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Reserve crosses $18b as idle dollar keeps swelling

Staff Correspondent

The country’s foreign exchange reserve crossed $18-billion mark on Thursday after Bangladesh Bank purchased fresh US dollar worth $2.28 billion in the first five months and 19 days of the current fiscal year to keep the inter-bank foreign exchange market stable.
Higher export earnings against a lower import payment in the last few months played a significant role in increasing the country’s foreign exchange reserve, BB officials told New Age.
According to BB data, the foreign exchange reserve reached $18.05 billion on Thursday from $17.86 billion on Wednesday.
The BB official said the huge amount of forex reserve had become idle as the investment sector was now passing a stagnant situation due to ongoing political turmoil.
The forex reserve will increase more in the months to come if the imports do not increase in accordance with the required demand from the industrial sector, the official said.
According to international standard, a country needs to have enough forex reserve to clear import bills for three months.
The country will be able to meet import bills for six months by using the $18 billion forex reserve, the BB officials said.
The country’s foreign exchange reserve crossed $17-billion mark on October 22 after which it increased to $17.60 billion on November 7.
The foreign exchange reserve, however, declined to $16.63 billion on November 10 after the country had made a routine payment of $890 million to the
Asian Clearing Union against imports of various items during the September-October period of the current year.
On August 13 of this year, the forex reserve crossed $16-billion mark for the first time.
A BB official said that the country had been enjoying comfortable forex reserve since the beginning of the FY13 as imports declined significantly amid political unrest.
Under the circumstances, the BB started to intervene in the foreign currency market after the Bangladeshi currency had fallen to around Tk 84 a dollar in the first half of 2012 from around Tk 71 in the previous year, he said.
But the value of the dollar started to decline from late last year because of fall in import payments amid slowing businesses and lack of import and it came down below Tk 80 in December 2012, the official said.
After the BB bought around $4.53 billion in the FY13, the Taka has become stable at around 77.75 a dollar for the last few months, he said.
‘The BB also continued to purchase greenback from the banks this fiscal year. It has already purchased $2.28 billion between July 1 and December 19 of the FY 14,’ he said.
Another BB official said that the country had earned a remarkable amount of inward remittance in the first 13 days of this month as the expatriates Bangladeshis sent $573.06 million in the period which pushed up the reserve, he said.
The BB data, however, showed that the inward remittance had declined in the last few months due to the dull
business situation amid political unrest. 

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