Bangladesh’s foreign currency reserves increased by $318 million in one week, reaching $19.53 billion on June 19, according to Bangladesh Bank data. This is up from $19.21 billion on June 12.
This increase provides a much-needed boost to the supply of US dollars, which has been significantly strained over the past few years due to higher outflows than inflows.
The upward trend might continue, as Bangladesh is expected to receive $1.65 billion from the International Monetary Fund (IMF) and the World Bank by the end of the month.
The IMF may release $1.15 billion as part of its $4.7 billion loan in late June, and the World Bank will provide $500 million in budget support, potentially pushing reserves above $21 billion.
This improvement in forex reserves follows the central bank’s decision to adopt a more flexible exchange rate regime in May.
On May 8, the banking regulator introduced the Crawling Peg Mid-Rate, allowing banks to freely trade US dollars at around Tk 117. Currently, the highest interbank exchange rate is Tk118 per dollar.
Mismanagement in the forex market, frequent policy changes by the central bank, and the disparity between the official and unofficial exchange rates have also contributed to the decline. Since August 2021, forex reserves have dropped by $24 billion.
