Forex reserve crosses $44 billion for the first time

Hitting a new record, the country's foreign exchange reserves have exceeded $44 billion for the first time thanks to the upward trend of remittance and lower import payments, showed the central bank data.

Currently, the reserves stand at $44.03 billion.

On 29 December last year, the reserves touched the $43 billion milestone for the first time. On that day, the reserves stood at $43.17 billion.

On 4 February, the reserves again reached $43.02 billion which now crosses the $44 billion mark for the first time in Bangladesh's history.

The amount of reserves increased due to the surged remittances and lower import costs as compared to the last year.

Remittance inflow amounted to around $1.5 billion in the first 23 days of this month, which was $1.24 billion in the corresponding month of the previous year.

In the first seven months of the current financial year (July-January), remittances have increased by more than 35% compared to the same period of the previous year.

Meantime, import expenditure decreased in the first six months of the current fiscal year by about 6% as compared to the same period of the previous year.

Despite the rise in foreign exchange reserves, the exchange rate has remained stable as the central bank continued to buy dollars from the market.

Although there is a risk of inflation due to the increased supply of extra money in the market, the central bank said there was a little risk of inflation as people's income has declined due to the ongoing pandemic.

Due to the strong position of the reserves, Bangladesh has the capacity to meet the import cost of almost nine months.

Economists say the impact of Covid-19 has led to lower private investment and lower consumer spending, which has led to lower import costs.

Last year, Finance Minister AHM Mustafa Kamal hoped the reserves would exceed $50 billion by this year.