Golam Samdani, Special Correspondent
Dhaka: In the last two and a half years, Bangladesh Bank’s foreign exchange reserves have decreased by USD 23 billion. Foreign exchange reserves stood at $48.06 billion in August 2021. According to the data of Bangladesh Bank, the gross reserve of the country was 25.32 billion dollars last April 23. However, currently expendable reserves stand at only $14.07 billion, which cannot cover three months of import expenditure.
According to international standards, it is necessary for a country to have the ability to cover at least three months of import expenses with reserves. Such situation of reserves has raised concern among importers. Bangladesh Bank sources confirmed the matter.
Meanwhile, despite the International Monetary Fund’s (IMF) 4.70 billion dollar loan waiver, the reserve has repeatedly failed to meet its target. A special team of the IMF is coming to Dhaka on Wednesday to discuss the loan conditions in such a critical situation. The team will stay in Bangladesh till May 8.
Policy Research Institute (PRI) executive director Ahsan H Mansoor said, ‘IMF delegation may object to bank mergers in the name of bank reforms. Besides, why the reserve is not increasing, why the target is not being met and how to increase the reserve in the future, may ask for a detailed plan.’
He also said that the IMF delegation will pay attention to the fiscal policy besides learning about bank reforms.
The executive director of PRI also said, ‘The government is taking loans in foreign currency from IMF as well as 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.
Executive Director and Spokesperson of Bangladesh Bank. Majbaul Haque said, ‘There is enough reserve in the country. No worries about reserve. We have more reserves than international standards.
According to the data of Bangladesh Bank, the gross reserve of the country was 25.32 billion dollars last April 23. According to BPM-6 as per IMF advice it is 19.97 billion dollars. This, however, is not a real reserve. And $5.90 billion as current liabilities, foreign debt, project arrears and special supplementary currency (SDR) arrears have to be deducted from the BPM manual to derive the actual expendable reserves. As such expendable reserves stand at $14.07 billion.
According to the data of Bangladesh Bank, the average import expenditure in the last three months of this year (January, February, March) was 5.87 billion dollars, 5.20 billion and 5.10 billion dollars respectively.
A total of 44.48 billion dollars in letters of credit (LC) were opened for import of goods in the eight months from July to February this year. As an average month it is 5.56 billion dollars. As a result, Bangladesh Bank’s foreign exchange reserves are 14.7 billion dollars. It is difficult to cover three months of import expenses with this amount of reserves. Because with an average of 4.9 billion dollars per month, it is difficult for him to meet the import expenses of the month.
According to Central Bank data, Bangladesh Bank has sold more than 10 billion dollars in the first 9 months (July-23 to March-24) of the current financial year 2023-24. At the same time, 1 billion dollars were bought from some commercial banks. Another 2.7 billion dollars has been borrowed by Bangladesh Bank from commercial banks through swap mechanism.
It had sales of $13.58 billion in FY 2022-23 and $7.62 billion in the previous fiscal year.
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