Reserves now record US$ 16 bln

[BDforever]

Then provide your argument how these artificially propping up measures should not be discounted.

ok here goes...

1. BB bought foreign currency from open market to stop devaluation of USD against Taka (because it will harm our export)
2. FCL increased not only in BD but also all other major developing nation.
3. Yes import of raw materials which bd does not have is not good thing.

last one is due to political problem and rest of two are pure financial To discuss about how FCL works, i need to open a thread LOL

@BDforever Perhaps you can start by teaching people that ALL countries purchase currency to prop up their Forex reserves, its not an "artificial measure".

LOL

 

[Mattrixx]

@BDforever Perhaps you can start by teaching people that ALL countries purchase currency to prop us their Forex reserves, its not an "artificial measure".

Yes Bangladesh central bank is trying hard to hold the exchange rate of dollar and taka.
Sudden increase of foreign reserves are hard to hold the price of dollar. So they are
buying dollars to maintain stability. Again some people never understand

 

[idune]

@BDforever Perhaps you can start by teaching people that ALL countries purchase currency to prop up their Forex reserves, its not an "artificial measure".

May be you need to get some lesson from RBI that NOT fourth of Indian reserve (like in Bangladesh right now) comes from purchasing dollars from open market. Rather comes from export, remittace and other income. And perhaps you need to explain when fourth of reserve is bought by a central bank by issuing an " I owe you" note to banks, what happens to banks available funds and downsteram impacts on credit availability and Letter of credit openning capability. Specially in Bangladesh where bank funds are not endless to play with.

 

[Dillinger]

@BDforever Or you can try the harder way and teach them that manipulating reserve levels is required by a country's central bank to intervene in a mitigating manner in case of volatile fluctuations in currency by affecting the exchange rate and increasing the demand for and value of the country's currency. That these reserves act as a shock absorber against factors that can negatively affect a country's exchange rates and thus the central bank uses reserves to help maintain a steady rate.

@idune Read the above. You can't bring in the specifics that prevail in India, what sense does that make. I might as well start cribbing about the contributory factors that have led to large reserves in countries like Japan, PRC and ROK.

 

[Bobby]

Bangladesh’s forex reserves have reached a record US$ 16 billion, spurred by a double-digit growth in exports and low food imports, according to the central bank governor.

“You can attribute this remarkable feat to a combination of factors,” Governor Atiur Rahman told bdnews24.com.

“A slump in food imports thanks to high agricultural output, improvement in payment system and a double-digit export growth have all contributed,” he said in exclusive remarks to bdnews24.com.“This is enough to foot the import bill for five and a half months,” Atiur Rahman, whose four-and-a-half years in charge has seen the reserves treble.

The reserves reached US$ 16.03 billion to be precise, only second to India in South Asia.

The figure is six billion US dollars more than Pakistan’s, Atiur Rahman pointed out.

“The non-resident Bangladeshis are increasingly relying more on regular banking system to remit money,” he said.

The informal process – known as hundi – is no longer the preferred choice, leading to a bigger inflow into the central bank coffers, the governor said.

“We have done quite a bit to improve our payment systems,” Atiur Rahman said.

source: Reserves now record US$ 16 bln - bdnews24.com

That means BD is much richer than Pakistan....

 

[BDforever]

May be you need to get some lesson from RBI that NOT fourth of Indian reserve (like in Bangladesh right now) comes from purchasing dollars from open market. Rather comes from export, remittace and other income. And perhaps you need to explain when fourth of reserve is bought by a central bank by issuing an " I owe you" note to banks, what happens to banks available funds and downsteram impacts on credit availability and Letter of credit openning capability. Specially in Bangladesh where bank funds are not endless to play with.

bro those banks have huge USD in reserve which they can not use right now, so it is more like surplus money which bought by BB from those banks, remember this is short term measures, those banks can buy back those money when it will be needed.

