Import slump sends reserve to record $13bStaff Correspondent
The country’s foreign exchange reserve on Monday crossed $13-billion mark for the first time due mainly to a slump in imports in the last few months, Bangladesh Bank’s dollar buying spree and increasing remittance inflow.
A BB official told New Age on Monday that the forex reserve had reached $13.05 billion on the day from $12.84 billion on Sunday.
Because of the contractionary monetary taken by the BB, the import growth in the first five months of FY 2012-13 fell heavily allowing the country to save foreign currency, said BB officials.
But, the country’s industrial sector has suffered heavily because of lower import of raw material and capital machinery, said economists.
BB data showed that the country’s import bill payment in July-November of FY 2012-13 had registered a negative growth of 13.25 per cent compared with of 60.82 per cent growth in the corresponding period of the last financial year.
LC settlements in the first five months of FY 2012-13 were $13.34 billion against $15.37 billion in the corresponding period of the FY 2011-12.
Another BB official said the BB had purchased more than $2 billion from the local commercial banks to keep the value of the greenbacks strong against the taka for encouraging the expatriate Bangladeshis and exporters.
He said the BB had intervened in the market recently to protect the interest of exporters and migrant workers through purchasing forex from the banks.
They said that purchasing of the US dollar by the Bangladesh Bank in the first half of the current financial year had also contributed to the robust foreign exchange reserve in the period.
The remittance inflow, which has a significant impact on forex reserve, had increased by 16.49 per cent to $14.17 billion last year compared with that of in 2011.
The expatriate Bangladeshis sent $ 14.17 billion in remittances in 2012 against $12.17 billion in 2011.
Former Bangladesh Bank governor Salehuddin Ahmed said that there was no reason to feel satisfied to a buffer reserve as it had not brought any direct benefit for the country’s economy.
He said the import of capital machinery and industrial raw materials had significantly decreased in the last few months which played a role for attaining the buffer reserve.
The government should take measure to invest the forex reserve in the productive sector, he said.
The settlement of LCs for the capital machinery totalled only $803.12 million in July-November against $1,115.75 million in the first five months of the FY 2011-12.
LC settlements in the first five months of FY 2012-13 for the industrial raw materials were $5.38 billion against $5.74 billion in the corresponding period of the FY 2011-12, showed the BB data.
The Centre for Policy Dialogue on Saturday said that the government would not be able to achieve its target of 7.2 per cent GDP growth for this fiscal year mainly due to a decreased growth in investment, export and industrial production.
The current import trend of capital machinery is not sufficient for achieving the expected GDP growth, it said.
The BB’s reserve had crossed a $12-billion mark on October 19, 2012 but it declined to $11-billion mark again when the central bank paid the import bill to the Asian Clearing Union.
The foreign exchange reserve, however crossed $12-billion mark on December 10 and it stood at $12.75 billion on December 31, 2012.
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