Dhaka, Bangladesh (BBN) – The pressure on Bangladesh’s foreign exchange reserve is mounting gradually due mainly to higher import payments for fuel, fertilizer and food grains, officials said on Thursday.
“The foreign exchange reserve faces pressure as import payments for fuel oils, fertilizer and food grains are increasing,” a senior official of the Bangladesh Bank (BB), the country’s central bank, told BBN in Dhaka.
Besides, the falling inflow of remittance in August compared to the previous month also pushed the pressure on foreign exchange reserve further, he observed.
The central bank of Bangladesh is providing support to the commercial banks particularly the state-owned commercial banks (SCBs), using different monetary tools like overdraft (OD) facilities, aiming to keep the country’s inter-bank foreign exchange market stable.
The BB provided OD facilities of US$38 million more on Thursday to a SCB for settlement of its fuel oil import bills, they added.
On Tuesday last, the BB offered OD facilities of $65 million to the same SCB for settlement of its fuel oil, food grains and fertilizer import bills.
The BB provided OD facilities worth around $700 million from July last to September 4 to the SCBs for making payment of their import bills, according to the officials.
Of the amount, at least $165 million have remained unadjusted with the central bank, they confirmed.
The central bank has continued its intervention in the inter-bank foreign exchange market by selling and buying US dollar directly and providing such short term facilities to the banks aiming to keep the market stable.
The country’s foreign exchange reserve stood at $5.24 billion on Thursday against $5.30 million of the previous day.
On Tuesday, the foreign exchange reserve came down to $5.32 billion from $5.96 billion after making a routine payment of $582 million to the Asian Clearing Union (ACU).
Meanwhile, the overall import grew by 23.61 per cent during the first month of the current fiscal compared to the corresponding period of the previous fiscal.
Import LCs worth $1.829 billion were settled in the month of July of fiscal 2008-09 as against that of $1.479 billion of the corresponding period of the previous fiscal, according to the central bank statistics.
However, the flow of inward remittances fell by 10.69 per cent in August from that of the previous month, as fallout of labour unrest in two Middle Eastern countries compelled a good number of Bangladeshi workers to return home.
The remittances from Bangladeshi nationals working abroad were estimated at $732.98 million in August this year while in July the remittances were worth $820.71 million, the BB’s data showed.