Bangladesh Forex reserves to fall to 7-year low next week

[Imran Khan]

Forex reserves to fall to 7-year low next week​

Economists see BB steps shake business confidence​

Shakhawat Hossain | Published: 23:43, May 04,2023








The country’s foreign currency reserves are likely to fall to a seven-year low in the next week following a payment of $1.12 billion under the Asian Clearing Union.
Economists said that the reserves had been falling over the past 22 months despite multiple steps by the Bangladesh Bank as those could not give any major confidence to businesses involved in exports and imports.
Bangladesh Bank spokesperson Mezbaul Haque on Thursday said that the ACU payment had already been made for March and April.
The Bangladesh Bank along with other central banks of Bhutan, Iran, India, Maldives, Nepal, Pakistan, Sri Lanka and Myanmar is a member of the ACU that arranges intra-regional transactions among its members.
The BB spokesperson said that the clearance of the ACU payment was expected on Monday.
The BB officials said that the country’s gross forex reserves would fall to $29.86 billion from $30.98 billion calculated on Tuesday (May 2).
In financial year 2015-16, the country’s forex reserves were $30.35 billion, according to the BB data.
It showed that the forex reserves stood at $33.6 billion in FY2016-17, but went down to $32.9 billion in FY2017-18 and $32.7 billion in FY2018-19.
Since FY2019-20, the forex reserves maintained an upward trend and reached an all-time high of $48 billion in August 2021.
Former Bangladesh Bank governor Salehuddin Ahmed apprehended a further fall in the forex reserves in coming months because of downturn in export incomes and inflow of foreign remittance.
Export incomes which account almost 70 per cent of the forex reserves recorded negative growth for a second consecutive month.
In April, the exports declined by 16.52 per cent to $3.95 billion from $4.74 billion in 12 months.
The western economy is facing turmoil due to the Russia-Ukraine war and consumers are spending more for buying foods, medicines and other daily essentials.
The inflow of remittance that helps the country’s balance of payment dropped by more than 19 per cent in April.
The BB has imposed restrictions on imports and been able to bring down the opening of letters of credit to $51.36 billion in July-March of FY23 compared with $68.84 billion in the same period a year earlier.
But the BB initiatives did little because of less-than-expected improvement in export and remittance, said Selehuddin Ahmed.
The falling reserves are also concerning for keeping the country’s import payment at a comfortable level of four months as per recommendation of the International Monetary Fund.
The IMF has attached top priority to reserves buildup under its current $4.7 billion loan programme over the next three years.
It wanted the central bank to keep net reserves of some $24 billion by June.
In February, the IMF disbursed $476 million as the first tranche of its loan after successful negotiations with the government while the disbursement of next tranche of the remaining $4.2 billion loan in six installments is due in November.
Policy Research Institute executive director Ahsan H Mansur noted that the businesses were suffering a lack of confidence in the government measures taken to tackle the economic downturn since the previous year.
Exporters do not bring their export receipts timely, he said, adding that the Bangladeshi expatriates were reluctant to send money through official channel.
On Tuesday, an IMF mission at a meeting with commerce ministry officials found a gap of some $3 billion in export receipts.
The gap has been created as exporters did not bring the receipts back to the country within a stipulated time.
Besides, exporters brought home less than what was actually exported through under-invoicing linked to capital flight.
Mansur suggested that the BB should stop dollar sale to fix exchange rate and inflation to bring back business confidence in its steps.

Forex reserves to fall to 7-year low next week

The country’s foreign currency reserves are likely to fall to a seven-year low in the next week following a payment of $1.12 billion under the...

www.newagebd.net

 

[bluesky]

It is better the Forex reserves have been falling. As a result, the govt organs are at work to slow down the imports of goods consumed by the rich.

Once these imports slow down, our own companies will invest to manufacture the same/ similar products in the country.

The IMF has already listed the imported goods that it says are unnecessary. IMF has also demanded to boost internal revenue and taxes and suggested a few ways. Govt organs are working on many IMF suggestions.

So, a temporary Forex decline is helping the country not to become another country like India`s west or south.

Notes: A vulture prays for the untimely death of an animal below, but things do not work that way. The vulture's prayer remains unheeded.

 

[Skull and Bones]

They should stop buying iPhones

 

[Homo Sapiens]

Notes: A vulture prays for the untimely death of an animal below, but things do not work that way. The vulture's prayer remains unheeded.

The vulture has an unhealthy obsession with Bangladesh to see it get destroyed to sooth it's Mount Everest size ego. As if it will remedy Pakistan's predicament in any way or if Bangladesh's loss will add as a gain for Pakistan. I do not find Bangladeshi netizen are rejoicing Pakistan's misfortune as vast majority of Bangladeshi people have only good wish for Pakistan as a fellow Muslim country and most importantly Bangladeshi people do not follow Pakistan's internal development obsessively like Indians. It is the pajeets, numbering in millions in social media, trolling, mocking, cursing, and wishing all kind of bad for Pakistan, yet what I can see that the vulture has a good rapport with the pajeets but have a huge butt-hurt attitude towards Bangladesh.

 

[Princeps Senatus]

bhai bhai

 

[CallSignMaverick]

The BB officials said that the country’s gross forex reserves would fall to $29.86 billion from $30.98 billion calculated on Tuesday (May 2).

Thats still the 2nd highest in entire subcontinent

 

[Destranator]

@Imran Khan all day:

It is better the Forex reserves have been falling. As a result, the govt organs are at work to slow down the imports of goods consumed by the rich.

Once these imports slow down, our own companies will invest to manufacture the same/ similar products in the country.

The IMF has already listed the imported goods that it says are unnecessary. IMF has also demanded to boost internal revenue and taxes and suggested a few ways. Govt organs are working on many IMF suggestions.

So, a temporary Forex decline is helping the country not to become another country like India`s west or south.

Notes: A vulture prays for the untimely death of an animal below, but things do not work that way. The vulture's prayer remains unheeded.

My thoughts exactly. I hope this kick up our backside forces us to diversify exports.

Thats still the 2nd highest in entire subcontinent

That's like asking who the tallest kid is at Kindergarten.

 

[bluesky]

My thoughts exactly. I hope this kick up our backside forces us to diversify exports.

A 3rd world country's govt is weak compared to bureaucrats with high education. Elected govt needs a strong backup from international organizations like IMF or WB to check the evil influence of the bureaucrats,

High bureaucrats love to think the country is their personal Fiefdom and the sitting politicians cannot control them because of their lack of knowledge on the national economy.

BD is going through this phase. But, the GoB is now borrowing strength from the IMF and dictates the bureaucrats. The bureaucrats cannot misguide the govt politicians because the IMF is watching from behind their back

I believe, with IMF behind the govt as the watchdog, fiscal discipline will be established.

 

[Bengal71]

Pathetic to watch someone keenly hoping for someone else's failure to feel better about their own failure. They can't uplift themselves from the deepshit they are in but will try and see if they can somehow find a spin to describe someone else as a failure.

Amar sathe pare nai, amar guer sathe parse. Bloody losers!

 

[X-ray Papa]

They should stop buying iPhones

You should stop drinking cow pee

 

[bluesky]

I ask @Imran Khan to watch the video to know the economic reality of BD and Pakistan instead of opening threads to deny the achievements so far of Bangladesh.

Here the commentators say, BD will grow by 7.2% and Pakistan 0.4%. So, what is your take on it? Instead of getting jealous of BD, Pakistanis should work hard to raise the strength of their country's economy.

Now, I would not expect @Imran Khan to come out with his 30,000 billionaires formula for Pakistan as if it is a yardstick to measure a country's economic strength. Very silly at best.