Bangladesh will show real 19bn$ foreign reserve now after IMF force to do so

[Genghis khan1]

In a healthy well-functioning economy, there is no need to accumulate huge reserves. Reserve is more like a bank balance used for ordinary transactions over a period of few months. Anything larger is usually invested in wealth creating assets. Hence, this preoccupation with reserves is a meaningless yardstick just as wealth is not normally measured by the size of your bank account. Truly wealthy people become so by investing in wealth creating assets (except those who inherit it or win a lottery). Here is a dirty little secret: U.S. has no reserves at all, in fact we are in hole for 30 trillion. But I don't see too many people crying from morning to night over that.

US don’t need reserves because rest of the world accept USD as a mode of payment; which every American has in it’s pocket. There is no requirement for currency exchange for import/export. Plus US Fed reserves print dollars as needed.

 

[Tom-tom]

The world of poc countries and oil producing have the weight of dollar on their backs crushing them. Due to the trade based on the dollar medium, and u.s historically and possibly today almost control the flow of almost every commodity you think. Poc countries have to do things literally sell their country to get hold of the devine and gods currency of the dollar.

This affords the greatest country in the universe many thing, like they print as many dollars as they wish, their budget defeciet or I can't really remember something about u.s being debt to themselves doesn't really matter during Obama and trump election . It was all a con to subject normal ppl and keep most of the wealth in the device ppl.

God bless America, the greatest nation in the universe, the greatest ppl in the universe as well blonde and blue .

In a healthy well-functioning economy, there is no need to accumulate huge reserves. Reserve is more like a bank balance used for ordinary transactions over a period of few months. Anything larger is usually invested in wealth creating assets. Hence, this preoccupation with reserves is a meaningless yardstick just as wealth is not normally measured by the size of your bank account. Truly wealthy people become so by investing in wealth creating assets (except those who inherit it or win a lottery). Here is a dirty little secret: U.S. has no reserves at all, in fact we are in hole for 30 trillion. But I don't see too many people crying from morning to night over that.

 

[bluesky]

The net reserve will have to be calculated according to the new formula prescribed by the IMF. According to the central bank data, Bangladesh will show a $19 billion-plus net reserve if the new formula is applied.

Every other person knows about the govt ill method of calculating the FE reserves. There is nothing new also about the $19 billion figure. As the IMF has the condition of making the FE reserves $24.4 billion in June this year, the GOB is acting on that.

Imports of unnecessary things have been reduced or stopped altogether. So, I personally think the FE reserves in BD will exceed $25 billion in June 2023. With it, the IMF will extend loans to BD. With the IMF action, many other institutions like WB or ADB will also provide loans for new projects.

This real $25 billion figure in June is great if one thinks the country has already done many megaprojects and will keep on paying back the loans with interest. Ours is not the total mismanagement of the economy when one thinks about how many great megaprojects have already been completed and how many more are ongoing.

The undergoing projects include Matarbari Deep Sea Port, Chittagong-Cox's Bazaar-Gumdhum railway line, Darshana-Khulna-Bhanga-Dhaka railway project over the Padma Bridge, the Jamuna Railway Bridge (5.1 km) by JICA, Elevated Expressway in Dhaka are only a few of the ongoing projects.

People do not have to be too pessimistic about FE reserves because our money is being invested in infrastructure construction. BD will have only $25 billion FE in June this year, but it has been spending more than $100 billion worth of money on infrastructure projects which will pay dividends after the constructions are completed.

Think of the Padma Bridge, it is giving us back Tk2.0 crore every day of the year and the amount will only increase year after year.

Note also that what the govt spends on projects is earned by the people. With new money in hand, some of the beneficiaries will spend/ invest in shops, houses, and industries and the economic pie will keep on getting larger.

BD only has a small and temporary FE problem that will go away only with time, especially when FDIs are materialized by Japan, Korea, India, and China. Their companies will provide dollars to buy local currency. So, BD gets dollars in this way.

BD will become a great economic power within the next 25 years. In the next few years, there will be virtually many billions of dollars of investment in industries by Japan, Korea, China, and India.

So, better we do not overlook the economic prospect that lies in the future only because the country has a temporary setback in terms of FE reserves.

 

[SAS]

Reserves are part of a countries money supply that can only be used for external trade.

Huge reserves just sits there doing nothing, increasing the overall money supply.

Developed nations dictate international trade and have imposed condition that their currency needs to be used hence this artificial crisis.

USA/UK simply prints money unfortunately BD or PK can not do that it must earn every $ through trade for their imports.

No one dictates anything to anyone.

Do you think China's forex reserves (Arguably the biggest forex reserve in the world and arch nemesis of the western world apparently) are full of $s, £s and €s because they want to/these terms were dictated to them or simply because they trust these currencies and know that if they tried to sell those currencies to other countries to settle their debt they'll also accept them?

