Dhaka, Bangladesh (BBN)- Bangladesh’s foreign exchange (forex) reserve crossed the $18 billion-mark for the first time on Thursday, thanks to a robust growth of export earnings despite a series of domestic odds.
The reserve rose to $18.05 billion on the day, setting a new record, from $17.87 billion the previous day, according to the central bank statistics.
“The forex reserve has crossed the $18 billion-mark due mainly to higher growth of export earnings and lower pressure on import payments,” a senior official of the Bangladesh Bank (BB) told BBN in Dhaka.
He also said the release of fourth instalment of the International Monetary Fund (IMF) loan under its Extended Credit Facility (ECF) also contributed to improving the foreign exchange reserve.
“We’ve already received $140 million from the IMF loan under its ECF,” he noted.
The three-year ECF arrangement for Bangladesh was approved by the Executive Board of IMF on April 11, 2012 for a total amount about $982.5 million.
Bangladesh’s overall exports grew by 16.47 per cent to a record $9.75 billion in the July-October period of the current fiscal year (FY) 2013-14 compared to the same period last year despite the ongoing political turmoil, labour unrest and factory safety issues.
The government has set an export target of $30.50 billion for the FY ‘14, which began on July 1.
The central banker said the country will be able to settle more than six months’ import bills with the existing forex reserve, which will also help keep the country’s foreign exchange market stable.
“The higher foreign exchange reserve will help encourage investors, particularly foreign entrepreneurs, to invest in the country,” another BB official said, adding that it will also help improve the country’s rating position in the near future.
The central bank has purchased US dollars from the commercial banks directly which also contributed to increasing the forex reserve in the recent days.
A total of $2.28 billion was purchased from the commercial banks between July 1 and December 19 of the FY ‘14 as part of the BB’s intervention in the market.
“We’re buying the US currency continuously to protect the interests of exporters and migrant workers by keeping the exchange rate of the local currency against the greenback stable,” the Bangladesh Bank official explained.
BBN/SSR/AD-21Dec13-3:55 pm (BST)