The country’s foreign exchange reserves were at $19.99 billion on Thursday as per the BPM6 method of the International Monetary Fund (IMF), according to the latest Bangladesh Bank (BB) data.
The figure was $21.15 billion on March 6.
BB Executive Director and spokesperson Mezbaul Haque told the Business Post that the central bank paid $1.29 billion as ACU payment last week.
However, the gross reserves stood at $25.23 billion on March 13.
BB started following international standards in calculating foreign exchange reserves as per a condition set by the IMF for a $4.7 billion loan approved for Bangladesh last year to mitigate the forex crunch.
Since 2012, IMF member countries have been calculating reserves with the Balance of Payments and Investment Position Manual (BPM6). But BB took over a decade to implement it.
Reserves calculated as per the BPM6 method are not the net or actual reserves of Bangladesh. Several short-term liabilities, including SDRs from IMF, are excluded in calculating net reserves. According to that, Bangladesh's net reserves are now around $20 billion.
An analysis of Balance of Payment (BoP) data also clearly indicates that the government has been mostly unable to curb the steady loss of foreign exchange reserves.
BB pumped $8.22 billion of support from the reserves to stabilise the BoP in FY2022-23, which was $6.5 billion in FY2021-22. As a result, gross reserves fell from $41.82 billion to $31.2 billion in FY23.
Calculated under the IMF method, these reserves would stand at $33.38 billion and $24.75 billion in FY22 and FY23, respectively.
At the end of FY23, Bangladesh had the capacity to cover 4.6 months of import expenses with the reserves. Experts warn that as this figure continues to decrease, it will take down the country’s capacity for essential commodity imports.
