Forex reserves cross $38b mark for the first time

The country's foreign exchange reserve exceeded the $38 billion mark for the first time on Tuesday amid a surge in remittance inflow coupled with lower import payments.

Central bank officials said the country's foreign exchange reserve reached $38.15 billion on the day after hitting the $37 billion marks on July 27.

In July, the country achieved a record amount worth $2.6 billion in remittances on the eve of Eid-ul-Azha after posting $18.21 billion remittance inflow in the fiscal year 2019-2020.

Although the inflow of remittance slowed down a bit in August with the banks fetching $863.10 million in the first two weeks of the month, the flow of remittance was more than enough to fulfil the import payment requirements of the banks.

To keep the dollar exchange rate stable, the central bank has been purchasing the greenback heavily from the local market thus resulting in higher reserve of the country, an official of the central bank said.

On the other hand, in the fiscal year 2019-2020, the country observed a significant drop in import payments due to the outbreak of the novel coronavirus that has impacted adversely over the global economy as well as on the country.

The country's import payments dropped by 8.56 percent to $50.69 billion in FY20 from $55.44 billion in FY19.

Although the export earnings dropped by 17.1 percent to $32.83 billion in FY20, the earnings rebounded in July.

In July of FY21, the country's export earnings increased by 0.59 percent to $3.91 billion year-on-year.

On top of these, the government's initiative to issue two percent cash incentive against the inward remittance played a key role in the huge inflow of remittance.

Last month, the finance ministry expressed gratitude to all migrants for remitting foreign currency to the country.

The country's foreign exchange reserve increased by $5 billion since June this year, and the reserve reached $34-billion, $35-billion and $36-billion marks in June.