Forex reserves fall further to $20.89 billion

Bangladesh's foreign exchange reserves decreased by $60 million in a week to hit $20.89 billion on October 25, according to the central bank data.

It was $20.95 billion last week.

The reserve has halved in a span of two years, as it was around $40.7 billion in August 2021 and $33.4 billion at the end of 2021-22, according to a document of the International Monetary Fund.

The volatility in the global market driven by the Russia-Ukraine war has sent commodity prices higher, hitting the reserve level of import-dependent countries such as Bangladesh, experts said.

The reserves have been falling continuously, since banks, especially the state-run lenders, are taking US dollar support from the central bank to settle import payments of Bangladesh Petroleum Corporation, Bangladesh Agricultural Development Corporation, and Bangladesh Chemical Industries Corporation among other agencies.

On the other hand, export and remittance receipts, the two biggest sources of US dollars for Bangladesh, have remained lower than the expected levels.

Remittance inflows dropped to a 41-month low in September. Although export earnings were up 10.4 percent year-on-year in the month, the takings were the lowest in three months.