Bangladesh is witnessing a dip in its foreign exchange reserves, which have fallen below the $21 billion mark. The country’s central bank has been actively supporting local banks in meeting their import payment obligations, contributing to this decline.
Recent Data:
As per data from the Central Bank, the foreign exchange reserves totaled $20.96 billion as of Wednesday, down from $21.05 billion recorded on October 4.
Global Impact:
Analysts point to the far-reaching effects of the Russia-Ukraine conflict, which have led to a surge in commodity prices worldwide. This has particularly affected nations heavily reliant on imports, such as Bangladesh.
Central Bank Assistance:
Banks, particularly state-owned ones, are increasingly seeking US dollar support from the central bank to cover import expenses for entities like the Bangladesh Petroleum Corporation, Bangladesh Agricultural Development Corporation, and Bangladesh Chemical Industries Corporation. This assistance has contributed to the reduction of the country’s reserves.
Challenges in Exports:
Simultaneously, the nation is grappling with lower-than-anticipated earnings from exports and repatriation, which are the primary sources of US dollars for Bangladesh.
The combined impact of these factors highlights the importance of closely monitoring and managing the country’s foreign exchange reserves in a global landscape fraught with economic challenges.
