The official international reserve stood at US$3.557 billion on Wednesday last, according to Bangladesh Bank figures.

"The reserve will again drop by around US$300 million next week due to a scheduled bimonthly payment of Asian Clearing Union (ACU)," a senior central bank official said.

He, however, expected the uptrend to continue "due to robust exports and remittances against restrained imports."

The reserve was around US$3 billion at the end of June 1995, but started to plunge below $1 billion in 2001. The reserve was hovering just over US$3 billion during the fiscal 2005-06.

A short-term outlook by a central bank official suggested that the reserve position could be maintained despite continued pressure on petroleum price.

He said the present momentum in exports and remittance would continue during the current fiscal year to maintain the level of reserve while a US$330 million Rupali Bank deal would further contribute to it.

The buyer of the Rupali Bank is expected to inject further capital to strengthen their operation here, he added.

"Increased receipts of export proceeds, lower import payments and repayments of foreign currency loans by commercial banks simultaneously contributed to swell the reserve position," a senior Bangladesh Bank official told the news agency.

He said deferred payments against exports were coming at this time against low import-payment pressure while the commercial banks started repaying on their foreign currency loans from the central bank two years back amid supply shortage of foreign exchange in the money market.

"The repayments by commercial banks were due to liquidity improvements in the inter-bank money market," he added.

Exports grew about 22 percent against a lower import growth of 11 percent during the fiscal 2005-06 while remittance grew at 24 percent.

The central bank official sees the reserve position "nominally encouraging" despite some pressures the country experienced during the last two years, mainly from the increased prices of petroleum products.

The reserve increased benefiting from the free-float of exchange rate, he said, adding: "It would not have happened if we kept the US Dollar pegged at Tk 60."

The free floatation might have put some pressure on the inflation rate, the official said, but hastened to add that 7 percent inflation is not too much compared to some other countries who are suffering from much higher inflation.

Replying to a question, the official said foreign aid remained more or less at the same level. Rather, it is now a bit lower at this period of high reserve than they were in the last fiscal.

Total aid disbursement during FY 2005-06 stood at US$1241.21 million compared to US$1260.00 million during the same period of the preceding year, according to the Bangladesh Bank figures.

Net foreign aid during FY 2005-06 stood at US$752.21 million compared to US$811.00 million during the same period of the last fiscal.