DHAKA, Jul 13 (NNN-BSS) – Bangladesh’s foreign exchange reserves, yesterday fell below 40 billion U.S. dollars, for the first time in two years, weighed by higher import bills and the taka’s weakness, driven by the dollar’s broad surge in recent months.
The country settled import payments worth 1.99 billion dollars with the ACU (Asian Clearing Union) last week. After the payments, Bangladesh’s forex reserves slumped to 39.80 billion dollars yesterday, for the first time in about two years.
Bangladesh’s foreign exchange reserves fell to 41.87 billion dollars at the end of June. The figure for June was compared to 42.20 billion dollars in May and 44.02 billion dollars in Apr.
Bangladesh’s forex reserves surpassed the 48-billion-dollar mark in Aug last year, the highest ever in history, due to a slowdown in imports and rising remittance and export earnings, during the COVID-19 pandemic.
In its bid to boost shrinking forex reserves, the Bangladesh Bank (BB) took measures, including relaxed rules, to woo more remittances from millions of Bangladeshis living and working abroad.
Bangladesh’s imports surged about 39.03 percent to 75.40 billion dollars, in the first 11 months of the 2021-22 fiscal year, ending in June, BB data showed.
The central bank of Bangladesh last month withdrew fixed U.S. dollar-taka exchange rate, allowing the market to set the price based on demand and supply.
The BB move aimed at restoring stability in the foreign exchange market, after the central bank’s related measure did not yield much effect.
The central bank of Bangladesh at the end of May set a uniform dollar-taka exchange rate for international trade, to rein in currency volatility.
Abdur Rouf Talukder, who was appointed central bank governor last month, told media, his priority task was to contain inflation, which the government aims to keep below 5.6 percent.
Meanwhile, Talukder stressed the need to maintain stability in dollar-Taka exchange rate, for stable international trade by reining in currency volatility.
Earlier this month, the central bank of Bangladesh rolled out its monetary policy for the first half of the current fiscal year, starting Jul 1, and set policies aimed at bolstering the government’s efforts to tackle inflation and foster economic growth.
The BB said, the main objective of the half yearly monetary policy is to “pursue a cautious policy stance with a tightening bias, to contain inflation and exchange rate pressures, while supporting the economic recovery process.”– NNN-BSS
