Forex reserve crosses $9.0b

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Siddique Islam
Country's foreign exchange reserve crossed US$9.0 billion mark Tuesday as its inflow increased, officials said.
The foreign exchange reserve fell below US$ 9.0 billion Monday after a routine payment to the Asian Clearing Union (ACU) was made against the two months' imports from its member countries.
Bangladesh made a routine payment of US$746 million to the ACU against imports during the November-December period of the last calendar year.
The payment pushed the foreign exchange reserve down to US$8.955 billion Monday from $9.65 billion of the previous day. But it was stood at $9.007 billion Tuesday, a senior official of the Bangladesh Bank (BB) told the FE.
The country's foreign exchange reserve has been under pressure because of higher import payments, particularly for fuel oils, edible oil, fertilisers and power plant equipment.
The central banker, however, expects that the pressure on foreign currency reserve may ease gradually with higher inflow of inward remittance and steady growth of export earnings in the coming months.
"We hope that the inflow of remittance would touch $1.20 billion by the end of January," the BB official said, adding that the country received $250 million in remittance in the first week of this month.
The remittances from Bangladeshi nationals working abroad were estimated at $1.144 billion, the highest ever monthly inflow, in December 2011, up by $235.59 million than the previous month. In November 2011, the remittance was $908.79 million, the BB data showed.
The BB official also said the pressure on import payments will ease in the coming months as import orders have already recorded a negative growth.
The opening of fresh letters of credit (LCs) against imports, generally known as import orders, registered a negative growth of 2.09 per cent in July-November period of this fiscal compared to a positive one at 3.72 per cent in July-October period in the same fiscal.
"The declining trend in import orders continues in the current month largely because of lower imports of food grains," another BB official said without elaborating.
The country's overall import payments grew by 22.91 percent in the first five months of the current fiscal year (FY), mainly due to an increase in import bills for fuel oil.
Letters of credit (LCs) against imports worth US$ 14.95 billion were settled during July-November of FY '12 compared to those valued at $12.16 billion in the corresponding period last fiscal, according to the central bank statistics.
The amount of payment declined to $746 million in the last installment from $824 million earlier mainly due to decreased imports, particularly consumer goods, from other ACU member countries.
"Bangladesh is importing different consumer items and raw materials from the ACU member countries, particularly from India, to meet growing demand of those in the local market," the BB official noted.
Under the existing provisions, outstanding import bills and interest accrued thereof are settled at the end of every two months among its nine-member countries.
The ACU is a facility enjoyed by Bangladesh, Bhutan, India, Iran, Myanmar, Nepal, Pakistan, Sri Lanka and the Maldives under which intra-regional transactions are settled through central banks on a multilateral basis.
The union started its operation in November 1975 to boost trade relations among the member countries. Bangladesh and Myanmar joined the union as the sixth and the seventh members in 1976 and 1977 respectively. Bhutan joined the ACU on December 9, 1999, and the Maldives from January 2010.