Forex reserves fall below $21b
The gross reserves now stands at $20.96 billion as per the BPM-6 manual of the International Monetary Fund, the Bangladesh Bank data shows.
The country's gross foreign exchange reserves have fallen below $21 billion as the central bank keeps pumping dollars into the market.
According to data from the Bangladesh Bank, the gross reserves stood at $20.96 billion as per the BPM-6 manual of the International Monetary Fund as of yesterday.
At the end of August this year, reserves were at $23.25 billion. That is, the reserves have decreased by more than $2 billion in the past two and a half months.
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The banking regulator has sold a total of $3.75 billion from reserves to state-owned banks in the first three months of the current fiscal year.
In the previous fiscal year, the central bank sold $13.58 billion from the reserves to mitigate the dollar crisis and hold the value of the taka against the greenback.
A senior official at the central bank said it sells dollars from reserves to support state-run banks' letters of credit for government imports, such as fuel and fertilisers, to ensure a steady supply of these daily necessities.
The official said the country's total imports have decreased significantly, and the central bank is discouraging the import of luxury goods due to the ongoing dollar crisis. As a result, fewer LCs have been opened for these products.
"We used to import $8 billion worth of goods per month, but now that's down to $4.5-5 billion. Yet demand for the dollar hasn't decreased much," he added.
In August 2021, the country's reserves hit a record high of $48 billion.
Since then, it has been on a gradual fall with some fluctuations due to rising imports and falling remittance and export earnings amid reopening after Covid-19 restrictions. The situation deteriorated further after the outbreak of the Russia-Ukraine war.
Meanwhile, as part of efforts to maintain standard foreign exchange reserves, the government imposed bans on luxury items in the middle of last year, which helped decrease letter of credit openings.
According to the central bank, LC openings fell by more than 18% to $15.89 billion in the July-September quarter of FY24, which was $19.39 billion last fiscal year.
