Forex reserves fall to $31.15 billion

The country's foreign exchange reserves declined sharply to $31.15 billion as the Bangladesh Bank cleared import bills to the tune of $1.05 billion to the Asian Clearing Union (ACU) on March 6.

The reserves stood at $44.14 billion in March last year, meaning that it decreased 29.4 per cent in a year, data from Bangladesh Bank showed.

An official of the banking watchdog said the reserves faced trouble after every ACU payment in recent months.

ACU is an arrangement to settle payments for intra-regional transactions among member countries, including Bangladesh.

India, Bhutan, Iran, the Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka are other members of the Tehran-headquartered ACU.

The member countries of the ACU clear their payments once in every two months.

Bangladesh's foreign exchange reserves soared to historic high of $48 billion in August 2021.

Although the deficit in trade and current accounts decreased significantly in the last couple of months, the shortfall in the financial account widened to a large extent worsening the volume of the reserves.

Under such a situation, the central bank injects dollars into banks almost every working day.

The BB supplied a record $10.16 billion to the market between July 1 and March 8 while injected $924 million in February and $216 million in March.

The central bank also provided $7.62 billion to banks in FY 2022-23, helping them to clear their import bills.