The foreign currency reserves have dropped below $30 billion again, two weeks after they slipped down the mark for the first time in almost seven years.
Bangladesh Bank data updated on Thursday showed the reserves stood at $29.96 billion.
After the end of April, the reserves were $30.96 billion, down from $41.82 billion a year ago.
After the government paid off $1.1 billion in import bills to the Asian Clearing Union, or ACU, for March and April, the reserves fell to $29.7 billion on May 8.
The last time the reserves were below $30 billion before that was in June 2016.
Continued efforts to curb imports for saving dollars have led to a fall in the amount of letters of credit every month.
On an average, Bangladesh is spending $6.5 billion on imports now as it needs to pay for products that had been brought earlier.
In the first 24 days of May, the central bank paid nearly $1 billion for imports.
In January, the International Monetary Fund projected that Bangladesh’s forex reserves would slip below $30 billion by the end of 2022-23 financial year amid the ongoing global economic crisis.
The IMF made the forecast while evaluating Bangladesh’s proposal for a $4.7 billion loan.
However, the IMF also predicted that Bangladesh’s reserves would climb to $34 billion by the end of the 2023-24 financial year.
According to the central bank, the reserves stood at $21.55 billion in June 2014. The upward trend then began pushing the reserves up, riding on export earnings and remittances.
It reached $32.68 billion in 2019 before surging to $43.16 billion at the end of FY2020 and $46.15 billion the following year. The leaps in foreign currencies occurred due to Bangladeshi expatriates returning to the country during the COVID pandemic along with a drastic drop in import expenditures in that period.
In October 2020, the reserves hit the $40 billion milestone for the first time before peaking to the highest-ever in the country’s history at $48.06 billion in August the following year.
As the COVID cases gradually ebbed, the wheels of economy began turning once again and imports began rising, causing the reserves to fall.
The economy then faced a new gauntlet after Russia invaded Ukraine in February last year.