BSS :
Bangladesh’s current account deficit has significantly improved in recent months, driven by a surge in remittance inflows, according to Bangladesh Bank Governor Dr. Ahsan H. Mansur.
During the first five months of the fiscal year 2024 (July-November), total remittance inflows reached $11.13 billion, reflecting an increase of $2.32 billion, or 26.4 percent, compared to the same period in the previous fiscal year, according to data from the Bangladesh Bank.
Remittance inflows initially declined by 3.2 percent in July amid political unrest and anti-government movements.
However, the situation improved sharply in the subsequent months, with inflows rising by 39 percent in August, 80 percent in September, 21 percent in October, and 14 percent in November, compared to the corresponding months of the previous year.
In a recent interview with BSS at the central bank headquarters, Dr. Mansur said, “There was a significant imbalance in the balance of payments, our reserves were falling, and the currency was depreciating rapidly.
However, after four months under the new government led by Nobel Laureate Professor Muhammad Yunus, we are now maintaining a near balance in our current account. The situation has shifted from largely negative to a sustainable and acceptable deficit.”
Regarding the financial account, Dr. Mansur stated that the deficit, which previously stood at almost $2 billion, has turned positive, registering a surplus of approximately $1 billion-a turnaround of over $2.5 billion.
He acknowledged that while the overall balance is still in deficit, visible improvements are being made.
The Governor further noted that export growth remains strong despite recent unrest. “Our export growth is currently over 15 percent.
This has enabled us to reduce arrears on foreign loans and will help resolve issues with international creditor banks, which provide counter-guarantees for our exports and imports,” he explained.
According to the latest data from the Export Promotion Bureau (EPB), Bangladesh’s export earnings in November recorded a healthy growth of 15.63 percent, reaching $4.12 billion. This marks an increase of $0.56 billion compared to $3.56 billion in November of the previous year.
Commenting on the exchange rate, Dr. Mansur said the foreign exchange market remains stable. “When we took charge, the exchange rate was around Taka 120 per US dollar, and it has remained steady around this level.
We are now operating under a stable exchange rate regime,” he stated.
He criticized the previous administration for depleting reserves by intervening in the foreign exchange market to influence the exchange rate.
“The reserves dropped from $48 billion to $20 billion. Currently, we are maintaining reserves at around $19 billion without selling foreign currency to support the exchange rate. Market-based stability is our approach,” Dr. Mansur emphasized.
He also mentioned that Bangladesh is expecting inflows from the World Bank and the Asian Development Bank in the coming days. “These inflows will add approximately $1.2 billion to our reserves, further stabilizing the current level,” he added.
The Governor concluded by reiterating the central bank’s commitment to maintaining a market-based exchange rate and managing reserves prudently to ensure long-term economic stability.
