The foreign reserves of Bangladesh may drop below $35 billion in this week as the country is set to clear $1.32 billion in payment to the Asian Clearing Union (ACU), according to the media reports.
Bangladesh Bank Executive Director and spokesperson Abul Kalam Azad told the media that ACU payment is due on November 7.
Bangladesh’s forex reserves stood at $35.81 billion due to the USD selling spree of the central bank. From July 1 to November 3 of this fiscal year, the central bank sold over $5 billion to banks in a bid to cover their USD shortage.
Now banks, especially the state-run ones, are taking USD support from the central bank for settling import payments of Bangladesh Petroleum Corporation, Bangladesh Agricultural Development Corporation, and Bangladesh Chemical Industries Corporation among other government agencies.
The central bank injected a record $7.62 billion from its reserves into banks in the last fiscal year. The country’s forex reserves were highest at $48 billion in August of last year.
Asian Clearing Union (ACU) is a payment arrangement utilized by participants to settle payments for intra-regional transactions among the participating central banks on a net multilateral basis.
This is an arrangement made by participating countries Bangladesh, Bhutan, India, Iran, the Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka to settle import payments for intra-regional transactions.
Its headquarters is situated in Tehran, Iran. The central banks of the ACU member countries have to make payments every two months. It should be noted that the central bank on October 27 asked banks not to carry out transactions with Sri Lanka through the ACU mechanism.