Bangladesh’s foreign exchange reserves surpassed $25 billion

Bangladesh’s foreign exchange reserves have surpassed the $25 billion mark ahead of Eid-ul-Fitr, providing a significant boost to the nation’s economy during this festive period. This milestone is largely attributed to a record inflow of remittances from the Bangladeshi diaspora.

Record Remittance Inflows

In the first 26 days of March, remittance inflows reached an unprecedented $2.94 billion, marking the highest monthly total in the country’s history. This surge underscores the vital role of the Bangladeshi expatriate community in bolstering the nation’s economy. ​

Gross and Net Reserves

According to data released by Bangladesh Bank on March 27, the country’s gross foreign exchange reserves have risen to $25.44 billion. However, when calculated using the International Monetary Fund’s (IMF) Balance of Payments and International Investment Position Manual (BPM6) methodology, which accounts for short-term liabilities, the net reserves stand at $20.29 billion. ​

Impact of Import Payments

Earlier in March, Bangladesh settled import bills amounting to $1.75 billion through the Asian Clearing Union (ACU). This payment temporarily reduced the gross reserves below $25 billion and the net reserves below $20 billion. Following this, the reserves under the BPM6 standard had dropped to $19.75 billion but have since rebounded above the $20 billion mark.

Economic Implications

The increase in foreign exchange reserves is a positive indicator for Bangladesh’s economy, especially as the nation prepares for Eid-ul-Fitr. Higher reserves enhance the country’s ability to manage import costs, service external debts, and maintain currency stability. The record remittance inflows have played a crucial role in replenishing the reserves, providing much-needed relief to the economy ahead of Eid.

Central Bank’s Outlook

Bangladesh Bank officials remain optimistic that continued remittance inflows will further stabilize the foreign exchange reserves. Speaking to the media, Bangladesh Bank’s spokesperson and Executive Director, Arif Hossain Khan, confirmed the latest reserve figures and expressed confidence in the country’s external financial position.

The surpassing of the $25 billion mark in foreign exchange reserves ahead of Eid-ul-Fitr is a testament to the resilience of Bangladesh’s economy and the unwavering support of its expatriate community. As the nation celebrates, this financial milestone offers a beacon of optimism for continued economic stability and growth.