Forex reserves dip below $33b

The country’s foreign exchange (forex) reserves have declined below $33b as a payment of $1.12 billion to the Asian Clearing Union (ACU) is cleared.

The Bangladesh Bank paid $1.12 billion to settle payments for its imports from other ACU members. After the payment, the forex reserves stand at $32.52 billion, said BB Spokesperson Md Mezbaul Haque on Sunday.

The ACU is an arrangement involving Bangladesh, Bhutan, India, Iran, Myanmar, Nepal, Pakistan, Sri Lanka and the Maldives, through which intraregional transactions among the participating central banks are settled on a multilateral basis.

The member countries of the ACU clear their payments every two months. The ACU is headquartered in Tehran.

The gross forex reserves reached a record high of $48 billion in August 2021.

The Bangladesh Bank injected $12.6 billion into the country’s foreign exchange market from reserves, along with taking a number of other initiatives, over the course of 2022.

Of the figure, the regulator pumped $7.47 billion into the forex market during the last six months of 2022. On Thursday, it sold $140 million to banks.

The Bangladesh Bank in August 2021 began pumping USD into the forex market when banks began facing dollar shortages due to growing import payments, which was triggered by economic recovery from the Covid-19 crisis.

The crisis intensified just a few months later when Russia invaded Ukraine in February 2022.

The war further disrupted the global supply chain, which in turn caused food prices to skyrocket in the international market.