There was a deficiency in the balance of payments, our reserve was falling, and our currency was depreciating rapidly. But after four months of the new government, I would say that we are maintaining a virtual balance in our current account, he says The current account, a key component of the country’s balance of payments, is maintaining a virtual balance after four months of the new government led by Nobel Laureate Professor Muhammad Yunus, Bangladesh Bank Governor Dr Ahsan H Mansur has said.
“There was a deficiency in the balance of payments, our reserve was falling, and our currency was depreciating rapidly. But after four months of the new government, I would say that we are maintaining a virtual balance in our current account. From largely negative to an acceptable balance, a sustainable deficit,” he said this while talking to BSS at an interview at the central bank headquarters in the city recently.
According to BB’s latest data, Bangladesh’s current account deficit narrowed by 76.20% year-on-year to $752 million in the first four months of the current fiscal year during July to October, a notable improvement from $3,160 million deficit in the same period last year.
The Business Standard Google News Keep updated, follow The Business Standard’s Google news channel
Mansur said Bangladesh’s current account deficit has improved because the country has been receiving more than 26% remittance flows for the past five months.
“Despite the unrest, our export growth is currently over 15 per cent. This is enabling us to reduce the arrears of foreign loans. This will help us solve other problems with the international creditor banks, which have counter-guaranteed our exports and our imports,” he added.
According to the latest data of the Export Promotion Bureau (EPB), the country’s export earnings in November witnessed a healthy growth of 15.63% fetching $4.12 billion, up by $0.56 billion from $3.56 billion in the same month of the last year.
For the financial account, Mansur said the balance used to be negative by almost $2 billion and is now positive by almost $1 billion. “So the turnaround is more than $2.5 billion. The overall balance is still in deficit, but we do see an overall improvement,” he added.
As for the exchange rate of the Bangladeshi Taka, the governor said the foreign exchange market remains stable. “When we took charge, it was around Taka 120 to a dollar and keeps hovering around it. We are in a stable exchange regime,” he added.
He said there is no sale of foreign currency reserves to support the exchange rate, to keep it market based.
“The previous regime had influenced the exchange rate by selling reserves. The reserves depleted from $48 billion to $20 billion. We are keeping it stable at around $19 billion. Some flow is expected. Within a few days, we will receive money from the World Bank and the Asian Development Bank, and after that the reserves will be able to add $1.2 billion again with the current reserves,” he added.