Bangladesh posted a current account surplus of $3.53 billion in the first three months (July-September) of 2020-21 Fiscal Year, amid the onslaught of the Covid-19 pandemic.
The Bangladesh Bank made the disclosure in its latest weekly report on Thursday. In the same period during the last fiscal year, the country had posted a current account deficit of $715 million.
Bangladesh has an import-oriented economy. According to experts, the trade deficit dropped as the demand for imports also dipped due to the impacts of the Covid-19 pandemic, which in turn decreased the country's import payments.
This is why Bangladesh's current account surplus is now rising, they added.
The country spent $11.73 billion on imports in July-September of the current fiscal year, compared to $13.25 billion during the corresponding period of the FY2019-20 – indicating an 11% drop in import payments.
Bangladesh is also witnessing the return of a positive trend in export earnings during the July-September period of this fiscal year. The country posted $9.89 billion in export earnings during this time, compared to $9.64 billion during the same period last year.
Commenting on the matter, the Dhaka Chamber of Commerce & Industry's (DCCI) Former President, Asif Ibrahim told The Business Standard, "This trend shows that the exports have bounced back strongly following the first wave of the coronavirus.
"It is a good sign. However, we are worried about the second wave that has hit Europe."
He continued, "We have already observed that order quantities from some buyers are lower than their initial projections. So we need to keep our fingers crossed and hope that the positive trend continues."
Bangladesh received some $6.71 billion in remittance during the first three months (July-September) of the current fiscal year – indicating a nearly 50% growth compared to the corresponding period last year, according to the latest data from the central bank.
Dr Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue, says the growth in remittance has contributed significantly to the rise of Bangladesh's current account surplus.
He continued, "Aside from the boost in remittance inflow, a drop in imports has helped Bangladesh increase its foreign exchange reserves. Latest data from the Bangladesh Bank shows that the country achieved a forex reserve of $39.31 billion at the end of September this year.
"Which stood at $40.59 billion on 21 October. Bangladesh currently has enough reserves to pay for imports for nearly the next nine months."
This stable foreign currency reserves will help Bangladesh secure loans from foreign lenders, Dr Moazzem said. He also warned that if Bangladesh started spending this reserve, it could decrease lenders' confidence.