$1.09b import bills to bring down forex reserve again

The Bangladesh Bank will clear import bills to the tune of $1.09 billion through the Asian Clearing Union (ACU) this week, which will bring down the country's foreign exchange reserve level. 

A BB official told The Daily Star that the central bank would settle the import bills within a day or two.

The ACU is an arrangement for settling payments for intra-regional transactions among member countries.

India, Bangladesh, Bhutan, Iran, the Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka are members of the Tehran-based organisation. Members clear payments every two months.

The forex reserve usually falls after ACU payments are made. The BB cleared import bills amounting to $1.18 billion in May.

The reserves stood at $31.19 billion on June 30 in contrast to $41.82 billion on the same day a year ago, BB data showed. And the reserves could drop below $31 billion after import bills are cleared this week.

It rose past $31 billion on June 26 after three multilateral lenders extended $925 million in loans to Bangladesh. In addition, a higher inflow of remittances on the occasion of Eid-ul-Azha also played an important role in pushing up the reserve level last month.

Migrant workers sent home $21.61 billion in the just-concluded fiscal year, up 2.75 per cent from the $21.03 billion remitted a year ago.

The expatriate Bangladeshis remitted about $2.2 billion in June, the highest in a single month since July 2021 when $2.6 billion entered the country.

Bangladesh's foreign exchange reserves soared to a historic high of $48 billion in August 2021. But higher import payments driven by a surge in commodity prices globally dealt a blow in recent months.

The import payments, however, have decreased recently after the central bank took a set of measures to discourage non-essential and luxurious imports.

Between July and May of 2022-23, import payments stood at $64.76 billion, down 14.11 per cent year-on-year.