Bangladesh forex reserves slip below $40bn, lowest in two years

Bangladesh’s foreign currency reserves have dropped below $40 billion for the first time in two years after the authorities paid import bills of the Asian Clearing Union.

The reserves were at $39.77 billion on Tuesday, Bangladesh Bank’s spokeesman Serajul Islam said. The foreign exchange reserves were $46.54 billion a year ago.

At the  current rates of import costs, it will be possible to clear import bills of six months.

The country’s exports have grown, but imports have surpassed exports while remittances have fallen.

Rising prices and shipping costs amid the recovery from the effects of the coronavirus pandemic and the Russia-Ukraine war have also put pressure on Bangladesh’s reserves, with the US dollar prices soaring against the taka.

The authorities have taken a slew of measures, including restrictions on the imports of luxury products, to save dollar reserves. The government has also suspended spending on low-priority projects and forieign tours of officials.

The measures have had some effects on the import costs, which fell to $6.74 billion in May from $7.5 billion on average in the previous months.