Bangladesh's forex reserves stand at $27.31bn

Bangladesh's foreign exchange reserves currently stand at $27.31 billion, according to the latest data from Bangladesh Bank. However, when calculated using the International Monetary Fund’s (IMF) Balance of Payments and International Investment Position Manual (BPM6) guidelines, the reserves total $22.25 billion, the central bank said in a press release today.

The IMF-aligned BPM6 methodology excludes certain components that were previously included in the gross reserve figure, such as the Export Development Fund (EDF), liabilities, and other encumbered assets. This has resulted in a lower reported reserve figure under the IMF’s standard, which Bangladesh agreed to adopt as part of its $4.7 billion loan program with the global lender.

The distinction between the two figures is becoming increasingly relevant, particularly in the context of Bangladesh’s ongoing negotiations with the IMF and global investors. As part of the loan agreement signed in January 2023, Bangladesh committed to greater transparency in its financial reporting, including the adoption of BPM6-compliant data disclosures.

Economists note that while the gross reserve figure is still a useful benchmark for assessing the country's overall foreign exchange position, the BPM6 figure provides a more realistic snapshot of liquid, usable reserves.

Despite the apparent gap between the two measurements, Bangladesh Bank officials say the current level of reserves remains adequate to cover more than four months’ worth of imports, which is above the international benchmark of three months.

The announcement comes amid a fragile recovery in the country’s external sector. After facing pressure from high import bills and a decline in remittance inflows during 2022 and early 2023, Bangladesh has seen some stabilization due to a narrowing trade deficit, a slight pickup in remittances, and moderated import growth.

Policymakers remain focused on sustaining reserve levels through a combination of remittance incentives, tighter import management, and support from multilateral lenders.