Gross forex reserves cross $25b in steady rebound

A steady rebound on the back of changed milieus helps Bangladesh see its gross foreign-exchange reserves climb over US$25 billion again amid tightfisted import payments and higher remittances, officials said.
The forex reserves rose to $25.14 billion on October 15 from $24.97 billion on October 08 as per traditional calculation method of the Bangladesh Bank (BB). It was $24.86 billion on September 30.
As per the International Monetary Fund (IMF) Balance of Payments International Investment Poisson Manual-six edition, generally known as BMP6, the reserves rose to $19.93 billion during the period under review from $19.83 billion, according to the central bank's latest data released Wednesday.
The IMF-calculated figure was $19.86 billion on September 30.
Forex reserves--one of the major macroeconomic indicators of an economy--fell to $24.53 billion in terms of gross calculation by the central bank after clearing $1.37 billion import payments to the Asian Clearing Union (ACU) on September 07 last while the amount stood at $19.46 billion as per IMF's BMP6 arithmetic.
"Higher inflows of remittances have helped the country see forex reserves cross $25-billion mark further," a senior official of the central bank told the FE while replying to a query.
He also said Bangladesh received $1.21 billion in inward remittances during the first 14 days of October.
Meanwhile, the flow of inward remittances grew over 33 per cent to $6.54 billion in the first quarter (Q1) of the current fiscal year (FY), 2024-25, from $4.91 billion in the same period of FY '24.
This surge indicates a growing trend of expatriates utilising formal banking channels to send money to Bangladesh, bankers said, adding that this increase is a shift away from informal methods like hundi since the formation of the new government.
Besides, the purchasing of the US currency from the commercial banks directly has contributed to growth in the forex reserves in recent days, another central banker explains.
Nearly $50 million has so far been bought from the commercial banks in October as part of the regulator's intervention in the market, the central banker adds.
On the other hand, the selling of the greenback from the central bank almost suspended recently as part of a move to build up the recently depleted forex reserves in Bangladesh.
"We've sold only $10 million so far to the commercial banks in the month of October 2024," the BB official adds.
However, the actual import in terms of settlement of letters of credit (LCs) fell by 5.58 per cent to $16.10 billion during the July-September period of the FY'25, from $17.05 billion in the same period of the previous fiscal year, due to political unrest as well as uncertainty associated with post-unrest regime.
On the other hand, the opening of fresh LCs, generally known as import orders, dropped by 8.44 per cent to $15.65 billion in the first three months of this fiscal from $17.09 billion in the same period of FY'24.
Bangladesh's forex reserves had surged to $48.04 billion on 24 August 2021, setting a new record, from $46.58 billion of the previous working day. The rise was propelled by the receipt of $1.45 billion from the IMF as general allocation of Special Drawing Right (SDR).

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