Bangladesh’s forex reserve drops to $23.56b as per IMF formula
The gross international reserve of Bangladesh in line with the International Monetary Fund guideline dropped to $23.56 billion on Wednesday from $24.17 billion on July 3.
However, the Bangladesh Bank’s conventional value of the foreign exchange reserve was $29.97 billion on the day.
The central bank compiled the gross international reserve (GIR) in line with the IMF’s Balance of Payments and International Investment Position Manual, 6th edition — also known as BPM6.
The GIR refers to a country’s total holding of foreign exchange assets that are readily available for use in international transactions.
The GIR primarily includes foreign currencies or other convertible currencies as well as gold, special drawing rights and reserve positions.
Conventionally, the Bangladesh Bank calculated the foreign reserve by adding the Export Development Fund and other foreign assets to the GIR.
But, as per the BPM6 guideline, the EDF and other non-available foreign assets for the immediate use in international transactions must be excluded from the reserve calculation.
Besides, the net foreign reserve, excluding one-year liabilities to non-resident Bangladeshis, could be significantly lower than the GIR amount.
Bangladesh is under an obligation to meet the IMF condition of maintaining the net reserve above $24 billion for availing a $4.7-billion loan package over a three-year period.
However, the BB governor on June 18 mentioned that the net foreign reserve would not be disclosed.
The Bangladeshi taka continues to weaken against the US dollar, reaching Tk 108.7 for each dollar on Monday, driven by a dollar shortage and a pressure on banks to settle import payments.
The Bangladesh Bank is releasing dollars from its foreign reserve to stabilise the foreign exchange market, but the rate remains volatile.
The central bank sold about $13.56 billion in FY23 and $7.62 billion in FY22 to banks.
The gross international reserve of Bangladesh in line with the International Monetary Fund guideline dropped to $23.56 billion on Wednesday from $24.17 billion on July 3.
However, the Bangladesh Bank’s conventional value of the foreign exchange reserve was $29.97 billion on the day.
The central bank compiled the gross international reserve (GIR) in line with the IMF’s Balance of Payments and International Investment Position Manual, 6th edition — also known as BPM6.
The GIR refers to a country’s total holding of foreign exchange assets that are readily available for use in international transactions.
The GIR primarily includes foreign currencies or other convertible currencies as well as gold, special drawing rights and reserve positions.
Conventionally, the Bangladesh Bank calculated the foreign reserve by adding the Export Development Fund and other foreign assets to the GIR.
But, as per the BPM6 guideline, the EDF and other non-available foreign assets for the immediate use in international transactions must be excluded from the reserve calculation.
Besides, the net foreign reserve, excluding one-year liabilities to non-resident Bangladeshis, could be significantly lower than the GIR amount.
Bangladesh is under an obligation to meet the IMF condition of maintaining the net reserve above $24 billion for availing a $4.7-billion loan package over a three-year period.
However, the BB governor on June 18 mentioned that the net foreign reserve would not be disclosed.
The Bangladeshi taka continues to weaken against the US dollar, reaching Tk 108.7 for each dollar on Monday, driven by a dollar shortage and a pressure on banks to settle import payments.
The Bangladesh Bank is releasing dollars from its foreign reserve to stabilise the foreign exchange market, but the rate remains volatile.
The central bank sold about $13.56 billion in FY23 and $7.62 billion in FY22 to banks.
