Dhaka, Bangladesh (BBN) – Bangladesh’s foreign exchange (forex) reserve crossed the US$20 billion-mark for the first time on Thursday, thanks to a robust growth in export earnings in the recent months.
The reserve rose to $20.03 billion on the day, setting a new record, from $19.91 billion of the previous working day. It was $14.22 billion on April 10, 2013.
“Bangladesh’s forex reserve has crossed the $20 billion-mark, mainly due to higher growth in export earnings, rising trend of inward remittance, and lower import payment pressure,” Abu Hena Mohammad Razee Hassan, deputy governor of the Bangladesh Bank (BB), told reporters.
He also said the country will be able to settle more than six months’ import bills with the existing forex reserve.
Private sector credit from overseas sources and rising trend of inward remittances have also contributed to the increase in forex reserve recently, according to the BB deputy governor.
The import payment pressure has eased because of lower prices of both food and fuel in the global market, he explained.
“Higher forex reserve will help to improve the country’s rating position in the near future,” said Kazi Sayedur Rahman, general manager of Forex Reserve & Treasury Management Department of the central bank. “It will also help to encourage investors, particularly the foreign ones, to invest in Bangladesh.”
Considering the forex reserve position, Bangladesh now stands second in South Asia after India, whose foreign currency reserve is $303.67 billion, followed by Pakistan’s $9.86 billion.
“Direct purchase of the US dollar from commercial banks also contributed to the increase in the forex reserve in the recent months,” another BB official told BBN in Dhaka.
The central bank is purchasing the US currency continuously from the banks to protect the interest of exporters and migrant workers by keeping the exchange rate of the local currency against the greenback stable.
A total of $4.07 billion was bought from the commercial banks between July 1 and April 10 of this FY as part of the BB’s intervention in the market, the BB official added.
BBN/SSR/AD-10Apr14-11:55 pm (BST)
