BANGLADESH

Foreign exchange reserves of the country have dwindled below $10 billion after maintaining the double-digit-billion mark for three years.

The reserves with the central bank stood at $9.88 billion on Thursday, implying that it will be difficult for the country to meet next three months' import costs.

Senior researcher of Bangladesh Institute of Development Studies (BIDS) Jayed Bakht has expressed concern over the fall in reserves, saying that it would put the balance of payment under pressure.

"The reserves are under pressure due to hike in import cost and decreased flow of remittance," he said.

The economist said it would be difficult for the country to pay the import costs in the next three months if the costs remain same as in the recent past.

"The reserves will face more pressure if the World Bank or International Monetary Fund does not lend money," he added.

The increasing pressure on the reserves also led US dollar to rise against taka.

In line with international standard, every country willing to import has to have foreign exchanges to pay costs of next three months' import.

Bangladesh's forex reserves crossed $10 billion in September 2008.

It crossed $11-billion mark four times in the past three years as export earnings and flow of remittance saw an increase.

It slipped below $11 billion in August when the central bank paid $838 million to the Asian Clearing Union (ACU), the intra-regional forum for settlement of monetary transactions.

In March, the reserves hit $11.32 billion, the highest in the country's history.

Average foreign currency reserves were $10.75 billion in 2009-'10 fiscal and $10.91 billion in the last fiscal.

On the other hand, the flow of remittance is also witnessing a negative trend.

After rising around 15 percent in July and August, it has been on a slope again in September.

According to Bangladesh Bank, expatriates remitted $1.03 billion in July and $1.08 billion in August. But in the first 23 days of September, they sent $0.63 billion, leading to fear that it would not cross $1-billion mark in the whole month.

Growth in remittance was 6.03 percent in the last fiscal, 13.4 percent in 2009-'10 and 22.42 percent in the 2008-'09 financial year.

The import cost in the first two months of the current fiscal year was 35.72 percent higher than that in the same period of the last fiscal.

According to Bangladesh Bank, the rate of opening L/Cs (letters of credit) for fuel oil import increased 91.8 percent in July-August period.

Amid rise in the import costs, the export earnings also increased.

In the first two months of the current fiscal, the export earnings rose 30.44 percent against a growth of 41.47 percent last year.