Foreign-exchange holdings in commercial banks got a record boost, as of June, largely for growing remittance receipts against lower import payments and some latest baits, sources have said.
Such rise in foreign currencies, the American greenback in particular, gives some respite to the $460-billion-plus economy having faced multipronged macroeconomic strains in recent times because of quick depletion of forex reserves, officials and bankers said.
In particular, existing facilities in the recently enacted Offshore Banking Act 2024 are also helping in alluring individuals or institutions having forex, contributing to the boost in forex reserves in bank vaults.
At the end of June 2024, gross foreign exchange held by commercial banks stood at $6.10 billion, up 21 per cent from $5.05 billion a month before.
The June count of outstanding forex holdings in banks is the second- highest in the banking history after $6.17 billion recorded in September 2023, according to the latest statistics available with Bangladesh Bank (BB).
Speaking on condition of anonymity, a BB official said the central bank as part of its reserves-boosting interventions introduced crawling peg with the exchange rate appreciated to Tk 117 a dollar from Tk 110 per dollar on May 8, 2024.
"It helps attract more remittance," the central banker says.
Simultaneously, the official mentions, the government recently enacted the Offshore Banking Act 2024 with lucrative offers to the depositors, such as 9.0-percent interest and allowing for deposit withdrawal whenever they want.
"These factors are mainly contributing to the rising inflow of foreign currencies and boosting the reserves situation," says the BB official.
The BB data show that the country's gross foreign reserves rose to $21.79 billion by the end of June from $18.65 billion a month back as per IMF's BPM6 arithmetic.
Managing director and CEO of Dhaka Bank PLC Emranul Huq says the banking sector received a record amount of remittances in June while import orders and settlement declined. "These are the main reasons behind the rising stock of forex in the commercial banks."
Bangladeshi expatriates working in various overseas destinations sent home $2.54 billion in the final month of the fiscal (June)--the highest in 47 months after July 2021, according the central bank's data.
Apart from increased remittance and import dips, top executive of Mutual Trust Bank (MTB) PLC Syed Mahbubur Rahman says, many of the scheduled banks managed to bring a good volume of forex through bilateral agreements with overseas lending agencies in a very recent time, improving the stock of forex with the banks.
Managing Director and CEO of Shahjalal Islami Bank PLC Mosleh Uddin Ahmed observes that the forex deposits in RFCD (resident foreign currency deposit account) and NFCD (non-resident foreign currency deposit account) continue increasing thanks to the existing facilities under the newly enacted offshore banking law.
"We're not asking the source of foreign currencies under the latest act and we're now offering the highest rate in history. So, inflow of forex keeps growing," the bank's top executive says, listing the forex-catching sweeteners.
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