Forex reserve crosses $5.0 billion mark

FE Team | Published: June 28, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
The country's foreign exchange reserve crossed US$5.0 billion mark Wednesday for the first time in Bangladesh's history, thanks to a robust growth in incoming remittances and increased flow of foreign aid.
The foreign exchange reserve rose to $5.02 billion on the day after the International Development Association (IDA), the World Bank's concessionary arm, released $100 million under the Education Sector Development Support Credit.
The credit from the IDA has 40 years to maturity with a 10-year grace period; and it carries a service charge of 0.75 per cent.
"The foreign exchange reserve crossed $5.0 billion mark due to release of a fund form the IDA and robust growth of remittances," a senior official of the Bangladesh Bank (BB) told the FE Wednesday.
He also said the country recently received around $30 million from the United Nations as payment for its contribution towards peacekeeping mission.
"The foreign exchange reserve may increase further shortly," the BB official expressed the hope.
Sources, however, said increased flow of remittances from Bangladeshis working abroad, reasonable export growth and a normal import trend have contributed to the rise in foreign exchange reserve.
Meanwhile, the flow of inward remittance touched nearly US$5.50 billion in the first 11 months of the current fiscal, recording a 25.02 per cent growth over the same period of the last fiscal.
According to the provisional estimates of the BB, the country received $5.46 billion as remittances during July-May period of fiscal 2006-07 against $4.37 billion in the same period of the previous fiscal.
On the other hand, the country's overall imports grew by 17.24 per cent during the first 10 months of current fiscal over the same period of the previous fiscal.
The letters of credit (LCs) against imports worth US$ 13.281 billion was settled during the July-April period of fiscal 2006-07 compared with $11.327 billion in the same period of the previous fiscal, the data showed.
The foreign exchange reserve has maintained a gradual upward trend also due to implementation of the Anti-Money Laundering Act to curb illegal money transfer using informal channels and a campaign for the expatriates to send their earnings through formal banking channel.
The reserve shot up to $3.07 billion in 1995, but it declined to $2.03 billion in June 1996. It continued to fall and touched its lowest at $1.00 billion in a decade in 2001.