Foreign exchange reserves cross $20 billion threshold once again

Bangladesh’s foreign reserves have once again crossed the $20 billion threshold after a two-month dip.

However, this rebound may be temporary, as a significant payment is due next week for the Asian Clearing Union, or ACU, bill, which is likely to lower the reserves.

According to a report by Bangladesh Bank on Thursday, reserves, calculated under the BPM6 method, have reached $20 billion. This is the first time since Sept 4 that reserves have risen to this level.

The central bank’s reserve data was last published just four days before the fall of the Awami League government. At that time, the reserves stood at $20.48 billion on Jul 30, and the same level was recorded on Aug 21.

Following the payment of the ACU bill for imports, reserves dropped to $19.44 billion on Sept 12.

As of the end of October, reserves stood at $19.87 billion, reflecting an increase of $130 million in just one week.

On Oct 23, reserves had been at $19.80 billion, showing a $70 million rise that week.

Bangladesh Bank spokesperson and Executive Director Hosne Ara Shikha said the increase in reserves was primarily due to the rise in remittance inflows.

"However, remittances do not directly contribute to reserves," she added.

For three consecutive months, remittances have exceeded $2 billion.

In August, remittances amounted to $2.32 billion, followed by $2.40 billion in September and $2.39 billion in October.