Forex reserves cross $34b on remittance boom

Bangladesh’s foreign exchange reserves have hit a new milestone, crossing $34 billion mark as of Monday, February 9.

This growth is largely attributed to a sustained surge in inward remittances and strategic stability in the foreign exchange market.

Arif Hossain Khan, Executive Director and Spokesperson of Bangladesh Bank, confirmed that by the close of business on Monday, gross reserves stood at $34.06 billion. Under the IMF’s BPM6 calculation method, the reserves are valued at approximately $29.48 billion.

Bangladesh’s foreign exchange reserves have shown steady growth over the past month, rising from $32.32 billion on January 15 to $33.25 billion on February 2, and reaching $34.06 billion by February 9 (BPM6: $28.03B, $28.75B, and $29.48B respectively).

While reserves peaked at an all-time high of $48 billion in August 2021, they faced a sharp decline due to money laundering and economic instability, falling to $20.48 billion at the time of the previous government’s fall.

The current recovery marks a significant turnaround for the nation’s economy.

The "remittance windfall" continues to be the backbone of this recovery. Following a strong December, expatriates sent over $3 billion in January alone. This momentum has carried into February, with $1.03 billion arriving in the first eight days—a significant jump from the $ 54 percent received during the same period last year.

Central bank sources indicate that the current leadership has managed to stabilize the exchange rate at approximately Tk122 per US dollar. Notably, the new governor has not sold a single dollar from the reserves since taking office, allowing the stockpile to grow organically.

Source: UNB