The foreign exchange reserves reached $33 billion at the end of April following lower import payment pressure due to the coronavirus pandemic.
The country’s reserves again crossed the $33 billion-mark after almost 2 years, up about $1 billion over the corresponding time of previous year, according to Bangladesh Bank (BB) data.
It was $32.55 billion on March 24 in this year.
The lower import payment side by side moderate remittance inflow has pushed up foreign currency reserves in recent months, experts and bankers opined.
The reserves are sufficient to cover about 8 months’ imports for the country of 160 million people, an economist said.
Adel Haque, former BB joint director, told Bangladesh Post that if the country has strong foreign exchange reserves, it will be more capable of paying import bills, which will ultimately help raise its rating.
A BB higher official said higher gold prices in the global market as well as lower import bills have helped to increase the country's forex reserve recently.
He said foreign exchange market had faced a huge demand in the last several years for greenbacks because of higher payment for imported items, including capital machinery, fuel oils and food grains.
As part of its move, the central bank sold US dollars directly to the commercial banks to meet higher import payments putting foreign exchange reserves under pressure.
Otherwise, the reserves would have risen further in recent months, he added.
However, the central bank has recently resumed selling the greenback to banks for reducing extra pressure on the market, caused by lower remittance inflow following the ongoing coronavirus outbreak.
The BB directly sold $50 million to commercial banks on Monday to help settle their import payment obligations.
The central bank has so far sold $651 million to the banks, particularly the public sector ones, during this fiscal year (FY), 2019-20, to meet the growing demand for the greenback in the market.
Eminent economist Zahid Hussain said, the foreing exchange market has still faced a huge dollar crisis as export earnings and remittance flow have reduced due to the coronavirus pandemic.
On the other hand, fresh import orders are now lower, but deferred payments for the same are continuing.
He said the central bank should not intervene in the foreign exchange market as deprecation of local currency has helped to raise export earnings and remittance inflow.
However, the forex reserves was $31.27 billion in January, $32.23 billion in February, $31.78 billion in March, $32.12 billion in April, $31.34 billion in May, $32.71 billion in June, $32.09 billion in July, $32.77 billion in August, $31.83 billion in September, $32.43 billion in October, $31.72 billion in November and $32.68 billion in December in 2019, and $32.38 in January, $32.98 billion in February, $32.55 billion in March, $33 billion in April in 2020 respectively.
