ADB loan lifts Forex reserves to 43-month high

Bangladesh's foreign exchange reserves climbed to a 43-month high after the country received a US$1 billion budget support loan from the Asian Development Bank (ADB), according to central bank data.

The country's gross foreign exchange reserves rose to US$35.63 billion on Sunday, up from US$34.59 billion on Thursday. It marks the highest reserve level since November 2022.

Under the IMF's Balance of Payments and International Investment Position Manual (BPM6) methodology, reserves stood at US$31.07 billion, surpassing the US$31 billion mark for the first time. The BPM6 reserve had earlier crossed US$30 billion in January this year.

Bangladesh's reserves had reached a record high of over US$48 billion in August 2021 before declining sharply amid rising import payments, capital flight concerns and mounting pressure on the exchange rate. At one stage, reserves fell to US$25.92 billion in gross terms and US$20.48 billion under BPM6 calculations.

Officials attributed the recent improvement largely to strong remittance inflows through formal banking channels. Between July and June 10 of the current fiscal year, expatriates sent home US$33.96 billion, an increase of US$5.5 billion, or 19.31 percent, compared with the same period a year earlier.

The steady growth in remittance earnings, coupled with external financing support, has helped strengthen the country's reserve position and ease pressure on the foreign exchange market.

TZ