Bangladesh's gross foreign-exchange reserves surpassed US$35-billion mark on Thursday, driven by stronger remittance inflows and lower import-payment obligations, amid the ongoing geopolitical tensions.
The country's gross forex reserves rose to $35.04 billion on the day, $33.87 billion up from the previous day, according to the central bank's traditional calculation method.
Under the International Monetary Fund's (IMF) Balance of Payments International Investment Poisson Manual-six edition, generally known as BMP6, the forex reserves stood at $30.37 billion during the period under review from $30.20 billion.
"Hefty growth in inward remittances has helped boost the overall foreign exchange inflows rather than outflows, despite the Middle East conflict," a senior official of the Bangladesh Bank (BB) told The Financial Express (FE).
The amount of inward remittances grew by more than 21 per cent to $1.79 billion during the first 15 days of this month (April), up from $1.47 billion in the corresponding period of last year.
According to the central banker, the country's overall import payment obligations remain relatively low, at around $6.0 billion per month, despite the volatile oil prices.
On the other hand, the central bank intervened in the forex market again on Thursday by purchasing $50 million through auction from four banks in the interbank spot market in a bid to keep the exchange rate of the US dollar against the local currency stable.
The amount was bought under the Multiple Price Auction method and the cutoff rate was Tk 122.75 per dollar, according to the central bank officials.
A day earlier, the central bank resumed dollar purchases after a six-week pause, signalling renewed intervention in the market to help stabilise the exchange rate of the US dollar with the local currency, amid a surge in remittance inflows.
The central bank purchased $70 million worth of dollars on Wednesday from a Shariah-based bank in a similar auction.
The ongoing intervention is also contributing to a gradual strengthening of the country's foreign exchange reserves, according to the officials. "We're buying US dollars from banks directly to absorb the higher inflow of remittances," another BB official said, adding that such intervention had helped keep the exchange rate, thus encouraging both exporters and remitters.
The central bank of Bangladesh has so far bought $5.61 billion from banks directly since July 13 last under the prevailing free-floating exchange rate arrangement, the central bank's latest data showed.
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