Forex reserves steadily rise over $27b now

Bangladesh economy feels some respite as the country's foreign-exchange reserves rebound to a 20-month high of US$27.41 billion by the end of April 2025 by official count, despite major payouts.

Bangladesh Bank (BB) sources say the recorded reserves size was the highest since August 2023 when the figure was $29.26 billion.

Despite the government having to make substantial payment in clearing accumulated external overdue bills in recent months, they add, the forex reserves continued rising, which gives an indication of steady rebound in foreign-exchange reserves.

As a matter of fact, the volume of net international reserves (NIR) also crossed $16.0-billion mark by the end of this past month of April.

Officials and money-market analysts say significant rises in inflow of remittances and export receipts largely prop up the country's foreign-exchange reserves notwithstanding a steady increase in import orders and settlements.

According to the latest statistics of the BB, the country's central bank, the gross forex reserves stood at $27.41 billion and $22.05 billion in BB and IMF's BPM6 calculations respectively.

On the other hand, the NIR rose to $16.12 billion after April 30, 2025, according to the official data.

Seeking anonymity, a BB official says the country's forex reserves continued to grow to cross $27 billion even after paying off too many external overdue bills, which is a "significant achievement".

"And this remarkable turnaround comes without assistance of the IMF (International Monetary Fund)," the official told The Financial Express-a day after the finance adviser of the post-uprising government said Bangladesh's economy is no longer IMF-World Bank-dependent as the Fund still kept loan release on the backburner.

The central banker said BB Governor Dr Ahsan H. Mansur, soon after +taking charge of the banking regulator in August last year, instructed them to clear all the overdue bills to improve image of the country globally.

As part of the instructions, the official said, they cleared all external payments backlog, like payments to Chevron and Qatar Energy. Despite the major payments, the reserves keep on the upturn.

Giving full credit to where credit is due--remitters and exporters--for bolstering the reserves, the BB official said, "The way the remittance is coming in recent days, the reserves will stay over $25 billion even after paying ACU liabilities amounting to $1.90 billion due in May."

The BB data showed remitters sent foreign currencies equivalent to $2.61 billion until April 29, 2025. With the latest injections, the country bagged $24.40 billion in remittances so far this fiscal (FY'25), the second-highest in the history after the FY'21 receipt of $24.77 billion.

In terms of export, the country registered a 10.52-percent increase in export earnings with $37.19 billion bagged in the first nine months of the FY'25 from $33.65 billion earned during the corresponding period of the last fiscal (FY'24).

As the feel-good mode prevails, Petrobangla in a press release Wednesday said they had managed to clear all external debts amounting to $3.74 billion two months before the cutoff time till June 2025.

The corporation mentioned that it cleared liabilities worth $1.45 billion of four types of creditors in the last two months (March and April).

The actual import in terms of settlement of letters of credit (LCs) grew by 4.07 per cent to US$45.99 billion during the July-February period of the current fiscal year (FY) 2024-25, from $44.19 billion in the same period of the previous fiscal year.

On the other hand, the opening of fresh LCs, generally known as import orders, rose by 4.62 per cent to $47.28 billion in the first eight months of this fiscal from $45.19 billion in the same period of FY'24.

Talking to the FE, Chairman of Policy Exchange Bangladesh Dr M Masrur Reaz said the steady rise in forex reserves gives an early but clear indication that the country's external sector like BoP is on right track for recovery.

"And the increase comes at a time when the import orders and settlements keep rising, which is quite encouraging, and the growth is robust," says the economist.

He notes that the significantly rising inflows of foreign currencies through remittance and export help bolster the reserves.

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