Banks asked to encash export proceeds for boosting reserves

Bangladesh Bank has asked banks to encash exports proceeds immediately as its foreign exchange reserves are depleting fast amid rising import payments.

Governor Abdur Rouf Talukder instructed the bankers on Monday after holding a meeting with the chief executives of banks at the BB headquarters in Dhaka.

Around US$9 billion remained stuck in nostro account and $1.5 billion as overdue export, according to BB spokesperson Md Serajul Islam. A nostro account refers to an account that a bank holds in a foreign currency in another bank.

“The governor instructed the bankers to encash the export proceeds in local currency as soon as possible and take steps required bringing remittances,” Islam told reporters after the meeting.

The forex reserve of Bangladesh fell to $39.61 billion on Monday from $46.15 billion in December due to growing import payments.

To meet the growing demand for US dollars, BB sold a record $7.62 billion to banks in the fiscal 2021-22. The central bank also injected $808 million into the money market over the last few days of this fiscal year, according to BB officials.

Mentioning the latest BB circular on loan rescheduling, the BB spokesperson said that bankers welcomed the BB’s latest loans rescheduling policy.

He said that banks now can reschedule defaulted loans on their own and they need no prior approval from the BB to do so as they maintain good relations with their respective customers.

After the meeting, Association of Bankers Bangladesh (ABB) Chairman and BRAC Bank Managing Director Selim RF Hussain said, “We support the BB policy.”