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Reserves decline following the $1.27 billion ACU payment

Reserves decline following the $1.27 billion ACU payment

CT Online Desk:

Bangladesh's foreign exchange reserves fell to $20.38 billion yesterday after the central bank settled import bills of two months through Asian Clearing Union (ACU), a top official said yesterday. Bangladesh Bank (BB), the country's central bank, cleared $1.27 billion in import bills through the ACU, an arrangement for settling transactions among eight countries, including India, one of the largest trading partners of Bangladesh. The amount of forex reserves was $21.7 billion on January 3 as per the calculation method of International Monetary Fund.

However, if the BB's method for the calculation is used, the country's gross foreign exchange reserves declined to $25.65 billion yesterday, from $26.9 billion on January 3, said the central bank official. The current forex reserves in Bangladesh will cover import bills of more than three-months, which is considered by the IMF as a minimum reserve for a low-income country. Bangladesh's foreign exchange reserves have been receiving attention of various stakeholders in the face of a gradual fall over the last two years as its obligation to international payments continued to remain above the inflows such as export and remittances. The country's forex reserves which were $40.7 billion in August 2021 as per the IMF calculation, have halved since then. At the same time, the taka lost value significantly against the US dollar and other currencies.