Forex reserves cross $23b

Foreign currency reserves have crossed $23 billion for the first time in the country’s history, on the back of steady export, remittance growth, and lower oil prices.

The reserves now stand at $19.04bn, enough to pay off six months’ imports and second highest among SAARC countries

The reserves stood at $23.03 billion yesterday, according to figures from the central bank.

“A stable flow of remittances and export earnings contributed to the record reserves,” said Kazi Saidur Rahman, head of the forex reserve and treasury management department at the central bank.

He said the reserves are adequate to meet import bills for the next seven months.

Bangladesh added a staggering $20 billion to its reserves in the last one decade.

Many pointed to the lower growth of imports for the record reserves.

But officials of the central bank said although the expenditure for fuel import has come down other imports such as raw materials and machinery have gone up recently.

“So, our imports have not come down. Rather, our foreign currency earnings have gone up. As a result, the reserves are rising,” said another central banker.

The country exported products worth $17.79 billion in the first seven months of the current fiscal year, up 2.06 percent from the same period a year ago. Imports also grew, by 18.28 percent to $20 billion in the first half of fiscal 2014-15.

Remittances rose 8.57 percent year-on-year to $8.72 billion in the July-January period. The price of oil has more than halved since September 2014, which has boosted the foreign currency reserves, as the country is fully dependent on imports for meeting its demand for petroleum products.

The Bangladesh Bank official said, when oil prices were high the country had to spend $500 million per month to meet the import bills for oil. Now it costs $250 million.

The reserves will, however, come down next month when the country pays $1 billion to the Asian Clearing Union as import liabilities.

However, the reserves will still remain above $22 billion, the official said.

-the Daily Star