Bangladesh's forex reserves fall to $32.7b after ACU payment

[Arthur]

Bangladesh's forex reserves fall to $32.7b after ACU payment​

Payment of import bills worth $1.12b to be adjusted tomorrow​

Staff Correspondent | Published: 22:55, Jan 03,2023 | Updated: 05:02, Jan 04,2023

A file photo shows the Bangladesh Bank headquarters in the capital Dhaka. Foreign exchange reserves in Bangladesh will fall to $32.7 billion once the payment of import bills worth $1.12 billion is adjusted tomorrow. — New Age photo

Foreign exchange reserves in Bangladesh will fall to $32.7 billion once the payment of import bills worth $1.12 billion is adjusted tomorrow.
Bangladesh has made the payment to the Asian Clearing Union for the months of November and December.
Bangladesh Bank officials said that the payment was made on Tuesday and it would be adjusted on Thursday.
Foreign exchange reserves dropped to $33.83 billion on December 28, 2022 from record $48.6 billion in August 2021.
The Asian Clearing Union is a payment settlement forum whereby the participants settle payments for intra-regional transactions through the participating central banks on a net multilateral basis.

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Payment obligations of transactions among Bangladesh, Bhutan, India, Iran, the Maldives, Myanmar, Nepal, Pakistan and Sri Lanka are settled through the ACU payment system.
Central banks of the countries make the payment obligations at a two-month interval.
Apart from the payment obligations to ACU, continued sales of the foreign currency reduced the foreign reserves of the country.
The BB had injected more than 6 billion in the financial system from July 1 to November 30 in 2022 in order to stabilise the foreign currency market and facilitate banks in making import payments obligations.
The central bank sold $7.62 billion directly to the banks in FY22 amid a shortage of the greenback on the market.
The central bank on September 14 approved the floating rate of the dollar.
The interbank exchange rate of the US dollar is ranging between Tk 103 and Tk 105.
Due to various restrictions and sluggish business environment amid the Covid pandemic, import payments had declined sharply while exports and remittance earnings witnessed growth in 2021.
But imports have recently exceeded remittance and export earnings, depleting foreign reserves of the country that has also brought down the import payment capacity.
The country’s reserves dropped by $15.9 billion from $48.6 billion a year ago, weakening Bangladesh’s import payment capacity.
Of the amount, the central bank formed a $7-billion export development fund for exporters, but the amount is still considered as reserves and for which the International Monetary Fund has already raised its objection.
If the EDF is excluded from calculation, the country’s reserves would fall to $25 billion.
The government and the central bank have already taken a number of steps to protect the reserves by way of containing the skyrocketing imports.
The government has slapped high taxes on some non-essential items along with imposition of high margin on the opening of letters of credit for import of luxurious and non-essential items.
The country’s trade deficit hit record $33.24 billion in FY22 against $23.78 billion in FY21.
The trade deficit was $11.79 billion in the July-November period of FY23.
In the first five months of FY23, the country’s import payments reached to $32.53 billion from $31.16 billion in the same period of the previous year.

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Bangladesh's forex reserves fall to $32.7b after ACU payment

Foreign exchange reserves in Bangladesh will fall to $32.7 billion once the payment of import bills worth $1.12 billion is adjusted tomorrow. Bangladesh has made the payment to the Asian Clearing Union for the months...

www.newagebd.net

The $48 billion reserve was bloated anyway. Happened as Covid 19 meant :

1. A drastic fall in imports
2. Lendors like WB, China, Japan released funds added to reserve
3. Unprecedented level of inbound remittance
4. Zero hundi

BD's normal forex reserve should be around $30 to $35 billion

Dollar crunch happened due to:-

1. Pending payments of matured private sector loans
2. Pending Line of Credit
3. Increased fuel price
4. Money laundering
5. Low inbound remittance

Anyway BD's neat/usable forex reserve is around $26 billion According to IMF formula. Not that great, not that bad either. They should look to increase earnings from remittance and export.

