Dhaka, Bangladesh (BBN)- Bangladesh’s foreign exchange (forex) reserve crossed the US$19 billion-mark for the first time on Wednesday, thanks to a robust growth of export earnings despite political uncertainty.
The reserve rose to $19.05 billion on the day, setting a new record, from $ 18.94 billion of the previous working day, according to the central bank statistics.
"The forex reserve has crossed the $19 billion-mark due mainly to higher growth of export earnings and rising trend of inward remittance,” a senior official of the Bangladesh Bank (BB) told BBN in Dhaka,
Bangladesh’s overall exports grew by 15.08 per cent to a record $17.44 billion in the July-January period of the current fiscal year (FY) 2013-14 compared to the same period last year despite the political turmoil, labour unrest and factory safety issues.
The central banker said the country will be able to settle more than six months' import bills with the existing forex reserve.
“Higher forex reserve will help to improve the country’s rating position in the near future,” the BB official said, adding that it also helps to encourage investors particularly foreign ones to invest in Bangladesh.
He also said private sector credit from overseas sources and purchasing the US dollar from the commercial banks have also contributed to increasing the forex reserve recently.
A total of $3.19 billion was bought from the commercial banks between July 1 and February 19 of the FY `14 as part of the BB's intervention in the market.
The central bank is buying the US dollar continuously from the banks directly to protect the interests of exporters and migrant workers by keeping the exchange rate of the local currency against the greenback stable, according to the central banker.
“Such intervention may continue in line with the market requirements,” another BB official said without elaborating.
On the other hand, the country received $ 654.28 million as remittances between February 1 and February 14 from Bangladeshi nationals who are working abroad, the central bank official said.
"We expect that the inflow of remittances may touch $ 1.30 billion by the end of this month," the BB official said adding that the central bank was working continuously to help boost the flow of inward remittances.
BBN/SSR/AD-19Feb14-7:43 pm (BST)