Bangladesh’s forex reserves cross $44bn

[bluesky]

Bangladesh’s forex reserves cross $44bn

The inflow of remittance is still in negative growth in the first nine months (July-March) of the current 2021-22 fiscal year

www.dhakatribune.com

Bangladesh’s forex reserves cross $44bn​

The inflow of remittance is still in negative growth in the first nine months (July-March) of the current 2021-22 fiscal year

Mehedi Hasan
UNB
April 4, 2022 8:52 PM

Bangladesh's forex reserves rose to $44.30 billion again after a month, thanks to growing inward remittance.

The forex reserve fell to $43.89 billion on March 6 this year after paying import bills of $2.16 billion to Asian Clearing Union (ACU). It was the lowest forex reserves for Bangladesh in the past year.
The export earnings and remittance inflows of $15.29 billion in nine months of the current (July-March) fiscal year (FY), pushed the foreign currency reserves to $44.30 billion on Sunday in contrast to a month ago.

Bangladesh Bank (BB) sources said that with the reserves, it will be possible to meet the import costs over five months. But even six months ago, Bangladesh Bank had reserves to meet the import cost of 10 months.

However, the inflow of remittance is still in negative growth in the first nine months (July-March) of the current 2021-22 fiscal year.

In these nine months, the expatriates have sent $15.3 billion in remittances. During the same period of the last fiscal year (2020-21), the expatriates sent $18.59 billion.

It shows that the inflow of inward remittance has decreased by 18% in nine months despite remittance inflow increasing by 24.45% in March compared to February. Md Serajul Islam, executive director and spokesperson of BB told UNB that remittance inflow in the banking channel is increasing gradually after raising the cash incentive to 2.5%.

The expatriates are taking Tk102.5 by sending Tk100 remittance in the hassles-free legal channel, he said.

Serajul hinted that the remittance inflow would increase in April for Ramadan and Eid as the expatriates usually send more money to their relatives in the country during the festival.
The inward remittance inflow of the last nine months of FY22 saw a decreasing trend compared with the similar months in FY21.

Bangladesh received remittances of $1.87 million in July, $1810.1 million in August, $1726.71 million in September, $1646.87 million in October, $1553.70 million in November, $1630.66 million in December, $1704.53 million in January, $1149.08 million in February and $1859.97 million in March of FY22.

In the same period of FY21, the remittance inflow was $2598.21million in July, $1963.94 million in August, $2151.05 million in September, $2102.16 million in October, $2078.74 million in November, $2050.65 million in December, $1961.91 million in January, $1780.59 million in February and $1910.98 million in March.

 

[TerryWood41]

Unlike a stable job with a salary, investments (and trading is one of the forms of investment) have a floating rate of return.

 

[Destranator]

I really hope the huge spike in imports earlier this year was a temporary adjustment and not a trend. We are screwed otherwise.

 

[salute]

I really hope the huge spike in imports earlier this year was a temporary adjustment and not a trend. We are screwed otherwise.

That import spike is with huge import protection which was allowed to placed as part of LDC. Once out of LDC, Bangladesh has to negotiate FTA's which involve give and take, then imagine the imports of luxuries like cars, motorcycle(everything else other than t shirts) and fuel. Bangladesh will go Pakistan's way.

 

[Destranator]

That import spike is with huge import protection which was allowed to placed as part of LDC. Once out of LDC, Bangladesh has to negotiate FTA's which involve give and take, then imagine the imports of luxuries like cars, motorcycle(everything else other than t shirts) and fuel. Bangladesh will go Pakistan's way.

"Getting out of LDC" is further down the line. Not relevant to what I was referring to.

 

[ARMalik]

I am really impressed with the progress BD is making. Good on BD - well done !

HONESTLY, INDEPENDENCE FROM PAKISTAN WAS THE BEST THING WHICH HAPPENED TO BD ! YOU GUYS ARE VERY LUCKY !

 

[bluesky]

In another newspaper report yesterday, I saw the foreign exchange reserves have come down to $33.4 billion. All because of imports payment. It was $80 billion in 2021.

I just hope there have been many imports of capital goods that will produce wealth and the situation will be reversed.

 

[Indos]

I really hope the huge spike in imports earlier this year was a temporary adjustment and not a trend. We are screwed otherwise.

That is due to high energy and commodities prices.

 

[pikkuboss]

In another newspaper report yesterday, I saw the foreign exchange reserves have come down to $33.4 billion. All because of imports payment. It was $80 billion in 2021.

I just hope there have been many imports of capital goods that will produce wealth and the situation will be reversed.

When did Bangladesh have $80 billion forex reserve? I don't think it crossed 50 ever.

 

[Destranator]

When did Bangladesh have $80 billion forex reserve? I don't think it crossed 50 ever.

@bluesky is talking about import bills there. I think he is projecting the total import bill for FY 2021-2022 to be $80 billion. It might be even higher.
"Bangladesh Bank data showed that the country in February this year was capable of paying import bills for 6.44 months when its foreign exchange reserve was $45.95 billion."

Bangladesh forex reserve dwindling amid high import bills

Bangladesh’s capacity to pay import bills has deteriorated at an alarming rate amid the fall of the country’s foreign exchange reserve in recent months against an unusual surge in imports. The country’s foreign exchange reserve...

www.newagebd.net

If we extrapolate that over 12 months, the total import bills for 2021-22 might exceed 85 billion.

