The country's forex reserves, although decreasing, are still in a good condition. It is declining not only in Bangladesh, but also in all countries due to the global crisis, experts say.
Among the indicators of the country’s economy, the topic most discussed now is forex reserves. The discussion has been going on especially since the reserves fell below $40 billion after Asian Clearing Union (ACU) was paid a $1.95 billion import bill on July 12.
After the economic crisis in Sri Lanka and in Pakistan as well, there is a lot of talk at different levels about Bangladesh's forex reserves.
Even, several people are asking, is Bangladesh going to become Sri Lanka?
Dr Monzur Hossain, Senior Research Fellow of Bangladesh Institute of Development Studies (BIDS), told Bangladesh Post, “The people of the country are unduly afraid. Many are spreading panic willingly. I think the current reserves in Bangladesh are good enough and satisfactory. This reserve will cover import expenses for six months. There is nothing to worry about until the reserves fall below $20 billion.”
“I believe that it will never happen in this country. The government has taken various measures to reduce expenditure. Import costs have started decreasing due to various steps taken by the central bank. The prices of many products including fuel oil, food products have started to decrease in the international market. I believe the positive results of all this will be available very soon. The crisis will pass,” he mentioned.
However, the world economy faced several difficulties especially reducing forex reserves in every country caused by the shock of the Russia-Ukraine war.
China's reserves fell by $200 billion in the past seven months from $3,250 billion to about $3,050 billion.
In second place, Japan's reserves fell by $100 billion to stand at around $1,300 billion.
Third-placed Switzerland's reserves fell from $950 billion to about $840 billion.
In addition, the reserves of the neighboring country India has come down to around 572 billion dollars which was the lowest in the last 20 months.
Even in January this year, India's reserves were above $600 billion.
There is no comparison between Bangladesh and Pakistan and Sri Lanka in terms of reserves like other indicators of the economy.
Bangladesh's reserves are more than two and a half times that of Pakistan despite falling to 40 billion dollars. Pakistan's reserves have fallen below $15 billion.
Sri Lanka, which is in an economic and political crisis, has less than $2 billion in reserves.
All this information was obtained by checking the reserves data of the central banks of different countries of the world.
However, the government has taken various initiatives to increase the country’s foreign exchange reserves.
The government has already instructed not to take up new projects without considering urgency as part of curbing government spending to prevent the dollar crisis in the forex market.
Besides, officials of all government and autonomous banks and financial institutions have been banned from travelling abroad.
On the other hand, Bangladesh Bank (BB) has taken steps to discourage imports of luxury goods. The central bank has also relaxed the conditions for availing 2.5 percent cash incentive for inward remittances over Tk 5,00,000 to encourage expatriates to send more money home.
Besides, the BB has directed the banks to provide loans at a 4 percent discounted interest rate under subsidy for the cultivation of pulses, oilseeds, spices and maize as alternative crops for import.
Banks have been instructed to disburse loans at concessional interest rates under the government's interest compensation facility to increase production in import-dependent consumer goods to save foreign exchange and reduce dollar pressure.
Meanwhile, the National Board of Revenue recently slapped regulatory duty on around 135 products as part of the government's broader objectives to discourage imports and contain volatility in the foreign exchange market.
