The country’s foreign currency reserve has hit the all-time high US$ 16-billion mark on the back of steady remittance growth and slowing imports, especially that of raw materials. The forex reserve stood at US$ 16.04 billion on Tuesday, which is the second highest in South Asia after India, an official at the central bank said. He said the current reserve is enough to pay import bills for over five months. Bangladesh Bank attributes the record forex reserve to growing remittance inflow, a positive rise in export, the fall in rice import following huge domestic production and its effective steps to bring remittance through the formal channel. Economists, however, think that such higher forex reserve for a country like Bangladesh will create additional pressure on its economy. “Overall, this is not good news for us. It’ll create an additional pressure on the economy,” Dr Khandaker Golam Moazzem, additional director of the CPD’s (Centre for Policy Dialogue) research wing, told UNB over phone. Responding to a question, he said the imports – both consumer goods and capital machinery have not increased which remained the key reason behind the inflating forex reserve. “We see stagnation in investment.” Meanwhile, the remittance growth has also been playing a role in boosting the forex reserve, he added. Golam Moazzem also said the central bank usually takes some initiatives to utilise the additional reserve such a buying safe bonds – US Treasury bonds – for a short time. “Now, it’s essential to increase such bond purchase.” Asked whether such a higher reserve suits the country like Bangladesh, he said it depends on export and import activities. “Even, if we deduct import bills for three months of US$ 10.5 billion (US$ 3.5X3), still there will be a surplus. So, it’s too much.” (Source: UNB)
