Bangladesh has seen a significant $1.62 billion decline in its foreign exchange reserve in the first 20 days of September. With the latest development, the total reserve now stands at $21.45 billion. The figure was at $23.06 billion on 31 August, according to a recent report published by Bangladesh Bank on Thursday.
The decline has been attributed to several key factors that have impacted the overall economy, including low remittance inflow, import bill settlement, and offloading the greenback from the reserve.
The central bank officials said the inward remittance has dropped by a substantial 13.5 per cent over the past two months until August. Moreover, the authorities made a payment of $1.31 billion to the Asian Clearing Union (ACU) to settle import liabilities for the July-August period.
The central bank is also offloading US dollars to the open market, further straining the forex reserve.The International Monetary Fund (IMF) approved a loan proposal of $4.7 billion in January this year. During the approval, the global lender set a condition for the Bangladesh Bank to release the reserve data as per the BPM-6 method, in an effort to enhance transparency and reporting standards.
It also conditioned that the export development fund (EDF) and some other already allocated amounts be excluded from the reserve.The central bank is now publishing the reserve data in compliance with the condition.
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