Forex reserves stand at $23.56b in IMF formula
Staff Reporter :
Bangladesh’s foreign currency reserves stood at $23.56 billion as per the definition of the International Monetary Fund (IMF), according to the Bangladesh Bank data released on Thursday.
The amount is equal to Bangladesh’s four months’ import bills.
It comes after the BB agreed to compile and report the official gross international reserves as per the balance of payments and international investment position manual (BPM6) of the IMF.
The reserves, however, stood at $29.97 billion if the central bank’s traditional calculation method is followed.
The IMF has urged the central bank to report the actual reserves by deducting the funds allocated under the Export Development Fund (EDF) and other schemes.
The country’s foreign exchange reserves have been falling for more than a year due to higher import payments and lower than expected export earnings and remittance inflows.
As per the IMF’s loan condition, the country’s net foreign exchange reserves should be increased to $24.46 billion by the end of last June. On the other hand, the revenue collection target was not achieved as per the conditions.
As a result, concern over releasing second installment of the IMF loan is increasing as Bangladesh failed to achieve the two major conditions, according to the Finance Ministry sources.
They said the IMF board will take the situation into consideration before releasing the second installment. The second installment ($0.70 billion) is scheduled to be released in next November.
The IMF approved a $4.7 billion loan for Bangladesh last January in the context of a continuous decline in foreign exchange reserves.
Among many other loan conditions, the net forex reserves should be increased to $24.46 billion by the end of last June, $ 25.30 billion by the end of September and $ 26.81 billion
by the end of December this year.
On the other hand, the NBR managed to collect Tk 3.25 lakh crore against the IMF’s target of Tk 3.37 lakh crore by the end of June.
An official of the Finance Ministry said, “Reserves as well as revenue targets were not met. So there is a concern over releasing the second installment. However, non-fulfillment of these two conditions does not mean that the second installment will not be available.”
“The IMF will try to understand the pattern of the government action based on their recommendations. It does not appear to withdraw from the loan program if there is a rational reason for falling short of the targets,” he added.
