Bangladesh鈥檚 gross foreign exchange reserve, calculated as per the International Monetary Fund鈥檚 guidelines, has dropped to $18.46 billion, following a $1.5-billion payment to the Asian Clearing Union against import bills for September and October.
According to Bangladesh Bank data, the reserve fell to this level on November 10, shortly after standing at over $20 billion on November 7.
The payment is made in every two months.
However, according to conventional valuation by the Bangladesh Bank, the foreign exchange reserve dropped to $24.19 billion.
The Asian Clearing Union is a payment settlement forum whereby the participants settle payments for intra-regional transactions through the participating central banks on a net multilateral basis.
Payment obligations of transactions among Bangladesh, Bhutan, India, Iran, the Maldives, Myanmar, Nepal, Pakistan and Sri Lanka are settled through the ACU payment system.
However, high overdue and current import payments have hindered reserve growth even though remittance inflows and export earnings rise.
Banks have had to use dollars for these payments, keeping the reserve volume from building up further.
The BB stopped selling dollars directly from its reserve to banks and instead has sourced dollars from the interbank market to meet government obligations.
This means banks must cover all import payments with their own foreign currency, preventing reserve accumulation.
BB officials said that remittance inflows surged after political changes on August 5, reaching $8.93 billion in July-September of the 2024-25 financial year, compared with those of $6.87 billion in the same period of the past year.
The BB sold about $34 billion from its reserve in the past three financial years, which contributed most to depletion of reserve. The reserve was $48 billion in August 2021.
The Bangladesh Bank adheres to the IMF鈥檚 Balance of Payments and International Investment Position Manual, 6th edition (BPM6), for calculating both the gross international reserve and the net international reserve.
The Bangladeshi taka weakened against the US dollar, reaching Tk聽120 for a dollar, driven by a dollar shortage and pressures on banks to settle import payments.
The exchange rate per dollar was Tk聽84.81 in June 2021, Tk聽93.45 in June 2022 and Tk聽106 in June 2023.
This ongoing dollar crisis has significantly impacted banks鈥� ability to settle import payments and open letters of credit, creating challenges for businesses.