That means BD is much richer than Pakistan....

no.. richness depends on GDP

@BDforever Or you can try the harder way and teach them that manipulating reserve levels is required by a country's central bank to intervene in a mitigating manner in case of volatile fluctuations in currency by affecting the exchange rate and increasing the demand for and value of the country's currency. That these reserves act as a shock absorber against factors that can negatively affect a country's exchange rates and thus the central bank uses reserves to help maintain a steady rate.

hold your horse buddy LOL @Dillinger i am missing @arp2041 right now

 

[farhan_9909]

Ummm. India already has Forex reserves amounting to 270 billion dollars.

But yes we need more, we need it to be in the trillions.

ooops i meant Bangladesh

 

[Jungibaaz]

That means BD is much richer than Pakistan....

Forex is to do with exports and balance of trade mostly.
GDP and GDP per capita are better indicators, but even in that field, BD is currently growing much faster than Pakistan.

 

[BDforever]

Forex is to do with exports and balance of trade mostly.
GDP and GDP per capita are better indicators, but even in that field, BS is currently growing much faster than Pakistan.

BS what ?

 

[idune]

1. BB bought foreign currency from open market to stop devaluation of USD against Taka (because it will harm our export)

When fourth of reserve is bought by a central bank by issuing an " I owe you" note to banks, banks available funds and downsteram impacts on credit availability and Letter of credit openning capability are obvious. Harming exporters who are heavily dependent on import raw materials and machinary and making their export expensive.

Besides, none of these ratioales for buying 1/4 of reserve discount this as an artificial reserve.

2. FCL increased not only in BD but also all other major developing nation.

New for Bangladesh and also the reason why reserve showing billion or so more beacuse of these loan fund. Not to mention while contarctionary policy made loan from local bank expensive (high interest rate) repayment of foreign bank loan will make strain on reserve down the road (soon). This policy by Bangladesh Bank and Awami League regime has turning local bank sick. Even Awami League bank owners and party man who got permission recently complaining about regime policy.

More than one billion came as loan which soon will be used for import not as any type of reserve to stick around, that is why it is an artifical amount.

 

[karan.1970]

Pakistan's Forex reserves have gone down to 5billion - are they still third?

$ 5 billion?? When did that happen.. I thought it was closer to 11 billion..

 

[BDforever]

When fourth of reserve is bought by a central bank by issuing an " I owe you" note to banks, banks available funds and downsteram impacts on credit availability and Letter of credit openning capability are obvious. Harming exporters who are heavily dependent on import raw materials and machinary and making their export expensive.

Besides, none of these ratioales for buying 1/4 of reserve discount this as an artificial reserve.



New for Bangladesh and also the reason why reserve showing billion or so more beacuse of these loan fund. Not to mention while contarctionary policy made loan from local bank expensive (high interest rate) repayment of foreign bank loan will make strain on reserve down the road (soon). This policy by Bangladesh Bank and Awami League regime has turning local bank sick. Even Awami League bank owners and party man who got permission recently complaining about regime policy.

More than one billion came as loan which soon will be used for import not as any type of reserve to stick around, that is why it is an artifical amount.

1. I mentioned earlier, it is surplus amount of those banks
2. as you said your self that FCL will be used for imports, so it is good thing. FCL always comes with HIR for banks with certain mechanism.
hope AL banks will get ban during BNP government.
and lastly the FR will be down after few months when demand will increase, it is natural.

$ 5 billion?? When did that happen.. I thought it was closer to 11 billion..

FR is not something permanent, it always ups and downs

 

[karan.1970]

FR is not something permanent, it always ups and downs

Not by this magnitude buddy...

 

[BDforever]

Not by this magnitude buddy...

agree, it is more than half down.

 

[karan.1970]

agree, it is more than half down.

Brecoder.com pegs them at a little over $10 billion...

News | Business News | Current News | Latest World News | Current World News | Pakistan News

But I think almost 4 billion is with merchant banks so the leaves the Pak govt reserves close to 5-6 billion only..