Forex reserves increase after loans from IMF, ADB

After receiving loan payments from the Asian Development Bank (ADB) and the International Monetary Fund (IMF), Bangladesh Bank’s foreign exchange reserves have increased.

As of the moment, the gross reserves total USD 25.82 billion.

Applying the BPM 6 accounting technique recommended by the IMF, the reserves come to USD 20.40 billion. However, the net or actual reserves have not been made public by the central bank.

Mezbaul Haque, the executive director and spokesperson for Bangladesh Bank, revealed this information at a press conference on Sunday.

As of 7 December, the gross reserves were USD 24.66 billion, while the reserves in the BPM 6 accounting system were USD 19.13 billion. 

Mazbaul Haque reported that on 15 December, the second installment of the IMF loan, amounting to USD 689.8 million, and USD 400 million from the ADB loan were added to Bangladesh’s foreign currency reserves. This addition has contributed to the overall increase in reserves.

According to data from central banks, as of last June, IMF debt was valued at USD 3.37 billion, while liabilities within the Asian Clearing Union (ACU) were USD 50 million. In addition, banks have $1 billion in transactions that are pending Foreign Currency Clearing (FC) settlement. The IMF advises figuring reserves without factoring in these liabilities.

Bangladesh must meet the revised IMF target of raising its net foreign exchange reserves to USD 17.78 billion by December 31. Bangladesh Bank sources state that the nation presently has net reserves that just barely surpass USD 16 billion.

The IMF has revised the reserve target for Bangladesh, effectively reducing it from USD 26.80 billion at the beginning of the year to the new goal of USD 17.78 billion for December. An IMF report provides a detailed review of Bangladesh’s overall economic situation and outlines necessary actions.

Bangladesh was able to obtain the second tranche of the IMF loan, even though they were not able to meet the June deadline. The multinational organization gave its approval for the second tranche, worth about USD 690 million, on December 12.

The protracted dollar issue continues despite an increase in the central bank’s reserves. Banks are still buying US dollars at a premium over the official rate, which forces importers to pay a premium for dollars. Traders believe that this difference in the value of the dollar affects the prices of imported items.

This article has been posted by a News Hour Correspondent. For queries, please contact through [email protected]
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