Forex reserve likely to touch $5.5b by Nov

FE Team | Published: October 18, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
The country's foreign exchange reserve is expected to touch US$5.50 billion by early November for the first time because of disbursement of a soft loan by a multilateral donor agency and robust growth of remittances.
The World Bank (WB) is likely to release the International Development Association (IDA) credit worth US$ 75 million shortly.
"We are hopeful about receiving the fund from the World Bank shortly," a BB senior official told the FE Wednesday, adding that the fund will directly add to the country's foreign exchange reserve.
The government has already signed a loan agreement for $75 million with the IDA of the World Bank to help finance part of the fiscal 2007-08 resource gap incurred as a result of the floods.
The loan from the IDA, the World Bank's concessionary arm, will facilitate the government to continue its implementation of the Development Support Credit (DSC IV) programmes.
The IDA credit has 40 years to maturity, including a 10-year grace period, carrying a service charge of 0.75 per cent.
The foreign exchange reserve rose to $5.206 billion Wednesday following increased flow of remittances, reasonable export growth and a normal import trend, official sources said.
The flow of inward remittance jumped by around 26 per cent in September last over the previous month due to the advent of the holy month of Ramadan as well as Eid-ul-Fitr festival.
The remittances from Bangladeshi nationals working abroad were estimated at $592.78 million in September last, marking a raise by 25.86 per cent from the previous month. In August 2007, the remittance was worth $470.95 million.
"The foreign exchange reserve may fall slightly after making regular payment to the Asian Clearing Union (ACU) that generally comes to over $300 million," the BB official added.
Bangladesh will pay to the ACU by the first week of November next in line with the existing provisions of the eight-member organisation.
Under the existing provisions, settlement of the balance and accrued interests are made at the end of each two-month period among the member countries of ACU.
The ACU is an arrangement among Bangladesh, Bhutan, India, Iran, Myanmar, Nepal, Pakistan and Sri Lanka to settle payments for intra-regional transactions among the participating central banks on a multilateral basis.