Reserves drop to $19.94 billion
The reserves have declined by 38.11% in a year, down from $32.22 billion recorded on 31 January last year.
The country's gross reserves experienced a further decline, falling to $19.94 billion on Thursday.
This marks a drop of $83 million from $20.02 billion in one week, according to calculations following the BPM-6 method prescribed by the International Monetary Fund.
Bank insiders attribute the depleting health of the reserves to the continuous selling of dollars by the central bank.
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Former Bangladesh Bank governor Saleh Uddin Ahmed told The Business Standard that reserves are decreasing because the Bangladesh Bank is constantly selling dollars while the inflow of foreign currency has decreased.
He said the main reason for the dollar crisis in Bangladesh is the decrease in inflows and that it will not end until the inflows increase.
Questioning the government's restrictions on imports to reduce the outflow of dollars, Saleh Uddin said, "How long will this last? The restriction will need to be removed at some point for the sake of the country. If capital machinery is not imported from abroad, the country's production will be disrupted, employment will decrease, and national growth will decrease along with it. So, these restrictions have to be withdrawn at some point."
He also blamed the decrease in export earnings and remittances for the dollar crisis, urging the need to increase export and remittance income.
He also noted that any increase in the incentive on remittance will not solve the problem.
"Another method must be thought of, such as the diversification of exports. Our country's export sector is dependent on only one product (manufactured garments). Exports should be encouraged with incentives in other sectors like ready-made garments. Besides, it is very important to create export markets outside of Europe and America," the economist added.
Saleh Uddin also said another way to solve the dollar crisis is foreign investment.
"Market regulation may not benefit from crawling pegs. If the country can be made investment-friendly, the dollar inflow will increase," he added.