Also while at it abolish that export promotion fund or EDF. Pure garbage idea.

 

[EasyNow]

I will pay for the plane ticket if he includes @bluesky as well

Good thing they're such big fans of the language there!

The question is: will they get to watch HUM TV and ARY ?

The $48 billion reserve was bloated anyway. Happened as Covid 19 meant :

1. A drastic fall in imports
2. Lendors like WB, China, Japan released funds added to reserve
3. Unprecedented level of inbound remittance
4. Zero hundi

BD's normal forex reserve should be around $30 to $35 billion

Dollar crunch happened due to:-

1. Pending payments of matured private sector loans
2. Pending Line of Credit
3. Increased fuel price
4. Money laundering
5. Low inbound remittance

Anyway BD's neat/usable forex reserve is around $26 billion According to IMF formula. Not that great, not that bad either. They should look to increase earnings from remittance and export.

Also while at it thorw that EDF or export promotion fund to trash. Pure garbage idea.

People conveniently forget that the reserve was $32b only in 2019. The last 2 years were unusual, record highs.

Now they use those record highs as a stick to beat BD.

 

[BananaRepublicUK]

Good thing they're such big fans of the language there!

The question is: will they get to watch HUM TV and ARY ?



People conveniently forget that the reserve was $32b only in 2019. The last 2 years were unusual, record highs.

Now they use those record highs as a stick to beat BD.

Remember, they didn’t believe the 30 billion number.

But now they use it as benchmark!

That’s how unhinged they are!

And they want a hand on the levers of power???

Amputate their hands! Saudi style! Now!!!

@jamahir

 

[Skull and Bones]

I will pay for the plane ticket if he includes @bluesky as well

@Bilal9 is missing his ideological motherland?

 

[BananaRepublicUK]

@Bilal9 is missing his ideological motherland?

He doesn’t come across as ideological.

Far too flaky.

One minute Bangladesh can launch rockets to the moon, next minute BD can only make undies.

He is butt hurt rather than ideological. Very similar to Trump suppprters.

Yep! Let’s help him to his butt soothing country of burnol.

 

[Tom-tom]

HWould you be able to arrange a visa for @Bilal9 ?

He'll have a field day and start a back yard work shop. I don't think he has much hands on experience, so he'll experiment with the stone wheel and chariot.

 

[BananaRepublicUK]

He'll have a field day and start a back yard work shop. I don't think he has much hands on experience, so he'll experiment with the stone wheel and chariot.

He is really a roadside blacksmith at heart.

 

[bluesky]

Banana bhai, I go out in an autorickshaw usually and when they stop at traffic signals there sometimes are beggars whether with limbs missing or old people or transgenders ( hijdas ). I always make it a point to give them 20 rupees. It is not much but I am not wealthy myself at the moment. The hijdas are polite with me and once when I told one of them that I don't have lesser notes and showed him / her a 200 rupee note and a 50 rupee note that person insisted that he / she will give change so I believed and gave her / him the 50 rupee note and she / he took 20 rupees and returned the rest to me in full honesty. They either thank me or bless me.

Beggars don't exist because God wrote that on their forehead in the womb. They suffer that life because of the wrong socio-economic and social system that exists in the society they live in. How is it possible that our Pragati Purush prime minister Modi jee living in his luxurious Delhi official residence had a suit made for him costing 10 lakhs with his full three-word name written down the top and the pant in stripes and all his expenses and food borne by the bureaucracy which gets its monies not from a boon by Lakshmi mata but from taxing the citizens and the goods and services developed by citizens and he not doing any part in it, but in the same Delhi are many citizens having to resort to begging to survive day to day and wearing tattered or uncleaned clothes ? Why this difference of treatment among the citizens of the same country ?

Another very very long crap essay as usual by an Indian Hindu without discipline. Do you think people have time to read through all your garbage? You have time because you have no job. But, do you think all posters are like you?

Make your long stories short for people to read and understand.

