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Bangladesh’s foreign exchange reserve has started to decline once again as it stood at $39.05 billion yesterday in contrast to $39.21 billion the day before.
The reserves stood at $39.59 billion at the end of July compared to $41.82 billion in June this year.
The latest drop in the reserves will create pressure on the exchange rate of the taka against the US dollar further, a Bangladesh Bank official said.
The fall of taka’s exchange rate means import payments will swell further, which will hike the price of imported commodities.
In the last three days, the banking watchdog had sold $367 million to different banks to help both the governments and businesses settle import bills for essential commodities, the official said.
Between July and August, around $2.50 billion were supplied to the market by the central bank from its reserves.
It also injected a record of $7.62 billion into the market in the last fiscal year.
The exchange rate of the taka against the US dollar stood at Tk 95 yesterday, up 11.5 per cent year-on-year.
The exchange rate for the importers, however, experienced an around 20 per cent year-on-year fall.
The BB official said the reserves might fall below $39 billion in a day or two, after which it might further deteriorate substantially in the second week of this month when the central bank will clear payments for Asian Clearing Union (ACU).
The ACU is an arrangement by which the participants settle payments for intra-regional transactions among the participating central banks on a net multilateral basis.
Bangladesh, Bhutan, India, Iran, the Maldives, Myanmar, Nepal, Pakistan and Sri Lanka are the members of the Tehran-headquartered ACU that was established in December of 1974.
Remittance is now maintaining an upward trend, but it has failed to protect the reserves from the fall because of the high import payments against the slower-than-expected export earnings, the official said.
Migrant workers sent $1.72 billion in remittance in the first 25 days of August after they had logged the outflow to the tune of $2.09 billion in July.
Import bills rose 63 per cent year-on-year to $7.66 billion in July when export earnings grew by 15 per cent to $3.98 billion, data from BB and the Export Promotion Bureau showed.
(TDS)
