Bangladesh’s forex reserves cross $39bn for first time

Foreign exchange reserves have crossed $39 billion for the first time, an official of Bangladesh Bank says.

The reserves recorded at $39.4 billion on Tuesday are equivalent to about 10 months of import payments with $4 billion a month.

The new reserve milestone was reached due to increasing remittances and export earnings and boosted by the injection of $300 million from the Japan International Cooperation Agency (JICA), said Bangladesh Bank spokesperson and Executive Director Serajul Islam.

“We have reached a new reserve milestone in this time of the pandemic,” he told bdnews24.com on Tuesday.

According to data from the central bank, Bangladeshi expatriates sent $1.96 billion home during the month of August. The amount received in remittance payments in August of the previous year was $1.44 billion.

The total remittance in July was $2.6 billion, a monthly record.

Bangladesh’s exports rose 0.59 percent year-on-year to $3.91 billion in July. The amount was 13.4 percent higher than the target. Through this, Bangladesh’s exports reversed a decline of seven months.

After the coronavirus pandemic hit the country in March, export income dropped to $520 million in April, which was less than the remittance sent by the migrant workers in the same month.

Export earnings increased in May to $1.46 billion after the lockdown was lifted and factories began to roll, but growth lost pace.

In June, the last month of fiscal 2019-20, the export earnings rose to $2.71 billion.

Exports in the first month of the current fiscal year -- July -- was more than in any other month of the last fiscal year.

More than 10 million expatriates working across the globe remit funds home to Bangladesh playing a major role in the economy. Remittances account for 12 percent of the country’s gross domestic product.

The remittance inflow was disrupted after the coronavirus pandemic upended the world, but it shot up again in April.