 

[UKBengali]

That import spike is with huge import protection which was allowed to placed as part of LDC. Once out of LDC, Bangladesh has to negotiate FTA's which involve give and take, then imagine the imports of luxuries like cars, motorcycle(everything else other than t shirts) and fuel. Bangladesh will go Pakistan's way.

BD will put massive VAT on areas like cars that it wishes to discourage. As BD does not really have any car industry then it will not itself damage its own industries.

Motorcycles, BD already imports and so there will be not much change.

The main reason for elevated imports is that BD is importing increased amounts for infrastructure and to process in order to export finished goods.

While imports are rising the actual rise in exports in percentage amount is higher - imports have risen by around 20% this year from last while exports are up by 40%.

Not really too much to worry about as imports is being balanced by exports + remittances and so the foreign reserves will stay stable.

BD is by far the best run economy in S Asia and so please do not worry about any economic problems in BD - in 10-15 years it will become the centre of a great economic engine that will span BD, W Bengal, NE States, Nepal and Bhutan.

 

[salute]

BD will put massive VAT on areas like cars that it wishes to discourage. As BD does not really have any car industry then it will not itself damage its own industries.

Motorcycles, BD already imports and so there will be not much change.

The main reason for elevated imports is that BD is importing increased amounts for infrastructure and to process in order to export finished goods.

While imports are rising the actual rise in exports in percentage amount is higher - imports have risen by around 20% this year from last while exports are up by 40%.

Not really too much to worry about as imports is being balanced by exports + remittances and so the foreign reserves will stay stable.

BD is by far the best run economy in S Asia and so please do not worry about any economic problems in BD - in 10-15 years it will become the centre of a great economic engine that will span BD, W Bengal, NE States, Nepal and Bhutan.

Please speak factually.

In July-February of FY22, the country’s imports skyrocketed by $17.31 billion to $54.38 billion from $37.07 billion in the same period of FY21.

Besides, the country's current-account balance deteriorated further, hitting an 'all-time high' at $12.83 billion, following higher trade deficit along with lower flow of inward remittances during the period under review, they add.

The trade gap with the rest of the world increased more than 80 per cent or by $9.95 billion to $22.31 billion during the July-February period of FY 2021-22, from $12.36 billion in the same period of FY'21, according to the central bank's latest statistics, released Thursday.

During the period, import expenses ballooned nearly 47 per cent while export earnings recorded nearly 30-per cent growth.

Do you think we are all foolish like you?

 

[mb444]

Bangladesh maintains a trade deficit. In absolute terms it has increased but so has the economy. As a percentage of the economy it has not fluctuated much.

For actual information of BD check the link below.

BD trade deficit in numbers

Trade deficit is only side of the story. It does not take into consideration the economic activity and the value generation that is taking place internally in the country. As it states it is a trade deficit, not a measure of wealth of the country. Only indication is that even with a deficit BDs GDP is growing and the deficit is stable as a percentage of the GDP. This be because this deficit is occurring not because of luxury products but because of capital machinery and fuel in most instances which translates into higher GDP.

*****


BD has not yet ever achived $50bn reserves let alone $80bn. This is what happens if you read sanghi posts that exists to denigrate everyone.

 

[Destranator]

Bangladesh maintains a trade deficit. In absolute terms it has increased but so has the economy. As a percentage of the economy it has not fluctuated much.

For actual information of BD check the link below.

BD trade deficit in numbers

Trade deficit is only side of the story. It does not take into consideration the economic activity and the value generation that is taking place internally in the country. As it states it is a trade deficit, not a measure of wealth of the country. Only indication is that even with a deficit BDs GDP is growing and the deficit is stable as a percentage of the GDP. This be because this deficit is occurring not because of luxury products but because of capital machinery and fuel in most instances which translates into higher GDP.

Everyone needs to ignore the hindutva turd @bluesky , the moronic idiots grasp of sanity is highly suspect.


BD has not yet ever achived $50bn reserves let alone $80bn. This is what happens if you read sanghi posts that exists to denigrate everyone.

With growing purchase power, one can hope there will be increasing foreign and local investments in manufacturing import substitutes.
We need to arrest the growth in import of finished goods.
Manufacturing finished goods locally has the dual benefit of saving forex and creating decent paying (non-wage slavery) jobs. Export also becomes a possibility.

If we are to become a developed nation, we need at least 500 Walton groups up and running. It is frankly quite disappointing how other business groups have gotten no where near replicating Walton's success. There is a serious dearth of business acumen in this country. Our entrepreneurs lack imagination and persistence.

 

[UKBengali]

Everyone needs to ignore the hindutva turd @bluesky , the moronic idiots grasp of sanity is highly suspect.

I would go easy and he is actually from BD.

His problem is his lack of education and talking way above his qualification level.

As an example he has no idea that BD actually spends just 5% of it's revenues on debt repayment each year. This is in contrast to 40% for Pakistan last year.

When you add in that Pakistan spends no less than 25% of revenue on it's military(including nuclear weapons) while BD is at 10% then you can see the massive difference between the 2 countries - 65% of Pakistan tax revenues goes on debt servicing/military as opposed to 15% for BD.