Bangladesh Bank reports that the country’s foreign exchange reserves have reached $21.75 billion, calculated under the IMF’s BPM6 standard, marking a significant indicator of financial stability for the nation. While total gross reserves are higher, the IMF-adjusted figure highlights available liquid resources—crucial for routine import financing and macroeconomic resilience. On April 30, reserves last crossed the $22 billion threshold for the first time in 19 months, before dipping below $22 billion again in early May following payments through the Asian Clearing Union. Since then, reserves have lingered under the mark for about 48 days. According to Bangladesh Bank’s Executive Director and spokesperson, Arif Hossain Khan, gross reserves currently stand at around $26.82 billion, up from $26.15 billion two weeks earlier. Bangladesh’s reserves touched an all-time high of nearly $48 billion in mid-2021, driven by pandemic-related inflows, but fell sharply thereafter amid rising global fuel and food prices triggered by geopolitical tensions. Since then, consistent imports and debt repayments have weighed on reserve accumulation. Nevertheless, remittances and export earnings have gained strength from August 2024 onwards, helping stabilize the dollar market. Experts note that the $21.75 billion level provides a buffer equivalent to about three to four months of import payments, a generally accepted threshold for external safety. While this does not signal economic crisis, fluctuations below this line are a warning, and the current uptick is seen as reassuring for commerce and trade sectors. Despite remittance and export growth, reserves have not climbed proportionally due to offsetting declines in other financing sources. Between July and April of FY25, foreign direct investment dropped by $370 million, while grants and foreign loans fell by $1.86 billion and $1.36 billion, respectively. Simultaneously, import payments rose by $2.42 billion. Bangladesh Bank confirmed this trend, noting that the new governor has not sold any reserves, but repayments of outstanding letters of credit and debt obligations have been ongoing. Looking ahead, analysts emphasize the importance of balancing import growth with reserve replenishment. They stress the need for sustained inflows from remittances, exports, foreign loans, and investment. With global volatility persisting—driven by inflation and geopolitical risks—maintaining a cushion above the three-month import benchmark is vital. Policymakers are urged to support export diversification, promote foreign direct investment, and secure concessional finance from international agencies. These measures will be crucial for stabilizing the taka, avoiding currency pressures, and preserving Bangladesh’s macroeconomic outlook. Currently, Bangladesh’s foreign exchange reserves stand at $21.75 billion, indicating strength rather than a lack of concern. They’re sufficient for short-term needs, but sustaining and improving the cushion will depend on coordinated economic strategies across government, trade partners, and financial institutions.
