Foreign exchange reserves again dropped by $20 billion

Economy Desk: In two weeks, the foreign exchange reserves again dropped by 20 billion dollars. According to the International Monetary Fund (IMF) accounting method (BPM6), the amount of reserves currently stands at 2,196,190,000 dollars or 20.19 billion dollars. This information is known from the weekly selected economic indicators of Bangladesh Bank on Thursday (February 22). On the other hand, the amount of gross reserves stood at two thousand 532 million 71 million 40 thousand dollars. According to the data of Bangladesh Bank, the amount of reserves at the end of January was more than 21 billion dollars. At the beginning of February, it fell to 19.94 billion dollars (BPM6). In the previous week too, the amount of reserves was 1 thousand 993 crore 51 lakh 20 thousand dollars. In the third week of the month, 16 crore 10 lakh 50 thousand were added and again it left 20 billion dollars. Foreign exchange reserves are mainly used to meet import expenditure as well as foreign exchange transactions.

This reserve has become a symbol of the financial sector's capacity. Source of foreign debt, expatriate income, foreign debt or aid reserves. Again, there are thousands of sectors in terms of expenditure including meeting import expenses, paying foreign debt-interest, treatment abroad, education. Imports fell amid the Corona pandemic. However, expatriates bring their savings with them when they return home. Many send money from abroad to their relatives at home. It increases the reserve. In August 2021, reserves crossed a maximum of 48 billion. According to several sources of banks associated with foreign exchange transactions, one of the reasons for the increase in reserves at that time was the closure of hundi. At that time, most of the countries stopped the air communication with other countries to prevent the spread of corona epidemic.

As the dollar continues to rise. Again, due to decrease in imports, the consumption sector also becomes smaller. When the economy started to recover in countries after the corona, the opposite happened. Import costs continue to rise. Inflation increases. The Russia-Ukraine war makes the situation even more fragile. In order to manage the situation, reserves have to be sold to meet import costs.