$20bn reserve record in April

The Bangladesh Bank is optimistic that the forex reserves will cross the $20 billion mark within a month.

The $ 1.27 billion remittance by expatriates in March, the third highest monthly remittance inflow so far, will help reach this milestone, it says.

Bangladesh Bank’s Forex Reserve and Treasury Management Department General Manager Kazi Saidur Rahman said at the end of Wednesday the reserves stood at $19.49 billion - higher than any time in the past.

“If this trend in remittance flow and export earnings continues, we expect the reserve to exceed $ 20 billion before paying the Asian Clearing Union’s import bills in the first week of May,” he said.

On Feb 19, the reserve surged above $ 19 billion for the first time. It dropped below that mark again on Mar 5 after the ACU’s $ 960 million import bills for January and February were cleared.
The ACU bills have to be paid every two months.

On Mar 19, the reserve again went past $ 19 billion because of growing export earnings and remittances.

Saidur Rahman said a halt to food imports had also contributed to the unprecedented forex reserve growth.

On Dec 10, 2012 it was $ 10 billion. On May 7 last year, it crossed $ 15 billion, and on Dec 19 rose above $ 18 billion for the first time.

By international standards, a country should have, at any given point in time, enough foreign currency to pay off at least three months’ import bills.

Saidur Rahman said expatriates had sent $ 1.27 billion in March, eight percent higher than February remittances, and four percent more than the figures of March last year.

Central bank’s data on remittance show the highest amount in a month - $ 1.45 billion - came in October 2012, and the second highest - $ 1.32 billion - in Jan 2013.

However, in the first nine months of the current fiscal, the remittance flow was 5.77 percent less than what it was during the same period in the last financial year.

Rahman said the remittance flow had increased in the past few months. He attributed the upswing to greater disposable income among expatriates in Saudi Arabia, the largest labour market for Bangladesh.
During the earlier part of the financial year they were a bit financially cramped in meeting extra expenses to renew their work permits.

“Now, they don’t have to meet that cost,” he said.