Foreign exchange reserves drop due to increase in import expenditure Foreign Exchange Reserves
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Foreign exchange reserves drop due to increase in import expenditure

Bangladesh Live News | @banglalivenews | 16 May 2022, 02:46 pm

Own Correspondent, Dhaka, May 16: The import expenditure has increased in the country. Foreign exchange earnings from exports and remittances are declining compared to that. As a result, the foreign exchange reserves have decreased by about seven billion US dollars in the last few months.

In August last year, the reserves increased to over USD 48 billion. The reserve was USD 44.11 billion on May 9 due to increase in import expenditure. About USD 224 crore was paid to the Asian Clearing Union (ACU) on May 10 from this reserve. Since then, foreign exchange reserves have dropped to USD 41.95 billion.

The current reserve in the foreign exchange reserves can cover the cost of imports for next six months. In August last year, Bangladesh had enough reserves (USD 48 billion) to cover eight months of import costs.

Meanwhile, LC margin has been fixed at 75 percent for imports of luxury goods and cars. The central bank is selling a lot of dollars to commercial banks so that no one fails to pay the import cost.

So far in the current financial year, the amount of dollar sales has stood at 502 crores. On the other hand, more than Tk 43,000 crore has come to the central bank from the market. So many dollars have been sold never before in one fiscal year.

According to the central bank, at the end of June 2013, the reserves were only USD 15.32 billion. In 2018, it more than doubled. At that time the reserve was 33.68 billion dollars. In August 2021, the reserves rose for the first time to reach 48.06 billion dollars.

However, the reserves have been steadily declining over the last few months. On May 8, reserves fell to USD 43.99 billion. After paying USD 2.24 billion to ACU on May 10, reserves fell below USD 42 billion.

Experts are saying the main reason for the decline in foreign exchange reserves is the decline in remittances with a sharp rise in import expenditure. A central bank official said the pressure on the reserves could increase if foreign currency loans begin to be repaid in the near future.