Forex reserve crosses $21b, sets new record

The country's foreign exchange (forex) reserve crossed the US$21 billion-mark for the first time Monday, thanks to a robust growth of export earnings.
The reserve rose to $21.03 billion on the day, setting a new record, from $20.93 billion of the previous working day, according to the central bank statistics.
"The forex reserve has crossed the $21 billion-mark due mainly to higher growth of export earnings, rising trend of inward remittances and efficient forex reserve management by the central bank," SK Sur Chowdhury, deputy governor of the Bangladesh Bank (BB), told the FE.
Earlier on April 10, the reserve first crossed the $20 billion mark but it was down to around $19.50 billion after paying a $1.17 billion on May 7 to the Asian Clearing Union (ACU) against imports during the March-April period of the current calendar year.
Mr. Sur, also assigned to look after forex reserve and treasury management, said the country will be able to settle more than six months' import bills with the existing forex reserve.
The country's overall exports grew by 12.56 per cent to a record $27.38 billion in the July-May period of the current fiscal year (FY) 2013-14 compared to the same period last year.
Talking to the FE, another BB official said the country received $593.42 million as remittances between June 1 and June 13 from Bangladeshi nationals who are working abroad.
"We expect that the inflow of remittances may touch $1.20 billion by the end of this month ahead of the holy month of Ramadan," the BB official said. "The central bank is working hard to help boost the flow of inward remittances."
He also said the central bank earlier took a series of measures to encourage expatriate Bangladeshis to send their hard-earned money through the formal banking channel, instead of using illegal "hundi" system, to boost the country's foreign exchange reserves.
Buying the US dollar from the commercial banks directly has also contributed to increasing the forex reserve in the recent months, according to the BB official.
The central bank is purchasing the US currency from the banks to protect the interests of exporters and migrant workers by keeping the exchange rate of the local currency against the greenback stable.
A total of $5.0 billion was bought from the commercial banks between July 1 and June 16 of the FY 14 as part of the BB's intervention in the market, the BB official added.
The central banker said considering the forex reserve position, Bangladesh now stands second in South Asia after India whose foreign currency reserve is $313 billion followed by Pakistan's $13 billion.   
 "Higher forex reserve will help improve the country's rating position and encourage investors particularly foreign ones to invest in Bangladesh," he noted.