Dollars in reserves insufficient for emergencies, says Salehuddin

The current US dollar reserves held by Bangladesh are insufficient to meet emergency needs, Finance Adviser Dr Salehuddin Ahmed has said.

He added that the Bangladesh Bank’s decision to purchase dollars from the market is therefore justified.

Dr Salehuddin made the remarks in response to journalists’ questions following a joint meeting of the Advisory Council Committee on Public Purchase and the Advisory Council Committee on Economic Affairs. The meeting was held in the conference room of the Cabinet Division at the Secretariat on Tuesday, 23 September.

Journalists asked whether, given the declining demand for dollars, its price should not also fall — and whether the central bank’s recent purchase of two million dollars to maintain price stability had placed undue pressure on importers. In reply, Dr Salehuddin said: “If the dollar’s exchange rate is not stabilised to some extent, it will have adverse effects. Those who send remittances should also consider this — they are our main driving force.”

He continued: “It is correct that we are buying dollars. But our current reserves are not adequate to cope with an emergency in Bangladesh. Suppose a major crisis occurs — what happens if we suddenly need to import critical goods? There’s a misconception that foreign exchange is used solely for imports. If we have no buffer, we will be in danger.”

Dr Salehuddin recalled his tenure as Governor of Bangladesh Bank in 2007–08, when the country faced severe challenges from cyclones Sidr and Aila. “We managed to navigate those crises then. That’s why Bangladesh Bank is now making preparations for such eventualities. We must build up our reserves.”

Regarding the day’s meeting, he said: “There were some notable developments. We import fertilisers and certain food items — but this time, several important decisions were taken. For instance, approval has been granted to upgrade the runway at Shah Amanat International Airport in Chittagong. Additionally, a proposal to further modernise the control tower at Dhaka Airport has been approved. We have also authorised the import of octane, as domestic demand for it is rising. We want to ensure there are no fuel shortages in the country.”

Asked what improvements are planned for Shah Amanat Airport, he explained: “The runway at Shah Amanat Airport is currently rated Grade 1. It needs to be expanded spatially — particularly if larger aircraft are to operate there, it must be upgraded to Grade 2. Simultaneously, air traffic control systems in Dhaka will be modernised.”