Bangladesh’s foreign exchange reserves currently stand at $34.47 billion after it paid $1.3 billion to the Asian Clearing Union (ACU) for September-October.
The ACU facilitates payments between its member countries like Bangladesh, Bhutan, India, Iran, Myanmar, Nepal, Pakistan, Sri Lanka, and the Maldives. Member countries can use the payment gateway to transact monetary transactions for regional imports. A two-month payment period is followed by the clearing of the bills. As a result of a low import bill and high remittance inflows, the Bangladesh Bank bought around $8 billion from banks in FY21.
Based on data from the central bank, overall imports, including those from Asian countries, have been declining gradually since July. According to the Bangladesh Bank, the ACU import bill dropped from $1.96 billion in May-June to $1.75 billion in July-August.
To boost remittances, banks raised the remittance rate for doctors, engineers, lawyers, bankers, nurses, and other expatriates with white-collar jobs by Tk7.5 to Tk107, where after the exchange, they used to get Tk99.5 per doller.
To stabilize the market, the central bank has been selling the greenback from its reserve. During the first four months of the current fiscal year, the reserve sales totaled $5.14 billion, while they reached a record $7.67 billion in FY22.
At Inflows of remittances provided a brief boost to fast-depleting reserves at the start of the current fiscal year. Bangladesh received over $4 billion in remittances in the first two months of FY23.
In September, however, the remittance flow stalled following the uniform dollar rate. In October, the country received $1.52 billion in remittances, the lowest in eight months. Over the past two months, exports have been experiencing a downturn. Over the past two months, the country’s exports have also declined due to the ongoing dollar crisis. Exporters fetched the country $4.35 billion in October, which was 7.85% low year-on-year, according to the Export Promotion Bureau (EPB).