Irshad Salim — Bangladesh’s foreign exchange reserves have crossed $33 billion for the first time in the history of the country.
The South Asian nation’s foreign reserves grew 10.5 percent to $33.02 billion on Thursday from a year ago, Subhankar Saha, a spokesman for Bangladesh Bank, told local media outlets, citing data.
The amount is good enough to clear import bills for the next nine months, going by an estimated monthly requirement of $3.5 billion.
In 2001, Bangladesh had to defer its payments to the Asian Clearing Union for imports to avoid compromising the then $1 billion foreign exchange reserves, as that would have undermined the country’s global image.
And now, 17 years later, Bangladesh Bank’s foreign exchange reserves have grown by 33 times in all these years.
Steady growth in forex reserves has been marked in recent years due to tight fiscal policies, steady remittances inflow and textile garments export mainly to the US.
The reserves crossed $31 billion on Sept 1 last year. On Nov 4, it crossed $32 billion but dropped twice after clearing ACU bills. Then again it rose to $32 billion.
Economist Zaid Bakht has termed the $33 billion-mark a ‘milestone in Bangladesh’s history’.
Increasing remittances from expatriates abroad and rising export incomes have boosted Bangladesh’s reserves in the past few years, said Bakht, research director at Bangladesh Institute of Development Studies (BIDS).
However, remittance inflow has dropped in recent times, but export earnings continued a slightly upward trend.
Inward remittances dropped by 14.19 percent in the first 11 months of outgoing fiscal 2016-17. Exports grew 3.67 percent in the same period, particularly readymade garments, comprising knitwear and woven items — with the US being Bangladesh’s single largest export destination.
Exports in the financial year that ended in June 2016 were a record $34.24 billion, up 9.7 percent from the previous year, on the back of stronger garment sales.
For the full year ending on June 30, 2017, the export target is $37 billion.
The Bangladeshi taka has appreciated nearly 8 percent in recent years against the US dollar, while the currencies of Turkey, India, China, Pakistan and Vietnam depreciated significantly against the greenback.