Bangladesh’s foreign exchange reserves have dipped below $40 billion for the first time in nearly two years after its central bank recently settled import payments worth $1.99 billion with the Asian Clearing Union (ACU). The reserves, which stood at $46.15 billion in December last year, have been under stress in recent months and are at $39.80 billion now.
India, Bhutan, Iran, the Maldives, Bangladesh, Myanmar, Nepal, Pakistan and Sri Lanka are members of the Tehran-headquartered ACU. The central banks of these countries make payments to settle import bills every two months.
As exports and remittance flow failed to keep pace with rising import bills, between July and May in the last fiscal, imports increased to $75.40 billion, up by 39 per cent year on year when exports grew by 33 per cent to $44.58 billion, according to Bangladeshi media reports.
In fiscal 2021-22, remittances too contracted for the first time in six years as many remitters opted for informal channels to send in money.
The country’s central bank is now injecting US dollars on a regular basis into the money market, helping banks settle import bills. It supplied $7.62 billion in fiscal 2021-22 and $209 million in this fiscal.