Covid hits central bank income from reserves

The central bank's income from the investment of foreign exchange reserves saw substantial decline by Tk1,000 crore in FY20 due to the pandemic.

The income fell by 17% due to a cut in interest rate of the central banks worldwide after the outbreak of Covid-19.

The information was disclosed at the annual report of Fiscal Year 2019-20.

Foreign exchange reserves which mostly remain invested in foreign banks crossed $42 billion during the pandemic.

The sharp rise in reserves is attributed to the high inflow of remittance and a slight rebound in export amid the slow import expenditure.

However, the total operating income excluding the foreign currency revaluation surged around 14% to Tk5,759 crore in FY20. The income was Tk4,422 crore in FY19.

Its operating profit including the currency revaluation is Tk6,186 crore in FY20 compared to Tk5,812 core in the previous fiscal.

In Fiscal Year 2019-20, the operating income increased by Tk1,043 crore to Tk8,608 crore.

On the other hand, the total operating income of the bank including the foreign currency revaluation increased by Tk80 crore to Tk9,035 crore in comparison with Tk8,955 crore in FY19.

When the pandemic broke out in many countries in March last year, the US, the UK, Australia, Hong Kong, Norway, Pakistan, Saudi Arabia and many other countries cut their interest rates.

The total expenditure of the bank decreased by Tk293 core to Tk2,849 crore in FY20 while it was Tk3,142 crore in FY19.

In the last fiscal year of FY19-20, the Bangladesh Bank's foreign currency and local currency financial assets increased 10% and 45% respectively.