Reserve close to danger level!
Mahfuz Emran: There is a lot of discussion and criticism about the reserve in recent times. The issue has also reached the political arena. Some say that reserves have decreased due to money laundering. Some say that this reserve crisis is the result of irregularities in the economic sector. Until now, common people were not interested in this important economic issue of the country. However, due to the extensive discussion about the reserve, the interest to know about it has increased in the public mind. Now the question of many people is, how much does the reserve signal danger for the country?
According to the data of Bangladesh Bank, foreign exchange reserves in the country stood at $30.32 billion last week. However, according to the central bank, the reserve is $3032 crore ($30.32 billion), but according to the International Monetary Fund (IMF), its $5 billion is not usable as a reserve. As such, usable reserves will be $25 billion.
Earlier, in the first week of this month, the reserve was under great pressure to pay the bills of the Asian Clearing Union (ACU).
Reserves fell to $29.77 billion, the lowest in seven years, after ACU paid off its debt of $1.18 billion.
But now the question of many people is, how much reserve is required for a country or how much reserve can’t be called dangerous. Talked about this with a senior official of the concerned department of Bangladesh Bank. The official, who did not want to be named, told that if a country has a reserve to meet its import expenses for three months, it does not signal any danger. But our reserves were low, now they are increasing. At the same time import liability is also decreasing. At present we can meet six months of import liabilities with the reserves we have.
According to the data, we need about five billion dollars every month to meet our import liabilities. As such, it is possible to meet the import liability of more than five months with our reserves. As a result, the current reserve of the country cannot be called a bad condition, Bangladesh Bank officials say.
Remittances are encouraging in this state of reserves. In the first 12 days of this May, remittances of $77 crore 39 lakh 70 thousand have arrived in the country. In Bangladeshi currency (108 taka per dollar) which amounts to Tk 8 thousand 359 crore. Currently, an average of about $64.5 million is coming daily. If this trend continues, the remittance will reach the milestone of two billion by the end of the month.
Central bank sources say that we have a good flow of remittances now (current month). Eid al-Adha is coming, in this case the remittance will increase. And they hope that the country’s reserves will increase based on remittances.
In the first two months (July and August) of the current fiscal year 2022-23, remittances reached two billion dollars in a row. But the remittance flow stopped at one and a half billion dollars for six consecutive months from September. In the first month of the current financial year (July) came $209.63 million, in August came $203.69 million, in September came $153.96 million. Then $152.55 million in October, $159.47 million in November, $169.96 million in December.
In addition, in the first month of this year, $195.88 million came in January, $156.12 million came in February. Then in March, the month of independence, remittances of more than $201.76 million came. In the last month of April, remittances came to $168.34 million.
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