Current account deficit narrows to $5.2 billion

Bangladesh’s current account deficit narrowed in the first half of this fiscal year due mainly to a fall in imports as well as a surge in exports and remittances.

The current account deficit stood at $5.2 billion in the first half of FY23, down from $8.2 billion in the same period of the last fiscal year, as per the latest data from the Bangladesh Bank.

Imports fell by 2.15 per cent to $38.13 billion during these six months because the central bank had taken a series of initiatives to discourage the purchase of products and services from the global market.

In July last year, the central bank imposed a 100 per cent letter of credit (LC) margin on the imports of luxury and nonessential items.

In the same month, the regulator asked banks to inform it 24 hours before opening LCs of $3 million or above as part of austerity measures.

On the other hand, exports grew by 11.04 per cent year-on-year to $25.83 billion between July and December of this fiscal year.

Bangladesh’s remittance income reached $1.96 billion in January, which was 14.92 per cent higher compared to the same month last year, according to the latest data from the Bangladesh Bank.

The data also shows the country’s trade deficit went down by 21 per cent to $12.3 billion in July-December of FY23 from $15.7 billion in the same period of the previous fiscal year.

Officials at the Bangladesh Bank said growing export earnings and slowed import payments will reduce pressure on the country’s foreign exchange reserves. Bangladesh’s gross forex reserves stood at $32.69 billion on Thursday. Gross forex reserves reached $48 billion, the record highest, in August last year.