Forex reserves rise slightly past $42b

Bangladesh's foreign currency reserves have improved a little to stand at $42.21 billion on May 16, which was at $41.92 billion on May 10, enough to cover six months of imports, reports bdnews24.com.
A slight dip below the $42 billion mark recently was enough to make analysts nervous as the economy has already been suffering from sluggish inward remittances and skyrocketing inflation in the last quarter of the ongoing fiscal.
The central bank and the economists are saying that the decline of Covid-19 cases was met with a global hike in the prices of commodities as the Russia-Ukraine war caused the supply and delivery costs to go up. As a result, the demand for the US dollars rose and the Bangladeshi taka, like many other currencies in the world, began losing value.
Meanwhile, the higher dollar expenditure for imports and other necessities is putting pressure on the foreign exchange reserves. Bangladesh had a record $48.02 billion in August last year, sufficient to pay import bills for up to one year, but a steady decline has brought it down to the current level.
To stabilise an already dwindling economy and a currency market, a phenomenon some economists are calling "crisis at both ends", the central bank has devalued the taka against the US dollar last week, for the third time in two months.
The US dollar exchange rate for interbank transactions was revised down by Tk 0.80 to Tk 87.5, but several banks hiked dollar prices to around Tk 92-94 amid heightened demand.
The central bank has also toughened its policy for importing luxury and non-essential items like sports-utility vehicles, washing machines, air conditioners and refrigerators.
It had ordered the banks in April to keep the cash margin at 25 per cent for letters of credit to import the non-essential products.