Bangladesh forex reserves cross $37B, highest-ever monthly remittance

Forex reserves of Bangladesh touched a new record of $37.10 billion -- amid the COVID-19 pandemic -- for the first time and is the highest amount of remittance in a single month in the history of the southeast Asian nation

Jul 29, 2020
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Forex reserves of Bangladesh touched a new record of $37.10 billion -- amid the COVID-19 pandemic -- for the first time and is the highest amount of remittance in a single month in the history of the southeast Asian nation.

The surging inbound remittance and enhanced aid from developing partners contributed to a rise in forex reserves to $36.14 billion on July 2.

The inflow of remittance has played a vital role to raise the foreign exchange reserve to $37.10 billion on Monday. In this regard, the Bangladeshi Finance Ministry issued a press release on Tuesday.

The previous highest reserves amounting to $36.016 billion were recorded just a month back on June 30.

Three weeks ago, Prime Minister Sheikh Hasina had pitched the idea to use forex so that the central bank of the country -- Bangladesh Bank -- could explore options.

On July 6, during her directions to the officials, she also raised the idea for Bangladesh Bank and other agencies to assess the possible economic impacts if the government takes loans from the foreign currency reserve keeping a logical amount of the reserve in hand to meet the import expenses.

Hasina, chairing the Executive Committee of the National Economic Council (ECNEC) meeting on a virtual platform directed the relevant departments to explore possibilities of utilising reserves for the betterment of the economy and implementation of major infrastructure projects.

The Prime Minister also asked the officials concerned to explore the practicality of borrowing funds from the foreign exchange reserves as project loans and its potential economic impact.

"We take dollars as loans from foreign sources. We can take loans from our own funds. Bangladesh Bank preserves the forex reserve; we may take loans from it," said Hasina, as quoted before the media by the Planning Minister of Bangladesh MA Mannan after the meeting.

The Planning Minister said he supports taking loans from the reserve for the development projects.

"Though the interest rate of the foreign loan is low, there are many conditions attached to foreign debts. So, ultimately the project costs go high in many cases because of the conditions," he said.

Mannan pointed out about Hasina's direction to all saying, "The Prime Minister thinks that keeping the reserve worth for three-month import expenses in hand is usually safe."

"So, we may take loans domestically from our own fund keeping the logical amount of reserve in hand to meet the import expenditures," the Minister added.

The Finance Ministry release also said the inflow of remittance has shown an incredible surprise at the beginning of the fiscal year 2020-21 (FY21). Expatriate Bangladeshis sent around $2.242 billion remittances during the first 27 days of July in the current fiscal 2020-21. (IANS)

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