Forex reserves touch new milestone

Despite a global economic recession caused by Coronavirus pandemic, the country's foreign exchange reserves have made a new history to stand at $44.02 billion on Wednesday. 

Experts said record growth of remittance inflows, moderate export earnings and low import expenditure mainly helped to increase the reserves.

Within 10 months, the reserves increased by almost $10 billion, the forex reserves crossed $34 billion, $35 billion, $36 billion, $37 billion, $38 billion, $39 billion, $40 billion, $41 billion, $42 billion, $43 billion and $44 billion-mark for the first time respectively, according to Bangladesh Bank (BB) data.

The previous highest reserves amounting to $33.68 billion was recorded on September 5, 2017.

Bankers said the government has taken time befitting initiatives to maintain healthy reserves.

The reserves are adequate to cover about eight months’ import payment for the country of 160 million people, they said.

However, remittance inflow increased to $14.9 billion between July and January in current fiscal, up 34.95 percent over the same period of previous year despite the Covid-19-induced ongoing global economic recession and fall in oil prices.

In the first half of this fiscal year, imports decreased by 6.8 percent to $25.22 billion over the same period of previous fiscal.

An official of Bangladesh Bank (BB) mentioned that initiatives were taken by the government timely at various times which apparently resulted in an increased awareness among expatriate workers to send their hard-earned money through legal channels, pushing up the remittance inflow. 

Besides, the higher growth of remittance inflow is attributed to a budget announcement of 2 percent incentive to remitters on inward remittance for the last fiscal year.

On the other hand, another BB senior official said that higher gold prices in the global market as well as lower import bills have helped increase the country's forex reserves recently.

For utilizing reserves, the government has decided to use foreign exchange reserves for rapid implementation of productive projects to accelerate development work and recover from said Covid-19-induced economic losses, Finance Minister AHM Mustafa Kamal has recently said.

“In such cases, our money will remain within the country, won’t go out of the country,” he mentioned.

The Finance Minister expressed the hope that the forex reserves will reach $50 billion by 2021.