Along with the dollar crisis, export earnings and remittance flows are low. As a result, foreign exchange reserves in the country are continuously decreasing. Among these, Bangladesh has paid $121 million for the import bill of Asian Clearing Union (ACU) for the months of September and October. As a result, foreign exchange reserves have come down to 19 billion dollars.
According to the data of Bangladesh Bank, now the gross reserve is 26.42 billion dollars. But there is a difference of 5.76 billion dollars with Bangladesh Bank’s calculation based on BPM-6 method as per International Monetary Fund (IMF) conditions. That is, according to the BPM-6 manual, the gross reserve is 20.66 billion. From here, after paying Akur’s bill, the country’s reserves have decreased to 19.45 billion dollars.
Bangladesh Bank executive director and spokesperson said. Mejbaul Haque told Dhaka Post that even though Akur has paid, he has not received the voucher yet. I will get the voucher tomorrow. Then I will tell you the details.
Aku is an international transaction settlement system. Through this, transactions between Bangladesh, Bhutan, India, Iran, Maldives, Myanmar, Nepal, Pakistan and Sri Lanka are settled. Akur is headquartered in Tehran, the capital of Iran. In this system, the central bank of the respective countries pays the import amount every two months. But now Sri Lanka does not have the membership of Akur. Due to the economic crisis, the country’s AKU membership has been temporarily suspended due to failure to meet various conditions for payment of import expenses for a long time.
ACUR membership is open to central banks of all countries located within the geographic boundaries of the United Nations Economic and Social Commission for Asia (ESCAP).
According to the conditions of the International Monetary Fund (IMF), Bangladesh Bank started publishing information on reserves under BPM-6 rules from July 13 this year. Then according to BPM-6, the reserves in the country were 23.56 billion (2 thousand 356 crore) dollars.
In the latest report of Bangladesh Bank, it can be seen that the reserve data has been published, as of November 2, the reserve stood at 20.66 billion (2 thousand 66 crore) dollars. That means, in three and a half months, the reserves decreased by 2.9 billion dollars.
Apart from this, there is another account of net or real reserves of the central bank, which is provided only to the IMF. is not disclosed.
According to related sources, the actual reserves of the country will now drop to 16 billion dollars. The amount of actual reserves that Bangladesh Bank has now can cover only three months of import expenses. Normally a country should have reserves equal to minimum 3 months import cost. Bangladesh is now at the bottom of that standard. One of the indicators of a country’s economy is its foreign exchange reserves.
Due to high prices of fuel and various products in the international market, the cost of imports has not decreased. Besides, global trade could not turn around after Corona. Later, after the start of the Russia-Ukraine war, the country’s dollar-crisis has become evident since March last year; which is still ongoing. This crisis is increasing day by day. The central bank is regularly selling dollars from reserves to bring ‘stability’ to the market. In the current fiscal year, it has already sold about 4.5 billion dollars. As a result, one of the most important and sensitive indicators of the economy is continuously decreasing.
Earlier, in the financial year 2022-23, the central bank sold $13.58 billion from the reserve to various banks. And in the previous financial year (2021-22), dollars sold 7.62 billion dollars.
The International Monetary Fund (IMF) approved a loan proposal of USD 4.7 billion to Bangladesh with certain conditions at the end of January this year. Bangladesh received 476 million 62 million 70 thousand dollars of the first installment of this loan last February. One of these conditions was to keep the actual reserves at $2,446 million in June, $2,530 in September and $2,680 in December. But later these conditions were relaxed by the organization.
According to the data of Bangladesh Bank, the reserve has decreased to this level since last year. Which was growing consistently before. 10 years ago at the end of June 2013, foreign exchange reserves were only 15.32 billion dollars. Five years ago it was 33.68 billion dollars. From there, foreign exchange reserves rose to $39 billion on September 1, 2020. A new milestone of $40 billion was crossed on October 8 of that year. After that, it increased even in the midst of the Corona epidemic, the accumulation or reserve of Bangladesh’s foreign currency made a record on August 24, 2021. On that day, the reserve rose to 48.04 billion dollars or four thousand 804 million dollars. After that, the reserves have been decreasing continuously since last year due to the dollar crisis.
How is the reserve created?
Foreign exchange reserves are made up of dollars received from remittances, export earnings, foreign investment, loans from various countries and international organizations. Again, the foreign currency goes through the expenditure incurred in various sectors including import expenditure, loan interest or installment payment, salary and allowance of foreign workers, tourist or student education. Thus, the dollar remaining after income and expenditure is added to the reserve. And if the cost is more, the reserve decreases.
According to the data of the central bank report, the reserve was 21.50 billion dollars in the last financial year 2013-14. In the fiscal year 2014-15 it was 25.02 billion dollars. 30.35 billion dollars in 2015-16. 33.67 billion dollars in 2016-17 fiscal year. Reserves in 2017-18 were $32.94 billion. In the fiscal year 2018-19 it was 32.71 billion dollars. 36.3 billion in the financial year 2019-20. Reserves for the fiscal year 2020-21 were $46.39 billion. In the fiscal year 2021-22, the reserve decreased to 41.82 billion dollars and in the last fiscal year 2022-23, the reserve stood at 31 billion dollars.