Bangladesh鈥檚 gross foreign exchange reserves, calculated under International Monetary Fund (IMF) guidelines, have surpassed $20 billion again, driven by strong remittance inflows.
According to Bangladesh Bank data, reserves stood at $19.97 billion on January 31 but surpassed the $20 billion mark on Thursday.
Bankers said that high remittance inflow contributed most to the surge in reserve balance.
According to BB data, remittance inflow was $15.96 billion in July-January period in FY25 compared with that of $12.91 billion in the same period in FY24.
In addition, according to conventional valuation by the Bangladesh Bank, the foreign exchange reserve increased to $25.54 billion on Thursday from $25.20 billion on January 30.
The reserve level had previously declined from $21.6 billion on January 7 to $20 billion the next day following a $1.67-billion payment to the Asian Clearing Union (ACU) for November鈥揇ecember import bills.
Despite rising remittance inflows and export earnings, high overdue and current import payments have hindered reserve accumulation, as banks have had to use dollars for these obligations.
Additionally, the BB repaid $3.3 billion, or nearly 90 per cent, of foreign overdue payments between August 5, 2024, and December 30, 2024, following a political change, which also constrained reserve growth.
The ACU, a payment settlement system for transactions among Bangladesh, Bhutan, India, Iran, the Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka, facilitates payments every two months through participating central banks.
Bangladesh Bank has ceased direct dollar sales from reserves to banks, instead sourcing dollars from the interbank market to meet government obligations.
This has forced banks to manage all import payments using their own foreign currency holdings, further limiting reserve growth.
The BB follows the IMF鈥檚 Balance of Payments and International Investment Position Manual, 6th edition (BPM6), for calculating gross and net international reserves.
Meanwhile, the Bangladeshi taka has continued to weaken against the US dollar, reaching Tk 122 per dollar due to a dollar shortage and pressure on banks to settle import payments.
The exchange rate has steadily depreciated, from Tk 84.81 in June 2021 to Tk 93.45 in June 2022 and Tk 106 in June 2023.
This dollar crisis has made it difficult for banks to settle import payments and open letters of credit, creating challenges for businesses.
The trade deficit stood at $9.76 billion during July鈥揇ecember of FY25, down from $10.87 billion in the same period of FY24.
However, import payments rose by 3.5 percent year-on-year to $32 billion, reflecting growing demand for dollars.