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Exports and remittances are increasing amid import controls. At this time, the banks are taking money by keeping dollars in the central bank under currency swap. This increases the foreign exchange reserves. Reserves rose to $21.15 billion on Wednesday from $20.85 billion last Monday.
Earlier last week the reserves were 20.58 billion dollars. Last month it was around 19 billion. However, after the payment of more than one billion dollars by the Asian Clearing Union (ACU) next week, the reserves will decrease again, said those concerned.
According to the data of Bangladesh Bank, in August 2021, the reserve crossed the highest level in the history of the country by 48 billion dollars. Reserves were increased at that time in various ways including taking loans from abroad. Then the central bank sold more than $29 billion due to the crisis. By doing this, it gradually fell to 19.30 billion dollars at the end of last November. Then it increased again to 21.86 billion in December. However, at the end of January, it decreased again to 19.96 billion dollars. Now the reserves are increasing again as a result of the swap.
Bankers said that due to various uncertainties around the elections, many expatriates or exporters were holding dollars. The central bank has taken various initiatives to bring these dollars to the country. Last December, through a directive, remittance beneficiaries were also allowed to open foreign currency accounts and keep dollars. In contrast, the interest rate is more than 7 to 9 percent. Apart from this, if you open an RFCD account after returning from a foreign trip, you are paying more than 7 percent interest by keeping up to $10,000. On the other hand, bringing money into the country through offshore banking units is being encouraged in various ways. Overall, the situation is improving.
According to the data of Bangladesh Bank, in the first two months of this year (January-February) 428 million dollars remittances have arrived in the banking channel, which is 76 million dollars or 21.59 percent more than the same period last year. Due to low remittances at the beginning of the current fiscal year 2023-24, expatriate income increased only $105 million or 7.51 percent in the 8 months of the fiscal year (July-February). During this time, expatriates sent a total of 1 thousand 506 million dollars to the country. In the same period of last financial year which was 1 thousand 401 million dollars.
Along with increasing remittances, export earnings are also increasing. Exports in the first 8 months till last February were 3 thousand 845 million dollars. Compared to the same period of the previous financial year, which is 3.71 percent higher. Again, imports have been reduced through various regulatory measures. LC settlement decreased by 15.37 percent in the 7 months till January of the current financial year. Imports decreased by 15.81 percent last fiscal year. As of Tuesday, some banks have kept around $78.3 million with the central bank under the currency swap policy. Apart from this, Bangladesh Bank has not been selling dollars from the reserve for some time. Overall, the foreign exchange reserve situation has improved.
Awakening/Economics/SSK
