The country’s foreign exchange reserve crossed US$ 27 billion mark for the first time on Thursday as the International Monetary Fund released US$ 255 million loan on the day amid heavy purchase of the US dollars by the central bank from local banks.
The idle forex reserve kept swelling because of Bangladesh Bank’s purchase while the commercial banks were grappling with dollars because of lack of demand amid a dull business situation prevailing in the country for months, said BB officials.
The IMF on Thursday released the last two tranches of US$ 255 million of its extended credit facility worth around US$ 1 billion, helping the reserve to march past US$ 27 billion.
The central bank on the other hand purchased around US$ 200 million this month from the local banks taking the total purchase to around US$ 2 billion in the current fiscal year starting from July.
‘The BB is continuing intervening in the forex market by purchasing dollars in a bid to keep the exchange rate of the Taka stable. As the banks are overflowing with dollars because of lack of demand, BB is forced to intervene,’ said an official.
He said the steady remittance and export earnings inflow against a moderate growth in import payments fuelled overflowing of dollars in the country.
The forex reserve had crossed US$ 26.03 billion on August 17 and US$ 25 billion mark on June 25 after BB purchased US$ 3.76 billion in the FY15 ending in June from the local banks.
Former adviser to the interim government Mirza Azizul Islam said that the increasing reserve of the foreign exchange by purchasing dollars by the central bank is not a good sign as the investment scenario is dull.
‘The environment is not business friendly and there is still uncertainty among the businessmen,’ he told New Age on Thursday.
‘The import rose slightly but not as expected. The price fall of fuel and commodities in the international market also lowered the import cost. On the other hand, import of industrial raw materials did not increase which indicated that the investment is sluggish,’ he said.
Dhaka Chamber of Commerce and Industry president Hossain Khaled said although the investment opportunities are there, the businesses are held back because of gas and electricity crisis.
‘The business people are not getting gas and electricity despite repeated assurances from the government. That is why they are reluctant to invest. So there is no dollar crunch in the market and the reserve is increasing,’ he said.
He said the increasing foreign exchange reserve could have been a good sign if the investment scenario was vibrant.
A BB official said, ‘The demand for dollars has continued to be sluggish for the last few months as the business activities are yet to pick up after months of political unrest and uncertainty.’
Before the current fiscal year, the BB purchased greenbacks worth around US$ 13.40 billion from the local banks between FY13 and FY15 to keep the Taka stable against the dollar, he said.
The exchange rate of US dollar has remained at around Tk 77.80 in the inter-bank forex market in the last few months due to the central bank’s repeated intervention.
The idle forex reserve kept swelling because of Bangladesh Bank’s purchase while the commercial banks were grappling with dollars because of lack of demand amid a dull business situation prevailing in the country for months, said BB officials.
The IMF on Thursday released the last two tranches of US$ 255 million of its extended credit facility worth around US$ 1 billion, helping the reserve to march past US$ 27 billion.
The central bank on the other hand purchased around US$ 200 million this month from the local banks taking the total purchase to around US$ 2 billion in the current fiscal year starting from July.
‘The BB is continuing intervening in the forex market by purchasing dollars in a bid to keep the exchange rate of the Taka stable. As the banks are overflowing with dollars because of lack of demand, BB is forced to intervene,’ said an official.
He said the steady remittance and export earnings inflow against a moderate growth in import payments fuelled overflowing of dollars in the country.
The forex reserve had crossed US$ 26.03 billion on August 17 and US$ 25 billion mark on June 25 after BB purchased US$ 3.76 billion in the FY15 ending in June from the local banks.
Former adviser to the interim government Mirza Azizul Islam said that the increasing reserve of the foreign exchange by purchasing dollars by the central bank is not a good sign as the investment scenario is dull.
‘The environment is not business friendly and there is still uncertainty among the businessmen,’ he told New Age on Thursday.
‘The import rose slightly but not as expected. The price fall of fuel and commodities in the international market also lowered the import cost. On the other hand, import of industrial raw materials did not increase which indicated that the investment is sluggish,’ he said.
Dhaka Chamber of Commerce and Industry president Hossain Khaled said although the investment opportunities are there, the businesses are held back because of gas and electricity crisis.
‘The business people are not getting gas and electricity despite repeated assurances from the government. That is why they are reluctant to invest. So there is no dollar crunch in the market and the reserve is increasing,’ he said.
He said the increasing foreign exchange reserve could have been a good sign if the investment scenario was vibrant.
A BB official said, ‘The demand for dollars has continued to be sluggish for the last few months as the business activities are yet to pick up after months of political unrest and uncertainty.’
Before the current fiscal year, the BB purchased greenbacks worth around US$ 13.40 billion from the local banks between FY13 and FY15 to keep the Taka stable against the dollar, he said.
The exchange rate of US dollar has remained at around Tk 77.80 in the inter-bank forex market in the last few months due to the central bank’s repeated intervention.
Source: New Age