Not anyone's fault if the third world countries' currencies aren't trusted but themselves. Some of the countries have also started to settle transactions in CHY, INR or RUB. Once enough countries accept these and there is a consensus that if countries tried to offload these currencies they'll be bought by other parties, countries will start having these in their reserves too.

In today's integrated world economy I don't think any country can simply continue printing money without consequences, check out the inflation rates of US, UK and Europe.

 

[mb444]

No one dictates anything to anyone.

Do you think China's forex reserves (Arguably the biggest forex reserve in the world and arch nemesis of the western world apparently) are full of $s, £s and €s because they want to/these terms were dictated to them or simply because they trust these currencies and know that if they tried to sell those currencies to other countries to settle their debt they'll also accept them?

Not anyone's fault if the third world countries' currencies aren't trusted but themselves. Some of the countries have also started to settle transactions in CHY, INR or RUB. Once enough countries accept these and there is a consensus that if countries tried to offload these currencies they'll be bought by other parties, countries will start having these in their reserves too.

In today's integrated world economy I don't think any country can simply continue printing money without consequences, check out the inflation rates of US, UK and Europe.

International trade is dominated by the west with china now taking the fight to them.

Until trading blocks appear a la EU elsewhere globally situation will remain the same.

It is not about not trusting each others currency its about volume of trade and the complexity surrounding having too many currencies. Pre EU the european countries traded with each other primarily via franc and the mark. There was little trade via peso or lira or any of the other currencies.

If Taka and INR becomes interchangeable $15b+ trade will no longer need to rely on USD. I hope that is the case and will lay the foundation for a future asian trading block.

50 years down the line i foresee several trading blocks with unified currency within them trading interchangeably. USD dominance will lessen.

 

[bluesky]

Pakistan did not count our 65 tons gold in reserves .

65 tons of gold is valued at about $3.9 billion. Not that much. And if Pakistan sells this gold there will be panic in the market and the Rupee will fall free without an anchor to support its value.

So, do not count on it.

 

[bluesky]

Its very simple .BD was cheating in numbers of data .while pakistan was not .

BD was including investments in FR
BD was including loans given in FR
BD was including sov wealth fund also in FR

So number look bigger as they cheat in gdp . Now IMF told them show only liquid reserves you have .do not play drama .so they have 19bn$ liquid reserves .that is why BD was looking for bailout from IMF .


Its plain simple if someone is not blind .

Please take your opinion to the IMF management and let it decide on it. You have no authority to downgrade the BD Forex. IMF has not directed you to correct the figure and you are talking from the blue.

Most of the developed countries are investing their money in BD. Korea alone has promised to invest $11 billion in BD. How about Pakistan? Even China has given up on your country.

The thing is BD is located in between three economic zones, China, India, and SE Asia. All land trades in this region will be through our country. How about Pakistan? It has no geographical importance after Afghanistan is no more an issue.

No amount of BD bashing will help Pakistan. BD is way higher than Pakistan in economic activities and GDP. The one way Pakistan can survive is to allow Central Asian gas to flow through it to India and BD. make a quick decision.

 

[Destranator]

That is the only thing that pakistan has left. They are already in default. The selloff will occur soon and rapidly and the total repayment for debts PK has to make this year is $22b. Not all loans can be refinanced and creditors would be unwilling with its reduced credit rating.

As you said its less than $4b in value so it is not a solution. I would probably take the impact of default and keep the reserves. PK and its people are used to economic mismanagement and regular defaults.

I agree. Instead of delaying the inevitable, better default now and focus on repairs. Pakistan should hold on to what they have in the coffers for now.

So when you go to begging IMFbailout they told you first stop lying and show your real auqat 19bn$.lolllz

And?? We went to IMF as a precuationary measure despite having $19 billion+ of liquid reserves unlike Pakistan, a country hamstrung by false egoes and extreme delusion.

If we apply the same IMF formula for calculating Pakistani forex reserves, you are billions in the negative and will take years to reach $0. Talk about "auqaat".
Stop blaming PDM for everything, they are reflective of their society.
I am not saying all this to insult the Pakistani nation but to drag some people back to reality.

As for BD, I am happy they are slapping sense into us as well. Economic indicators should always be brutally accurate.

 

[bluesky]

And?? We went to IMF as a precuationary measure despite having $19 billion+ of liquid reserves unlike Pakistan, a country hamstrung by false egoes and extreme delusion.

Pakistani politicians and the govt are not delusional. Delusional is the PDF Pakistani members who like to hoodwink posters from other countries by soothsaying as if the Pakistan economic issue will go away just by wishing.

