Forex reserve reaches new high of $17.1b

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Siddique Islam The country's foreign exchange (forex) reserve crossed the US$17 billion-mark for the first time Tuesday, thanks to a robust growth of export earnings as well as higher inflow of remittance, officials said. The reserve rose to $17.10 billion on the day, setting a new record, from $16.93 billion of the previous day, according to the central bank statistics. "The forex reserve has crossed the $17 billion-mark, mainly due to higher growth of export earnings along with remittance inflow recently," a senior official of the Bangladesh Bank (BB) told the FE. The country's overall exports grew by 21.24 per cent to a record high of $7.63 billion in the July-September period of the current fiscal year (FY), 2013-14, compared to the corresponding period of the previous year despite the economic slowdown in the European Union (EU) and the US. The government has set an export target of $30.50 billion for FY 14. On the other hand, Bangladesh received nearly $800 million as remittance between October 1 and October 18 from Bangladeshi nationals working abroad, the BB data showed. "Private sector credit from overseas sources has also contributed to increase the supply of foreign exchange," another BB official said. He also said the foreign exchange inflow has increased remarkably because of the Eid festival though the overall import rose significantly in September," another BB official said. The settlement of letters of credit (LCs), generally known as actual imports, rose by nearly 20 per cent to around $3.0 billion in September 2013 from $2.50 billion in August. On the other hand, opening of LCs against imports, generally known as import orders, increased by nearly 14 per cent to $3.12 billion in September from $2.74 billion of the previous month. The central banker said the country will be able to settle nearly six months' import bills with the existing forex reserve, which will also help keep the country's foreign exchange market stable. "The higher foreign exchange reserve encourages investors, particularly the foreign ones, to invest in the country." It will also help improve the country's rating position in near future, he added. The central bank's direct purchase of the US dollar from the commercial banks has also contributed to increase the forex reserve in the recent days. A total of $1.495 billion was bought from the commercial banks between July 1 and October 21 as part of the BB's intervention in the market. "We're buying the US dollar continuously to protect the interest of exporters and migrant workers by keeping the exchange rate of the local currency against the greenback stable," the BB official explained.