Only two and a half years ago the reserve was 48.06 billion. And currently expendable reserves stand at 14.07 billion. With which it is not possible to import products for three months. However, as an international standard, it is necessary for a country to have at least three months’ worth of import expenses with reserves. In such a situation there is concern and panic about the reserve. Not only that, the International Monetary Fund (IMF) is repeatedly failing to meet the target set by the International Monetary Fund (IMF) for debt relief of 4.70 billion dollars. The concerned said that the special team of the donor organization is coming today to discuss the terms and conditions of the loan in such a critical situation.
According to Bangladesh Bank’s data review, yesterday’s gross reserve was 25.32 billion dollars. It is 19.97 billion dollars according to BPM-6 in IMF advice. This, however, is not a real reserve. And to derive the actual expendable reserves, $5.90 billion as current liabilities, foreign debt, project arrears, and Special Supplementary Currency (SDR) arrears must be deducted from the BPM manual. As such expendable reserves stand at 14.07 billion dollars.
Ramzan Miah, a drug importer in the capital, said there was serious concern about the reserve. I don’t get dollars. Again, if the foreign bank finds out that they are unable to cover the import expenses for three months with reserves, they will not want to open the LC. If any frog charges extra then the business will be closed.
According to Bangladesh Bank data, the average import expenditure in January, February and March was 5.87 billion dollars, 5.20 billion dollars in February and 5.10 billion dollars in March respectively. According to the updated information on the website of Bangladesh Bank, letters of credit (LC) for the import of goods were opened for a total of 44.48 billion dollars in eight months from July to February this year. On average, it is 5.56 billion dollars per month.
Executive Director of Policy Research Institute (PRI) and former IMF official Ahsan H. Mansoor said, the IMF team will focus on fiscal policy this time. And in the name of bank reform, bank mergers can be objected to. Besides, why the reserve is not increasing, why the target is not being met and how to increase the reserve in the future who can ask for a detailed plan. They will even look at what kind of policy action is being taken with the loan program. Apart from IMF, foreign currency loans are also being taken from other international organizations. But it is running out to meet the cost of importing oil and gas. As a result, the reserve is no longer increasing.
According to central bank data, it has sold more than $10 billion in the first nine months of the current fiscal year 2023-24. At the same time, Bangladesh Bank bought about 1 billion dollars from some commercial banks. Besides, Bangladesh Bank has secured another 2.7 billion dollars from commercial banks through swap method. And in the financial year 2022-23, it was sold at 13.58 billion dollars and 7.62 billion dollars in the previous financial year.
The former chief economist of the World Bank’s Dhaka office. Zahid Hossain said, due to policy mistakes, Bangladesh Bank has no option but to sell dollars from the reserve. Still forced to sell dollars to state-owned banks to settle emergency LCs. So the move to increase the dollar supply does not appear to be very effective. If the reserves fall below the international standards, imports may be affected.
Meanwhile, the IMF is expected to receive the third installment of the $4.7 billion loan after receiving two installments. But the net reserve of Bangladesh has not improved. A special team of the IMF is coming to Dhaka today to review the loan conditions in front of such reality. The meeting will continue till May 8.
An official of Bangladesh Bank said on condition of anonymity that the IMF’s conditions have brought prosperity to the country. Without him Bangladesh Bank could not do anything. Especially the banking sector reforms and good governance have been as promised. The IMF has hinted that reserve preservation and bank integration will be important. That’s why the central bank seems to have tightened things up.
Nazmul Hossain, a customer who came to buy dollars in Dhaka’s Motijheel, said, ‘There are no dollars in five banks. A few frogmen said that the reserve is on the way to the end. After hearing this, lightning struck the head. If there is no reserve in the country, it will become Sri Lanka.’
According to the IMF, the agency approved the second tranche after Bangladesh officially sought an exemption from the IMF to lower the reserve conservation target as a condition of the loan. According to the conditions, the new target of reserves at the end of December was set at 17.78 billion dollars. However, as of December, the actual reserves were $16.75 billion. And the actual reserves at the end of March were supposed to be 19.26 billion dollars, but in reality it was about 15 billion dollars. In June last year, the target was 23.7 billion dollars, but the actual reserves were 19.5 billion dollars.
Spokesperson and Executive Director of Bangladesh Bank. Majbaul Haque claimed to have enough reserves and said, ‘We have no worries about our reserves. Reserves are in excess of international ethical standards.
Business Bangladesh/AK
