Forex reserves reduce by $534 million in a week as cenbank keeps selling dollars

The country's foreign exchange reserves have dropped by $534 million within a week, with bankers attributing the decline to continued dollar sales.

Bangladesh Bank data show the reserves have now fallen from $19.99 billion to $19.45 billion compared to a week earlier, according to the Balance of Payments and International Investment Position Manual (BPM6).

Officials said the growing inflow of remittances ahead of Eid and the introduction of currency swap agreements with commercial banks by the central bank have failed to address the downward trend in forex reserves.

The reserves were above $21 billion in the first week of March this year. It went below $19 billion after the clearance of $1.35 billion in Asian Clearing Union payments and the sale of US dollars to commercial banks by the central bank.

Commercial banks started currency swaps with the central bank on 20 February to keep the country's dollar market under control. Most of these swaps were of one-month duration.

As the first month has ended, commercial banks have started taking back dollars from the central bank. As a result, there has been a strain on the country's reserves.

According to the Bangladesh Bank, the reserves decreased by more than $1.5 billion on the 22nd day of this month.

The reserves have fallen to $19.45 billion, which was $21.15 billion on 6 March.