 

[nahtanbob]

How certain neighbouring countries would love to have 32 billion dollars

@EasyNow
@jamahir
@UKBengali

Any rewards for guessing the country ??

 

[bluesky]

I will pay for the plane ticket if he includes @bluesky as well

Do not worry about me. If it is an invitation to see your London, note that I had been there one or two times as a transit passenger from Tokyo to Lagos in Nigeria.

The Japanese company President was not impressed by your London. I was not impressed by the dim light in the Hotel lobby that showed England has become a poor country.

I guess, all these are happening to that great country because many like you from Sylhet live there to make that country miserable.

Once England was the most powerful nation and my company President noted that there were few new construction works in London.

The demise of England may have been ushered in due to the influx of uncultured and uneducated Sylhetis in England.

 

[EasyNow]

Do not worry about me. If it is an invitation to see your London, note that I had been there one or two times as a transit passenger from Tokyo to Lagos in Nigeria.

The Japanese company President was not impressed by your London. I was not impressed by the dim light in the Hotel lobby that showed England has become a poor country.

I guess, all these are happening to that great country because many like you from Sylhet live there to make that country miserable.

Once England was the most powerful nation and my company President noted that there were few new construction works in London.

The demise of England may have been ushered in due to the influx of uncultured and uneducated Sylhetis in England.

Maybe your company put you in a crap hotel?

Ps. Why didn't you settle in Nigeria? Did they not want you?

 

[mb444]

I dont see the big deal. Inward remittances are coming in via legal and even more via hundi by our expats. Exports are up year on year. Although trade deficit is up most of our imports feeds into our export sector.

Only thing that is depleting reserves are fuel, edible oil and some rice purchases. This BD is well placed to absorb is only short term in nature.

Let me make also one point....not a single cent of funds from the likes of IMF has been utilised and there is every possibility that the current account support for which these facility has been agreed wont be needed.

BD economy has not stalled, investments are up, bumper crops only a month away and BD economic engine is operating at full throttle.

 

[mb444]

Good thing they're such big fans of the language there!

The question is: will they get to watch HUM TV and ARY ?



People conveniently forget that the reserve was $32b only in 2019. The last 2 years were unusual, record highs.

Now they use those record highs as a stick to beat BD.

Absolutely, reserves are not the be all and end all of all things.

BD continues to get just under $2b a month in remittence and above $2b in exports. Add to that around $2b in hundi but obviously that is passed on the people as taka which is eternally increasing the velocity of money and growing the economy.

 

[EasyNow]

Absolutely, reserves are not the be all and end all of all things.

BD continues to get just under $2b a month in remittence and above $2b in exports. Add to that around $2b in hundi but obviously that is passed on the people as taka which is eternally increasing the velocity of money and growing the economy.

Yes, tbh with inflation in US and Europe, we are actually likely to see the gross dollar figure of remittances and exports increase.

As raw material prices increase, the price of BD exports have to increase and be passed on to customers. So even if we make the same margins, the dollar figure will be higher.

Of course, whether it will benefit us in real terms is debatable.

 

[mb444]

Yes, tbh with inflation in US and Europe, we are actually likely to see the gross dollar figure of remittances and exports increase.

As raw material prices increase, the price of BD exports have to increase and be passed on to customers. So even if we make the same margins, the dollar figure will be higher.

Of course, whether it will benefit us in real terms is debatable.

In real terms i do not see any increase as you say in the short term. We are importing global inflation through our imports counterbalanced by increased exports. From my conversation in BD per unit margins have fallen due to buyers really squeezing our exporters.

However our export basket has low price elasticity so our exporters can manage with a view to a brighter future.

Generally people are cautiously optimistic. We have enough fuel in the tank to see through this global downturn and still maintain a growth trajectory.

Newspapers need to sell hence the doom and gloom. It has taken decades for BD to grow its economic base, it will not take a few months for it to fall apart. But it does make for interesting conversations.