Forex reserves touch new record to $41.2b

Country’s foreign currency reserves have crossed $41 billion for the first time to touch a new record of $41.2 billion on Thursday despite a global economic recession.

The previous highest reserves amounting to $40.1billion was recorded on October 8.

Market analysts said rapid growth of remittance inflows, and low import expenditure mainly helped to increase the reserves.

Besides, the government has taken time befitting initiatives to maintain healthy reserves, they added.

The reserves are adequate to cover about 10 months’ import payment for the country of 160 million people, an economist said.

Dr. Atiur Rahman, former Bangladesh Bank governor, told The Bangladesh Post, “The highest monthly remittance received continuing in the country’s history helping push foreign currency reserves up to $41.2 billion that is good news for the country.”

Within five months, the reserves increased by almost $8 billion, the forex reserves crossed $34 billion, $35 billion, $36 billion, $37 billion, $38 billion, $39 billion, $40 billion and $41 billion -mark for the first time respectively following lower import payment pressure and steady growth of remittance inflow during the crisis, according to data provided by Bangladesh Bank (BB).

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

However, Bangladesh’s remittance inflow registered a 10.85 percent growth in the just concluded 2019-20 fiscal year over the previous FY to hit a record high of $18.20 billion despite the Covid-19-induced ongoing global economic recession and fall in oil prices.

The country’s remittance inflow witnessed a rapid growth to stand at $6.71 billion in the first quarter (Q1) of the current fiscal, up 49 percent compared to that in the same period last fiscal.

This figure was $4.45 billion in Q1 in fiscal year 2019-2020.

An official of Bangladesh Bank (BB) mentioned timely initiatives were taken by the government on various occasions 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 declaration of 2 percent incentive to remitters on inward remittance for the last fiscal year.

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

The forex reserve was $10.36 billion in the FY 2011-12, $15.31 billion in the FY 2012-13, $21.55 billion in the FY 2013-14, $25.02 billion in the FY 2014-15, $30.16 billion in the FY 2015-16, $33.49 in the FY 2016-17, $32.94 billion in the FY 2017-18, $32.71 billion in the FY 2018-19, $35.85 billion in the FY 2019-20, $41.2 billion till October 29 in the FY 2020-21.