Current account balance of payment stood at $200 million in July 2004, which was $158 million in July 2003. BB sources put the healthy BoP situation down to increased export and remittance. The situation has improved further recently, the sources added.

An official of the central bank said the healthy BoP means the country is better equipped to cope with any surge in import demand.

Foreign aid inflow has shot up by more than 365 percent to $382 million in the first two months of the current fiscal year from only $82 million in the corresponding period of the previous fiscal, the BB reports.

Sources attribute this upsurge to the World Bank's releasing $200 million in development support credit in August and slightly better implementation capacity of foreign aided projects since the last half of the previous fiscal, FY04.

This growth means this year the government will not be required to resort to high-interest local borrowing to cover its budget deficit.

Though Bangladesh receives foreign aid as fund for development projects and as commodity and food, in the first two months of FY05 it came entirely as project aid.

Foreign direct investment (FDI) also marked a slight increase, by 3.12 percent, in July 2004 when $33 million was invested, which was $32 million in July 2003.

The country's trade deficit also decreased significantly in July last, when it stood at $23 million, compared to $68 million in July 2003. This was possible due to a sharp rise in exports.

According to the BB report, in July-August exports registered a 26 percent rise.

In July-September quarter, remittance inflow grew by 14 percent to $863 million. The growth was only 0.88 percent in the corresponding quarter of previous fiscal year.