Business Desk :
The country’s foreign exchange reserves, which were on the rise during last year Covid-19 period, fell to a seven-month low.
Bangladesh Bank (BB) recently paid $1.13 billion in Asian Clearing Union (ACU) import bills and after the repayment; the country’s foreign exchange reserves have come down to $44.60 billion.
According to BB officials, with this reserve, the import cost of the next six months can be met but even three weeks ago, Bangladesh Bank had reserves to meet the import cost up to 10 or 11 months.
Economists and central bank officials believe that the main reason for this is the sudden increase in the country’s import cost, decrease in the flow of remittances and sales of US dollars in banks.
An Economic Researcher, Prof Mustafizur Rahman, distinguished fellow at Centre for Policy Dialogue (CPD), told earlier that: “The drop in remittance flow has already affected Bangladesh’s macroeconomy. But it is natural that reserves will decrease if imports increase.”
“There is nothing to worry about as the reserves are still satisfactory. It is better to increase imports as this will increase investment in the country. There will be momentum in the economy and employment will increase,” he added.
A BB official, requesting anonymity, told “Prices of all types of commodities, including capital equipment and industrial raw materials, are rising as the economy recovers from the Covid-19 shock. Rising prices of fuel oil and food products have also pushed up import costs.”
“Imports are costing more than before from the reserves and in the last few months remittance also started to decrease. So, to keep the situation stable and maintain the value of taka, the central bank has been continuously boosting the sales of the US dollar. That is why the reserves are declining,” he said.
The reserves have been growing steadily for several years due to the slowdown in imports and rising remittance and export earnings during the pandemic.
Bangladesh’s foreign exchange reserves crossed the $48 billion milestone on August 24, which was the highest ever.
Since April earlier this year, remittance which has been steadily rising started to decrease till October.
