In the Monetary Policy Statement (MPS) for the January-June period of FY-2023-24, Bangladesh Bank (BB) has expressed high optimism about the improvement of the country’s balance of payment (BOP) at the end of FY24.
The central bank hopes that under BOP, the current account balance deficit will come down to $332 million at the end of FY24, banking on the expected continuous growth of export earnings and remittance inflow.
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The current account balance was a $579 million surplus for the July-November period of FY24, according to the latest data from BB.
In the MPS for the second half of FY24, the BB has projected that the financial account will be $200 million surplus at the end of FY24. However, in the July-November period of FY24, the account deficit was $5.39 billion — which was the highest ever in the country’s history.
The financial account deficit reached the highest level due to the lack of foreign direct investment and fresh loans from external sources and the jump in repayment of foreign loans, according to the latest data and experts.
BB is also optimistic that at the end of FY24, the overall BOP will reach only $604 million negative. This amount was at $4.89 billion negative in the July-November period of FY24.
Since the shortfall in the overall BOP has to be met from the country’s forex reserves, it will not be possible to stop the depletion of reverses if the overall BOP continues to be negative.
