October 20, 2023
DHAKA – Bangladesh’s foreign exchange reserves have slipped below $21 billion as the central bank continues to support banks to facilitate imports.
The reserves stood at $20.96 billion on Wednesday, down from $21.05 billion on October 4, central bank figures showed.
The volatility in the global market driven by the Russia-Ukraine war has sent commodity prices higher, hitting the reserve level of import-dependent countries such as Bangladesh.
The country had forex reserves of about $40.7 billion in August 2021 and $33.4 billion at the end of 2021-22, according to a document of the International Monetary Fund (IMF).
Since banks, especially the state-run lenders, are taking US dollar support from the central bank to settle import payments of Bangladesh Petroleum Corporation, Bangladesh Agricultural Development Corporation, and Bangladesh Chemical Industries Corporation, among other agencies, the reserves have been falling continuously.
On the other hand, export and remittance receipts, the two biggest sources of US dollars for Bangladesh, have remained lower than expected levels.