Home Bangladesh BB emphasises debt strategy for boosting reserves
Bangladesh - 3 weeks ago

BB emphasises debt strategy for boosting reserves

Zarif Mahmud: Bangladesh Bank is trying to pull up the reserves that have been at the bottom for a long time by borrowing. As a part of this, the International Monetary Fund (IMF), the World Bank, the Islamic Development Bank (IDB), the International Bank for Reconstruction and Development (IDRB) and various foreign sources, including South Korea, have added about $ 2.5 billion of loan money to the reserve. In this, the country’s gross reserves have increased to $27.15 billion. However, in the first week of this month, after the payment of the Acu bill of $1.5 billion, it is said that there is a fear that the reserve will decrease again.
Spokesperson and Executive Director of Bangladesh Bank Majbaul Haque said that as the third tranche of the IMF loan came in, dollars were added from several other sources. According to Bangladesh Bank, the amount of gross reserve is $26.50 billion. However, at the end of Thursday, total remittances increased to $27.15 billion.

Majbaul Haque said that Bangladesh received $900 million of loans from IDB, IBRD and South Korea in addition to IMF last Thursday. In addition to the gross reserves, the amount of reserves in the BPM-6 method accepted by the IMF is now $22 billion.
According to the data of Bangladesh Bank, on June 26, the foreign currency reserve status was $24.62 billion as gross of Bangladesh Bank. It was $19.47 billion as a gross of the IMF-approved BPM-6 system. And Bangladesh Bank does not disclose the net account of reserves.
Meanwhile, after the approval of the loan agreement, Bangladesh received $47.62 million of the first installment at the beginning of February last year. And on December 12, Bangladesh received $68.10 million in the second installment. To receive the third tranche, the IMF stipulated net reserves of $14.76 billion at the end of June, up from $20.10 billion in the previous terms. Due to the progress in other conditions, the international creditor organization gave this concession to preserve the net reserve in view of Bangladesh’s application. However, according to the new conditions, net reserves should be $14.88 billion at the end of September.
A senior official of Bangladesh Bank involved in reserve management said that the reserve information has been provided to the IMF till June 23. They were one and a half billion short of their target. Only $40 million was sold in June. Although the IMF has objected to the purchase of dollars from banks through currency swaps, direct purchases of dollars from the market continue. In total, the reserve crossed $14 billion. About $1.15 billion in third tranche of the IMF loan is added to the reserves when sanctioned and waived. It has slightly increased the reserve.
In this regard, former chairman of Association of Bankers Bangladesh (ABB) Nurul Amin said, “Something will definitely be added to the reserve.” This is a positive aspect. But that’s not much. What we always try to say is that unless export growth is good and remittances grow more, efforts to increase reserves by curbing imports will not succeed.

Check Also

President Joe Biden tests positive for COVID-19 while campaigning in Las Vegas, has ‘mild symptoms’

International Desk: President Joe Biden tested positive for COVID-19 while traveling Wedne…