The country now has $22.24 billion in foreign exchange, equal to four months' import bills

Bangladesh's foreign exchange reserves crossed $21 billion yesterday after almost 10 months thanks to an increased inflow of foreign currency generated by remittances and export earnings.

After remaining above the $20 billion mark for just three days, Bangladesh's foreign currency reserves dropped to $18.46 billion after the country paid its regional import bills on October 9.

Reserves stood at $20.48 billion on July 31, down from $21.78 billion a month ago

Reserves hit $19.53 billion on June 19, up from $19.21 billion on June 12

The government’s allocation to repay foreign debts may reach Tk 57,000 crore in the next budget, a 53 percent rise from the current year, putting further pressure on the country’s dwindling foreign currency reserves.

Says PM’s Energy Adviser Tawfiq-e-Elahi Chowdhury on global oil price hike

The Bangladesh Bank has unveiled the counter-trade policy, an arrangement that promotes direct exchanges of goods and services without cash, with a view to reducing pressure on dwindling foreign currency reserves.

In June last year when Finance Minister AHM Mustafa Kamal placed the budget in parliament, inflation had already been creeping up and the foreign currency reserves were on the decline. These two had derailed the full economic recovery from a two-year crisis wrought by the Covid pandemic.

It hit $29.97 billion on May 24

The business sector in Bangladesh has been going through severe challenges for the past four years, which, for many, have been the toughest period in decades, with the coronavirus pandemic being the dominant factor in the early part before the Russia-Ukraine war broke out. Today, we are running the last report of a series and it focuses on the lessons for the businesses from the two unprecedented shocks.

The government is expecting the shrinking foreign currency reserves will buck the trend and hit $37.7 billion by June thanks to lower imports and budget support from development partners.

Bangladesh’s steady embrace of digitalisation, spearheaded by a growing number of tech startups and rising software and IT service exports, has suffered a heavy blow from the imposition of new taxes this year. 

Bangladesh does not have too many policy options other than reducing consumption of goods and services and making the exchange rate flexible in order to ensure macroeconomic stability, said a central bank report.

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 use of money for good and bad has a long history.

Bangladesh Bank can better fix the currency turmoil by freeing both interest rate and exchange rate to adjust over time.

The record fuel price hike last week has thrown a spanner in the works to the finance division’s projection of bringing the twin problems of inflation and delicate foreign currency reserves under control by December.

The International Monetary Fund yesterday conveyed its interest to support Bangladesh with its request for loan to prop up its strained foreign currency reserves.

Prime Minister Sheikh Hasina today (July 27, 2022) said Bangladesh would be able to meet six to nine months of import expenditures with the existing foreign currency reserves.