These guys are especially fond of bashing BD. They live in pre-1971 propaganda that BD is a poor region without anything when in reality west Pakistan stole our Jute export wealth and resources for 22 years.

The East became gradually poor by supplying dollar money to the West that built mills and factories and Islamabad. Even the turfing grass was imported for Islamabad with our dollar money.

Now, the delusional Pakistanis in the PDF do not want to see us with higher GDP and gradually higher living standards. We have beaten the greedy Pakistanis and we will go far above those thick-headed people.

I am not talking about the common people. I have reasons to complain against the PA and political establishment except for PM Imran Khan and his group.

 

[terajane]

I think that 19bn$ is still not enough to develop Bangladesh in all fields.

 

[fallstuff]

That $5 billion won't find it's way back into central bank !

 

[bluesky]

I think that 19bn$ is still not enough to develop Bangladesh in all fields.

Who claimed in this forum that BD will depend forever on this $19 billion Forex? No one. We just said about the current status.

BD earns $60 billion by exporting textile goods and by getting remittances from our expatriate workers. But its import volume is more than that. On top of it, there is the burden of loan repayment.

So, the Forex reserves have come down especially after the Russia-Ukraine war started. But, has BD stopped at that? Any country faces ups and downs in its history, and now BD is facing it.

However, with so many infrastructural works already completed and so many works undergoing, many FDIs are coming in to set up mills and factories. This will boost our Forex reserves. BD has limited the importing of luxury goods; and has almost stopped importing oil to save dollars.

BD needs to boost its Forex reserves by just more than $3 billion by June this year. This will open the IMF windows and it will then provide about $4.5 billion in loans that will also be more than matched by other donor organizations like ADB, WB, and others.

Korea will invest $11 billion in BD in many infrastructural projects. Japan is also the same. When money from many such sources pours in it will relieve the present tight situation and BD will be alright after June this year.

The process of development is always thorny if it is a poor country like BD. However, we are not like Pakistan or SL who had only counted chickens before they were hatched.

We are not counting that way. Read information laid in the newspapers to know about the reality.

 

[Destranator]

I think that 19bn$ is still not enough to develop Bangladesh in all fields.

You are absolutely correct. $19 billion is peanuts for a country of 170-200 million.

Who claimed in this forum that BD will depend forever on this $19 billion Forex? No one. We just said about the current status.

BD earns $60 billion by exporting textile goods and by getting remittances from our expatriate workers. But its import volume is more than that. On top of it, there is the burden of loan repayment.

So, the Forex reserves have come down especially after the Russia-Ukraine war started. But, has BD stopped at that? Any country faces ups and downs in its history, and now BD is facing it.

However, with so many infrastructural works already completed and so many works undergoing, many FDIs are coming in to set up mills and factories. This will boost our Forex reserves. BD has limited the importing of luxury goods; and has almost stopped importing oil to save dollars.

BD needs to boost its Forex reserves by just more than $3 billion by June this year. This will open the IMF windows and it will then provide about $4.5 billion in loans that will also be more than matched by other donor organizations like ADB, WB, and others.

Korea will invest $11 billion in BD in many infrastructural projects. Japan is also the same. When money from many such sources pours in it will relieve the present tight situation and BD will be alright after June this year.

The process of development is always thorny if it is a poor country like BD. However, we are not like Pakistan or SL who had only counted chickens before they were hatched.

We are not counting that way. Read information laid in the newspapers to know about the reality.

I am optimistic. In the long term, a lot of our imports will have more local substitutes due to increasing economies of scale while exports will continue to grow in the medium term thanks to Western buyers looking for alternative manufacturing sources.

I expect Bangladesh to have positive trade balance within 10 years.

There is increased seriousness now in bringing reforms and attracting local and foreign investments.

BAL needs to stop fudging numbers for instant glory. Our economy is growing anyway, we are better off reporting stats accurately as it feeds into long term planning.

 

[bluesky]

I expect Bangladesh to have positive trade balance within 10 years.

Every country except Japan went or go through this phase of shortage of dollars when doing Infrastructure development works. These works need big dollar money and a developing country has little money.

Weak infrastructure means weak FDI investment.

When infrastructure is built with foreign loans, a time comes when the repayment starts. So, the country faces a brutal economic pinch. It has little alternative source of earning extra dollars, yet it has to repay the loans and import goods for which the market has already been created with new money in many hands.

BD is exactly in that situation. But the main hope remains with the IMF. Come June, it will extend a $4.5 billion loan to BD. This money is not good enough to propel the economy. But IMF money is like seed money.

IMF imposes many conditions that close many loopholes in a country's economic system. A govt is unable to do away with these loopholes without pressure from outside such as IMF. Since the IMF has already accepted BD's application for loans, there is no doubt other sources will follow this example and extend further loans to BD.

I assume no big trouble in the near future.