Forex reserves hit new record in March

Bangladesh’s foreign exchange reserves stood at an all-time high of $19.31 billion at the end of March, $160 million more than the earlier record set in February, and more than 38 percent higher than a year earlier, the central bank said on Tuesday.

The higher reserves, which stem from a widening current-account surplus, are enough to cover more than six months of imports.

At the end of March 2013, reserves totalled $13.97 billion.

remmitanceRising exports and slowing imports have helped build reserves despite a drop in inward remittances due to fewer Bangladeshis going abroad to work.

In the first eight months of the financial year beginning July 1, exports totalled $19.83 billion, up nearly 14 percent from the same period a year ago, boosted by stronger garment sales.

However, the $22 billion garment industry, which supplies many Western brands such as Wal-Mart WMT.N, Tesco TSCO.L and H&M HMb.ST, has been under the spotlight after a string of fatal factory accidents, including the collapse of a building housing factories in April that killed more than 1,130 people.

In the first three quarters of the financial year, the central bank purchased nearly $3.8 billion from local commercial banks to stem the rise of the domestic currency. In the previous financial year, it bought $4 billion.

Economic growth is expected to slow below 6 percent in the financial year ending in June, after the country was gripped by political turmoil in the months leading up to an election in January. In 2012/13, the economy grew 6 percent.

($1 = 77.65 taka)