After clearing the import bills of $1.1 billion to the Asian Clearing Union (ACU), the foreign currency reserve of the country once again fell below the $30 billion mark.
The ACU payment gateway covers monetary transactions by its nine member countries – Bangladesh, Bhutan, India, Iran, the Maldives, Myanmar, Nepal, Pakistan and Sri Lanka – for regional imports. The bills are cleared every two months.
Acting Spokesperson and Executive Director of the Bangladesh Bank Md Zakir Hossain Chowdhury told The Business Standard that $1,096 million ACU payments have been made.
Now, the forex reserve is $29.98 billion, he said.
Experts don't think the number is concerning. According to them, if a country has enough reserves to meet three-months of import bills, then the position is considered stable.
But, in times of global economic volatility, such as currently, reserves should have buffers to meet six months of import bills, they added.
Bangladesh has an average monthly import payment of around $7 billion.
The country's forex reserves stood at $31.16 billion as of 5 July. The reserves exceeded the $31 billion mark on 26 June after a span of two months, primarily due to the receipt of $925 million in budget support funds from international organisations like the Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB) and International Development Association (IDA).
Earlier in May, the Bangladesh Bank cleared $1.18 billion in import bills to the Union, which brought down the reserves to the $29 billion mark.
In August 2021, the country's reserves hit a record high of $48 billion.
Since then, it has been on a gradual fall with some fluctuations due to rising imports and falling remittance and export earnings amid reopenings after Covid-19 restrictions. The situation deteriorated further after the beginning of the Russia-Ukraine war.
Meanwhile, as part of efforts to maintain standard foreign exchange reserves, the government-imposed bans on luxury items in the middle of the last year, which helped decrease letter of credit openings.
According to the central bank, LC openings fell by more than 25% to $62.4 billion in the eleven months (July-May) of FY23, which was $83.58 billion in the same period of the last year.