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BD pays $1.27b to ACU for May-June imports

Forex reserve drops below $32 billion


Siddique Islam | Published: July 06, 2018 11:17:00 | Updated: July 10, 2018 10:21:07


Photo courtesy: ADB

Bangladesh has made a routine payment of US$ 1.27 billion to the Asian Clearing Union (ACU) against the imports during May-June period of this calendar year, officials said.

After the payment, the country's foreign exchange (forex) reserve again fell below $ 32 billion on Wednesday.

It happened after nearly two months due to higher import payment pressure on the economy.

The forex reserve came down to $ 31.93 billion on the day from $ 33.17 billion of the previous working day. It was $ 31.94 billion on Thursday, according to the central bank figures.

The Bangladesh Bank (BB) has already remitted the fund to the ACU headquarters in Tehran in line with the existing provisions of the union, said an official.

On May 09, the forex reserve came down to $ 31.92 billion after making the ACU payment for March-April period from $ 33.23 billion of the previous working day.

The amount of ACU payment dropped to $ 1.27 billion during the period under review from the previous level of $ 1.39 billion, mainly due to lower import from its member countries particularly from India, the officials added.

"We expect such payment may fall slightly in the coming months following lower rice import from India," a senior official of BB told the FE.

Bangladesh is now importing different consumer items, cotton, raw materials and capital machinery from the ACU member countries, particularly from India, Pakistan and Bhutan, the central banker added.

Under the existing provisions of ACU, the outstanding import bills and interests thereof among the member countries are to be paid at the end of every two months.

ACU is an arrangement involving Bangladesh, Bhutan, India, Iran, Myanmar, Nepal, Pakistan, Sri Lanka and the Maldives.

Through it intra-regional transactions among the participating central banks are settled on a multilateral basis.

The union started its operation in November 1975 to boost trade among the member countries.

Bangladesh and Myanmar joined the union as the sixth and seventh members in 1976 and 1977 respectively. Bhutan joined ACU in December 1999 and the Maldives in January 2010.

Meanwhile, BB is providing foreign currency support to the banks continuously for settling their import payment obligations.

As part of the move, BB sold $ 17 million to three commercial banks at market rate on Thursday to meet the growing demand for the greenback.

The US dollar was quoted at Tk 83.70-Tk 83.75 each in the inter-bank forex market on the day against Tk 83.75 of the previous working day, according to the market operators.

The central bank has resumed providing the foreign exchange backup in the recent months through selling the US currency to the banks directly to keep the market stable.

A total of $ 37 million was sold since July 02 of the current fiscal year (FY), 2018-19, to the commercial banks as part of its ongoing support, according to the BB officials.

The central bank may continue providing such support to the banks in line with the market requirement, they hinted.

siddique.islam@gmail.com

 

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