Bangladesh forex reserves surge to $26.73bn

Following a shift in the political landscape of Bangladesh, the country's foreign exchange reserves have seen a significant increase, bolstered by a positive trend in expatriate remittances. 

As of mid-April, the total reserves have climbed to $26.73 billion, according to the latest updated data from Bangladesh Bank, released on Sunday (April 20).  

According to the central bank, the country’s gross reserves stood at $26.73 billion as of April 17. When measured according to the International Monetary Fund’s (IMF) accounting system, BPM-6, the reserves amounted to approximately $21.39 billion.  

In addition to these figures, Bangladesh Bank maintains a separate account exclusively reported to the IMF, which calculates usable reserves by excluding funds held in the IMF’s Special Drawing Rights (SDR) sector, foreign currency in banks’ clearing accounts, and Asian Clearing Union bills. Based on this metric, the country’s actual expendable reserves are now close to $16 billion.  

A country is generally required to maintain reserves equivalent to at least three months of import costs to ensure liquidity for meeting external liabilities. Bangladesh’s current reserves comfortably exceed this threshold, enabling the country to cover import liabilities for more than three months.  

The IMF’s BPM-6 measurement system calculates net reserves by subtracting short-term liabilities from total reserves. This provides a clearer picture of the country’s real or usable reserves, which are critical for maintaining economic stability.  

A major factor behind the surge in reserves has been the unprecedented inflow of remittances from Bangladeshi expatriates. In the first 12 days of April alone, remittances totalling $1.15 billion were received.  

March marked a historic milestone for remittances, with $3.29 billion flowing into the country during the month—the highest-ever monthly remittance figure in Bangladesh’s history. This surpassed all previous records, underscoring the vital role of expatriates in strengthening the nation’s foreign exchange position.  

The upward trajectory of remittances began in July 2024, coinciding with the interim government’s tenure. Monthly remittance figures since then include:  $191.377 million in July, $222.132 million in August, $240.41 million in September, $239.5 million in October, $2.22 billion in November, $2.64 billion in December, $2.11 billion in January, $2.53 billion in February, and $3.29 billion in March. 

For seven consecutive months since the interim government took office, remittances have exceeded $2 billion per month, significantly bolstering the country’s reserves.  

The robust inflow of remittances has not only strengthened Bangladesh’s reserves but also underscored the resilience of its economy amid global uncertainties. The sustained contributions of expatriates have played a pivotal role in ensuring that the country remains well-positioned to meet its external obligations while fostering economic stability.