Forex reserves cross $29 billion

Staff reporter :

Bangladesh’s foreign exchange reserves have crossed the $29 billion mark for the first time since the central bank began calculating reserves using the International Monetary Fund’s (IMF) methodology.

As of Monday, reserves stood at $29.47 billion, up from $29.23 billion on February 5, according to Bangladesh Bank (BB).

This is the highest level since July 12, 2023, when the BB started following the IMF’s Balance of Payments and International Investment Position Manual (BPM6). The BPM6 framework reflects readily available reserves that can cover import bills and other international obligations. The gradual replenishment of reserves over the past year has been driven by rising remittances and moderated import demand.

The turnaround accelerated after the fall of the Awami League government in August last year, as remittance inflows surged. Today, gross reserves reached $34.06 billion, the highest since November 2022. Continued dollar purchases by the central bank have also supported the rebound. Earlier, the BB had sold dollars to maintain the taka’s value.

However, at the start of the current fiscal year, it began buying US dollars from banks to curb depreciation and stabilize the exchange rate.

In total, the BB has purchased $4.3 billion from the interbank market through transparent auctions to build reserves during this fiscal year.

In its January–June monetary policy, Bangladesh Bank emphasized maintaining exchange rate flexibility, using strong remittance inflows and improved reserves to buffer against external shocks.

Bangladesh’s gross reserves had previously crossed $48 billion in August 2021, but fell sharply due to rising imports after the lifting of Covid-19 restrictions and global commodity price shocks amid the Russia-Ukraine war. By May 2024, overall dollar holdings had declined to $24 billion.

This milestone reflects the country’s improving external position, underpinned by remittance growth and careful monetary interventions.