Foreign Reserves Dip Following Acknowledged Payments

Bangladesh’s foreign currency reserves have declined slightly after the settlement of payments through the Asian Clearing Union (ACU), despite continued robust inflows from remittances. The central bank has maintained its active purchases of US dollars from the market, leveraging high remittance flows to support reserve levels.

According to the latest data, the country’s foreign reserves had risen to $35.49 billion before the ACU settlements. However, following payments of $1.37 billion for January and February, reserves dropped to $34.10 billion. Under the International Monetary Fund’s (IMF) Balance of Payments Manual Sixth Edition (BPM6) methodology, the reserves are recorded at $29.38 billion.

Historical Reserve Trends

The highest foreign reserves in Bangladesh’s history were recorded at $48 billion in August 2021. Subsequent large-scale dollar sales led to a steady decline, reaching $20.48 billion just before the change of government.

Since the interim government assumed office, tighter measures against illicit capital outflows have strengthened legal channels for remittance. As a result, remittance inflows have continued to grow, helping stabilise the exchange rate.

Remittance Growth

From the beginning of the current fiscal year until 7 March, expatriates sent a total of $23.53 billion in remittances, compared with $19.26 billion during the same period last year. This represents an increase of more than 22 per cent.

The sustained inflow of dollars has played a crucial role in maintaining the exchange rate around BDT 122 per USD, following a growth of nearly 27 per cent in remittance last fiscal year.

Analysts note that the combination of growing remittance inflows and effective management of the exchange market has contributed to stabilising the taka-dollar rate, even amid global currency volatility. Continued monitoring of ACU obligations and external payments will remain critical to sustaining reserve adequacy in the coming months.