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The Bangladesh Bank (BB) has finally reached the net international reserve (NIR) target, a condition set by the International Monetary Fund (IMF) as part of its $4.7 billion loan package for stabilising the country's macroeconomic situation.
The central bank achieved the target nearly two weeks ahead of the deadline, thanks to the growing inflow of US dollars, officials said.
Under the IMF condition, the Bretton Woods Institution asked the central bank to maintain the minimum NIR equivalent to $15.3 billion by this month. The banking regulator exceeded the figure on Thursday.
According to the Bangladesh Bank data, net reserves stood at $15.58 billion on Thursday, giving central bankers some respite as they had failed to hit the target on several occasions in the past.
When contacted, Bangladesh Bank Spokesperson Husne Ara Shikha said the visiting IMF team in its recent meeting with the central bank had expressed doubt over meeting the NIR target.
"But the truth is, we crossed the target today [Thursday] as NIR now stands at $15.58 billion," she said.
Seeking anonymity, a central bank official said the Asian Development Bank had recently released $600 million in budget support that added to the country's forex reserves, helping achieve the target.
Apart from the rapidly growing remittance inflows, the official said, another $500 million support would come from the World Bank while The OPEC Fund for International Development would release a $100 million fund by this month.
"So, the NIR issue will not create any problem in the coming years," the central banker said.
Achieving the NIR target was one of the concerns for the multilateral lending agencies and the central bank. To meet the target, the Bangladesh Bank changed its forex management strategy by focusing on buying more dollars from the market and stopping the American greenback's sales from reserves.
The central bank data shows it purchased $47 million from the market in October against the sale of $20 million. In November, it purchased $47.5 million but did not sell a single cent.
In the first 17 days of this month, the banking regulator bought around $60 million from the market without selling a single cent from reserves. The country also received remittances amounting to $1.7 billion in this period, according to official data.