IMF, ADB loans to boost reserves in Dec: Bangladesh Bank

Bangladesh's foreign exchange reserves will increase in December as the country is set to receive $1.31 billion in loans from various sources, including $689 million from the second tranche of the International Monetary Fund (IMF), a central banker said yesterday.

The Washington-based lender on Tuesday approved the second tranche as part of the $4.7 billion credit programme.

"The $689 million will be added to the forex reserves by December 15," Bangladesh Bank Executive Director and Spokesperson Md Mezbaul Haque said at a press briefing at the central bank headquarters in Dhaka yesterday.

Bangladesh is going to receive $400 million from the Asian Development Bank next week.

Another $90 million will come from South Korea and an additional $130 million from other sources, Haque said.

The reserve stood at $19.13 billion on December 6, which was $46.4 billion in 2020-21, the highest on record.

"We expect that the expenditure from reserves will be lower than the amounts we are receiving. This will help it accumulate. Therefore, the reserves will increase this month."

Seeking anonymity, a senior official of the BB said the central bank is aiming to keep the reserve level stable until the national election slated for January 7.

The BB has continued to sell the US dollar to banks, supplying about $5 billion between July 1 and November 28.

The BB sells about $60 million each working day, mostly to the state-run banks to help them settle import bills of government agencies such as the Bangladesh Petroleum Corporation, the Bangladesh Agricultural Development Corporation, and the Bangladesh Chemical Industries Corporation.

Replying to a question, the BB spokesman said that the central bank is following a tight monetary policy to control the skyrocketing inflation.

"Curbing inflation is our first priority, so our policy measures are all aimed at fighting it."

Inflation stood at 9.49 percent in November, according to the Bangladesh Bureau of Statistics, way higher than the government target of 6 percent for the current financial year.

Haque also said that the central bank has continued its efforts to make the foreign exchange rate market-based.

"Our current account balance is now in surplus, but the financial account is still in negative territory and we will have to work on it."

At the end of October, the deficit in the financial account stood at $3.96 billion, in contrast to a surplus of $1.27 billion during the same period a year earlier, BB data showed.

Between July and October, the current account balance was $233 million in surplus, in contrast to a deficit of $4.48 billion previously.