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Foreign exchange reserves fall below $22bn

The foreign exchange reserves of Bangladesh Bank (BB) decreased to $21.5 billion after paying the $1.31 billion import bills of the Asian Clearing Union (ACU).

The foreign exchange reserves of Bangladesh have fallen in stress and continually decreased since easing the COVID-19 pandemic increasing the demand for imports, reports UNB.

Despite BB’s move to tighten the spending of US dollars on unnecessary goods import, the foreign exchange crisis was deeper as the inward remittances flow decreased and the repatriation of export proceeds was delayed.
The central bank paid $1.31 billion to ACU on Sunday and then the forex reserves stood at $21.50 billion. This is well short of the desired reserves of around $25 billion in September according to the conditions of an IMF loan.

The Asian Clearing Union (ACU) is a payment arrangement between the central banks of Bangladesh, Bhutan, India, Iran, Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka.

The BB is calculating forex reserves for gross, which was around $27.61 billion while the reserves decreased to $21.50 on Sunday calculating as per the universally accepted formula for counting reserves.

The Executive Director and spokesperson of BB told UNB that actual foreign exchange reserves fell below $22 billion after paying the ACU’s liabilities on Sunday.

He said that reserves usually would not stand in a constant figure as remittances, export earnings, and foreign grants are added to the foreign exchange continually.