscal year thanks to hearty assistance from development partners –-- an outlook termed wishful by economists.