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Low remittance and export earnings figures in September and October will prove to be costly, as another routine import payment to the Asian Clearing Union (ACU) is slated for this week, which will cause the country’s forex reserves to go down further.
Data analysis shows that after that payment, the central bank’s reserve will dip to around $34 billion this week.
The latest data of Bangladesh Bank shows that the forex reserve of the central bank stood at $35.72 billion as of last Thursday, which is about $11 billion lower than a year ago.
The amount of reserves on November 2 last year was $46.49 billion.
On the other hand, the $1.32 billion import payment is for regional imports made during the September-October period this year.
As a respite, data analysis also shows that ACU’s route payments are gradually declining.
The ACU import bill for the May-June period was $1.96 billion, which dropped to $1.75 billion in the July-August period, according to the Bangladesh Bank.
The ACU payment gateway covers monetary transactions by its member countries for regional imports. The bills are cleared every two months.
The ACU is an arrangement involving Bangladesh, Bhutan, India, Iran, Myanmar, Nepal, Pakistan, Sri Lanka and the Maldives, through which intra-regional transactions among the participating central banks are settled on a multilateral basis.
However, in the first four months (July-October) of the current fiscal year 2022-23, more than $5.14 billion have been sold from the central bank reserve.
As a result, reserves have further depleted.
The Bangladesh Bank in FY21 bought around $8 billion from banks due to low imports and high remittance inflows amid the pandemic.
In FY22 total dollar sales from the reserve stood at a record $7.67 billion.
Ahsan H Mansur, executive director of the Policy Research Institute (PRI), told Dhaka Tribune earlier: “Last two months both remittances and export earnings are declining, which is a major concern for the economy.”
“The trade deficit is narrowing mainly due to an increase in remittances and a decrease in imports. I think the current reserves are satisfactory in the current global context: there is no risk. We should try not to decrease further, on the one hand, we must pull the reins of imports; on the other hand, emphasis should be given on increasing remittance and export income,” he added.
“But one thing should be remembered here, our reserves exceeded $48 billion in August last year, when the central bank bought about $8 billion from the market to maintain the currency rate,” he explained.
(DT)
