Reserves may fall below $21b after ACU payment
![Bangladesh's forex reserves Bangladesh's forex reserves](https://images.thedailystar.net/sites/default/files/styles/big_202/public/images/2023/11/29/dollar.jpg)
Bangladesh's foreign exchange reserves are likely to fall below $21 billion next week after the Bangladesh Bank clears import bills of around $1.35 billion with the Asian Clearing Union (ACU), said a senior central bank official.
The import payments are scheduled to be cleared on Thursday through ACU, an arrangement for settling payments for intra-regional transactions among eight countries, including India.
However, he said it would take an additional one or two days to adjust the forex reserves after the ACU payment.
The country's gross forex reserve stands at above $21 billion now as per calculations based on the International Monetary Fund's Balance of Payment Manual 6.
It is likely to fall to the $20 billion mark after the payment, as per the central bank official.
The gross reserve stood at $20.57 billion as of February 28.
The gross reserve has continued to rise in recent times due to a currency swap initiated by the central bank. The banking regulator mobilised more than $500 million from the banks in exchange for local currency till the end of February.
However, the currency swap is not helping raise net reserves because mobilising foreign currency through swap deals is a liability.
The forex reserves have continued to fall for the past two-and-a-half years as the nation has been contending with a US dollar crisis.
The central bank has also continued to sell US dollars from its reserves, but only to settle import bills of state-run enterprises.
In the post-pandemic period in 2021, the country's import payments started to rise faster than remittance earnings and exports, leading to a shortage of US dollars in banks.
The forex crisis intensified in the middle of 2022 due to the price increase of essential goods and other commodities in the global market, an impact of supply chain disruptions caused by lingering impacts of the pandemic and Russia-Ukraine war.
In order to help banks settle record import bills, the central bank pumped more than $28 billion into the banking sector from its reserves, a development that caused the reserves to halve in just two years.
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