FX reserves snaps 5-month gaining streak

Bangladesh’s foreign exchange reserves slipped in May for the first time since December, the central bank said on Sunday.

Reserves at the end of May eased to $20.23 billion from a record high of $20.37 billion the previous month, but were up from $14.53 billion a year earlier. The reserves are enough to cover six months of imports.

remmitanceRising exports, strong remittances from Bangladeshis working overseas and slower imports have helped build the reserves, a senior central bank official said.

The marginal drop in May was due to a rise in imports as political unrest subdued after a January election that was boycotted by main opposition party.

The south Asian country’s exports in July-April, the first 10 months of the current fiscal year, increased 13 percent to $24.65 billion over the same period in the previous year on the back of clothing sales.

However, Bangladesh’s garment industry has been hit by a string of fatal factory disasters, including the April 2013 collapse of a building housing factories 2013 that killed more than 1,130 people.

Imports rose 17 percent to $29.77 billion in July-March on year-on-year after a more than 4 percent drop in the 2012-13 fiscal year that ended in June 2013.

Remittances from Bangladeshis working overseas fell nearly 4.8 percent to $11.73 billion in July-April from the year-ago period, although inflows rose 3 percent in April, the third straight month of gains.

($1 = 77.63 taka)