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Forex reserves fall again

BB mulls exchange rate hike at the year-end

FE REPORT | November 24, 2022 00:00:00

The foreign-currency reserves fell again in recent days, after a slight rise, due mainly to increased demand for the US dollar for meeting import-payment obligations, officials said.

It stood at US$34.10 billion as on November 23, declining from $ 34.30 billion on November 17, Bangladesh Bank data made available on Wednesday showed.

In the last five days, the central bank sold $301 million to the banks to facilitate them meeting import payment obligations.

The reserves rose to $ 35.72 billion on November 01, but started falling after a regular bi-monthly payment of over $ 1.30 billion to the Asian Clearing Union (ACU) on November 08.

After that, the reserves moved up slightly again to reach $ 34.30 billion on November 17 from $ 34.25 billion on November 09 because of comparatively lower import payments during the period.

Seeking anonymity, a BB official said the reserves declined by around $ 200 million in the last five days.

He said the banks' demand for the greenback continued to grow to meet their foreign payment obligations, and on the other hand, the earnings from exports and remittance were on the wane.

"These are probably the reasons behind the fall of the forex reserves," the officer said, adding that the BB was planning to raise the exchange rate of US dollar and it would cross Tk 100 from existing Tk 98 by the end of the calendar year.

"It would help protect the reserve a bit as buying dollars from the central bank is still comparatively lower than the interbank rate," he added.

The drop in forex reserves, particularly the greenback, comes as a matter of concern for the economy which is under stress, dragged by higher import payments against lower export earnings and remittance inflows.

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