The foreign currency reserve of Bangladesh fell to $35.90 billion on Thursday as the Bangladesh Bank increased dollar sales to tackle the greenback crisis on the market, media reported.
The dollar crisis worsened amid high import payments, and low remittance and export earnings.
The BB sold $4.47 billion to banks between July 1 and October 20 while in the whole year of 2021-22, it injected a total of $7.62 billion into the financial market, according to the data of the central bank.
On Thursday, the central bank sold $60 million to banks at Tk 97 so that the banks could settle import payment obligations.
The reserve was $39.06 billion on August 31, 2022, and $46.2 billion on September 2021.
Settling high import payments was the main reason for the depletion of the forex reserve, BB officials said.
They said that imports were surging amid rising commodity prices, global supply chain disruptions, and the Russia-Ukraine war.
The country’s import payments increased to $12.7 billion in July-August from $10.85 billion in the same months of the past year.
The trade deficit widened by $270 million to $4.55 billion in the July-August period compared with that in the same period in the past financial year.
Amid increasing balance of payments pressure and falling foreign exchange reserve, the government requested financial support from the IMF in July.
As a result of the sharp increase in import payments compared with export earnings and remittance, demand for the dollar in the interbank money market has increased significantly in recent times.
Remittance and export earnings are prime tools for the bankers to meet the demand for dollars, but both are falling, the BB officials said.
Comment here