Economy backing on right track

Mahfuja Mukul : The economy of the country is once again blowing fresh air. Expatriate income, exports have been increasing for several consecutive months. Import costs have decreased. And it has reduced the trade deficit overall. Not only that, there is also a current account surplus. Economists see this trend as positive. Due to the strictness of the Bangladesh Bank, the country’s overall import including capital equipment has decreased. According to the data of the central bank last December, the current account surplus was $192 million. Expatriate income also plays a big role in this regard. Expatriate income has been around $200 million for five months.
Apart from this, foreign exchange reserves have also been spared from continuous decline. Bangladesh’s foreign exchange reserves have now dropped below $20 billion after settling an import bill of $1.29 billion with the Asian Clearing Union (ACU).
According to the data of the Central Bank, after March 7, the foreign currency reserves decreased to 19.99 billion dollars, which was $21.15 billion the previous day on March 6.
$100 million have been added to the reserves of Bangladesh Bank in 15 days after the introduction of taka-dollar exchange or swap facility. Bank sector stakeholders say that the banks are benefiting from the swap facility. Because, in the case of depositing dollars and withdrawing money, the cost of funds of the banks is a maximum of two and a half percent.
Banks can invest that money in government treasury bills at up to 11.5 percent interest. Besides, they can give loans at 13.11 percent interest on this money. As a result, commercial banks are getting more income from low-cost funds.
Bank officials said Bangladesh Bank started currency swap with commercial banks from February 20, which is helping to increase reserves.
According to the central bank, more than $2 billion of remittances came in February. Ongoing currency swaps with banks have contributed to a steady increase in gross reserves. Earlier, on March 4, the reserve was $20.85 billion.
The central bank is selling dollars from the reserve as before to meet the government’s import liabilities. However, the instability that was going on in the dollar market, has now reduced somewhat. As a result, the price of the dollar is now decreasing instead of increasing. Banks earlier bought expatriate income dollars at a price above Tk 120, now this price has come down to Tk 118-119. As a result, importers are also getting dollars at a lower price than before.
In this context, the executive director of private research institute Policy Research Institute (PRI) Ahsan H. Mansoor said that total reserves are increasing as a result of swaps, which is a good thing. Both central banks and commercial banks are benefiting from this.
He also said that the dollar crisis has eased somewhat by increasing the loan interest rate. According to him, if the interest rate increases a little more, the crisis will decrease.
Meanwhile, in the just-ended month of February, the revenue from merchandise exports was about $519 million-which is 12 percent higher than the same month last year. In other words, compared to February of last year, exports increased by $56 million in February. More than Tk 6 thousand crore. However, last January, the highest export income of $572.47 million came in the history of the country.
And in February, remittances of $217 million came into the country, which is the highest in any February in the past.
According to the Export Development Bureau (EPB), exports in February increased by 12.04 percent over the same month last year. No other month of the current financial year has recorded such a high rate of growth. Even when the country reported record export earnings last month, growth was still 11.45 percent
According to the July-December period of the current financial year 2023-24, the total import in the first six months of the financial year has decreased by 19.80 percent to $305 million compared to the same period of the previous financial year. At the same time, exports increased by 0.64 percent to $259 million. This reduced the trade deficit to 4.59 billion dollars. The trade deficit was $1,231 million during the same period last fiscal year.
Meanwhile, after a meeting with economists last Sunday night, Finance Minister Abul Hassan Mahmud Ali said that although there are many problems in the economy, economists think that the country’s economy is on the right track. Advising them to beware of these, they urged to take initiative to overcome the crisis now.
He said, everyone has appreciated that we are on the right track. Managing the economy well. There are many problems in the economy. Beware of this problem. So, take initiative now.