Foreign exchange reserves hit a new record
It is heartening to know that the foreign exchange reserves of the country have touched $45 billion from $40 billion in the last six months. According to Bangladesh Bank sources, foreign exchange reserves on 8 November hit $40 and it stood at $45.105 billion on last Monday. However, as per international standards, a country must possess reserves equal to three months of import expenditure.
With the current amount Bangladesh now has, it is possible to pay all import costs for more than eight months. The more-than- adequate reserves are a matter of relief for the national economy. It contributes to ensure the stability of the foreign exchange market. Moreover, the current foreign exchange reserve is a strong indicator of country's viable monitory policy.
However, it is widely believed that the flow of remittances sent by expatriates is one of the main reasons for increased reserves. Remittance inflow in April this year was $2.06 billion, which is 89 per cent higher than the previous year. In just two days, on 1-2 May, a staggering amount of $154 million remittance inflow was recorded. We congratulate our expatriate workers for contributing in our foreign exchange reserve by remitting.
Additionally, reduction in import expenditure, drop in travel and medical expenses abroad have also helped to increase the amount of reserves. In addition, export earnings have increased slightly and the overall balance of payments on foreign trade have also increased. During July-February of the current financial year, imports of intermediate raw materials used in industrial production has gone up by 5 per cent, while overall import has been decreased comparing to last year. The expenditure on imports was $2.12 billion, which was $2.60 billion in the same period last year.
In order to ensure the huge reserves are not remaining idle and to ensure their best utility, government decided to use Forex reserves for government projects. Consequently, the government set up an infrastructure development fund with $2 billion from the reserves.
Recently, a report published by the central bank said that the macro -economy has remained largely stable due to the strong reserves in the crisis-ridden economy. Unfortunately, with the support of remittance inflow the stability has been ensured only in the case of foreign exchange rates, despite unemployment rate soaring in the country. Hence, the stability of the overall economy needs to be addressed with investment. We hope that a stable macro-economy will prevail along creating employment and aid in income growth.