Foreign exchange reserves to reach $40 billion in next fiscal year, BB governor hopes

Bangladesh Bank Governor Dr Ahsan H Mansur on Wednesday projected that the country's foreign exchange reserves will rise to $30 billion by June, with a further target of reaching $40 billion in the upcoming fiscal year.

The governor made the remarks at an event organised by the Policy Research Institute (PRI), highlighting the central bank's outlook on the economy and banking sector.

“By next month, the reserve will be between $27 billion and $30 billion. There is a target to raise the reserve to $40 billion in the next fiscal year,” Dr Mansur said.

He also addressed the challenges facing the microcredit sector, noting that high interest rates are becoming increasingly unsustainable.

 “Microcredit with a 26 per cent interest rate cannot survive. Customers are now accessing loans from agent bank branches at nearly half that rate. Over time, microcredit at such high interest will be phased out as it fails to compete,” he said.

As of May 19, the central bank's latest data shows Bangladesh’s gross foreign exchange reserves stand at $25.44 billion.

Under the International Monetary Fund's (IMF) Balance of Payments and International Investment Position Manual (BPM6) methodology, usable reserves are reported at just over $20 billion.