Bangladesh’s central bank chief says depletion of foreign exchange reserves not a concern

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Speaking at a seminar on Saturday at the Bashundhara International Convention Centre, Kabir said the fall in foreign exchange reserves was “no cause for alarm”.

The challenge of managing inflation and the dollar rate came at some point, he said.

As Sri Lanka grapples with the worst economic crisis in its history, Bangladesh finds itself in a “comfort zone” in terms of the size of foreign exchange reserves, Kabir added.

“We are in surplus. The reserves are decreasing… It was bigger before. But there is no need to worry. »

Kabir, however, suggested bankers should be on their toes. “In the [2020-21] financial year, we bought more dollars. But we sell [more] this time. We used more import dollars to help the government import fertilizer, oil, and food, among other goods.

That put pressure on the reserves, he said.

Bangladesh’s reserves have fallen from just over $48 billion last August to $41.5 billion currently.

The taka is rapidly losing value against the dollar amid the supply and demand crunch and rising import spending. The dollar was priced at 84.8 Tk in June last year, but is now trading at 92.85 Tk.

According to the International Monetary Fund, if a country has enough reserves to meet import expenses for three months, it has good repayment capacity.

“We need $7 billion every month to meet import expenses. In addition to certain government requirements and services, we must pay a maximum of $26 billion [from reserves] in three months.

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