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Forex reserves slip further

Bangladesh’s foreign currency reserves have slipped further as per the definition of the International Monetary Fund’s (IMF) balance of payments and investment position manual.

The central bank began publishing the gross international reserves (GIR) in line with the manual on July 12 to ensure that the country’s dollar stockpile is reported accurately. On the day, it stood at $23.58 billion.

On July 19, the GIR fell to $23.45 billion, central bank data showed.

The GIR includes gold, cash US dollar, bonds and treasury bills, reserve position at the IMF and special drawing rights holdings, a form of international money created by the lender.

Bangladesh’s reserves have been under strain for months due to higher imports against the lower-than-expected export earnings and remittances.

Earnings from merchandise shipment rose 6.67 per cent year-on-year to $55.55 billion in the just-concluded fiscal year, while remittance inflow grew 2.75 per cent to $21.61 billion.

The change in reporting the reserves comes as part of the conditions agreed with the IMF for the $4.7 billion loan programme.

As per the conditions for the programme, Bangladesh’s gross foreign currency reserves need to be $25.32 billion by September 30 and $26.81 billion by the end of 2023.

It failed to meet June’s reserves floor of $24.46 billion.

The central bank forecasts that the GIR will stand at $31.5 billion at the end of the current fiscal year.

It was $46.39 billion in 2020-21 and $41.83 billion in 2021-22.

The BB also reported gross foreign assets by adding the Export Development Fund and other foreign assets with the GIR.

It showed the reserves were $29.85 billion on July 19, down nearly 25 per cent from $39.69 billion a year earlier.

 

Source: The Daily Star

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