Economy
Cenbank says Bangladesh’s Net Reserve Surpasses IMF Target
Bangladesh’s net reserve now stands at $16 billion, surpassing the $14.7 billion target set by the International Monetary Fund (IMF) for June, as reported by Bangladesh Bank.
As of June 30, the gross reserve was $21.83 billion, up from $19.4 billion on June 26, according to the Balance of Payments and International Investment Position Manual (BPM6), confirmed by Bangladesh Bank Spokesperson Md Mezbaul Haque. The net reserve, representing readily available cash from the gross reserves, excludes short-term liabilities based on the IMF’s formula as per BPM6.
This achievement marks the first time Bangladesh has exceeded the IMF target since the approval of a $4.7 billion loan package in February of last year. In April, the net reserve had fallen below the threshold to $12.8 billion from $19.6 billion at the end of June 2023, according to the IMF’s second review report under the loan package.
Meeting the IMF Target and Its Consequences
While Bangladesh has met the IMF’s June target, it has come at the cost of import compression, which has slowed economic growth and fueled inflation due to rising fuel costs. Bangladesh Bank Governor, in a letter to the IMF, admitted that continued import compression has slowed economic activities. Persistently high global commodity prices and the ongoing depreciation of the taka have kept inflation high, disproportionately burdening the poor.
Bangladesh’s imports declined by 15.42% in the first nine months of the outgoing fiscal year FY24, according to Bangladesh Bank data. Additionally, an inflow of $2 billion in loans, including $1.15 billion from the IMF and $900 million from other sources as budget support, has also helped Bangladesh surpass the IMF’s net reserve target.
Moreover, halting dollar sales from the reserves has contributed to this achievement. Bangladesh Bank stopped selling dollars from the forex reserve on May 8 after introducing a new crawling peg mechanism, raising the dollar price from Tk110 to Tk117 in a single day, marking the biggest devaluation of the taka in the country’s history.
Expatriate Bangladeshis sent approximately US$ 2.11 billion in remittances during the first 28 days of September in the fiscal year 2024-25, according to data released by Bangladesh Bank on 29 September.
Of this total, state-owned and specialised banks handled $679.10 million, while private banks received $1.43 billion in remittances.
Chief Adviser to Bangladesh’s interim government, Professor Muhammad Yunus, has vowed to expedite reforms and hold elections swiftly. Yunus, who recently assumed the role after the collapse of Prime Minister Sheikh Hasina’s 15-year administration, expressed his commitment during an interview with Tokyo-based news outlet NHK WORLD in New York on Sunday. He was attending the United Nations General Assembly at the time.
Following mass student-led protests that ended Hasina’s long-standing rule in August, Yunus stepped in as the leader of the caretaker government. Known for founding Grameen Bank, an institution providing microloans to the underprivileged, Yunus, along with the bank, earned the Nobel Peace Prize in 2006 for his efforts in poverty alleviation.
During the interview, Yunus emphasized that the interim government’s primary mission is to implement reforms promptly and ensure elections are held as soon as the groundwork is complete. He underscored the importance of success, stating, “Failure is not something that we can accept.”
Addressing the pivotal role of students in the ousting of the Hasina administration, Yunus acknowledged the sacrifices made by young people, referring to their involvement as part of a “revolution.” He highlighted his intention to engage the younger generation in shaping policy.
Furthermore, Yunus called for continued support from Japan, Bangladesh’s largest donor, during this crucial transition period. He stressed that Japan’s assistance is vital to stabilizing Bangladesh’s economy and fostering a democratic foundation in the nation.
Syeda Rizwana Hasan, the Adviser for Environment, Forests, and Climate Change, announced today that steps will be taken to restrict the use of polythene shopping bags to safeguard future generations.
Starting from October 1, polythene bags will be banned in shopping malls, followed by a ban in kitchen markets from November 1.
“Everyone must take responsibility and stop using polythene voluntarily. Action against polythene producers will begin from November 1,” Rizwana Hasan stated during a seminar.
The Department of Environment (DoE) organized the seminar to raise public awareness about alternatives to banned polythene bags.
Rizwana Hasan highlighted that the restriction on polythene will be executed in phases according to legal provisions, and discussions with shopping centers and store owners are ongoing to ensure a smooth transition.
She also announced plans to make the government secretariat a plastic-free zone by December.
Other speakers at the seminar included Environment Secretary Dr. Farhina Ahmed, DoE Director General Dr. Abdul Hamid, Director Rajinara Begum, President of the Shop Owners Association Muhammad Helal Uddin, and Md. Arifur Rahman Bhuiyan, Assistant Professor of Environmental Science at BUP. They discussed the harmful effects of polythene and the need for alternative products.
Earlier, Rizwana Hasan inaugurated a fair showcasing eco-friendly alternatives to polythene bags and visited 24 stalls. The fair featured products from government and private entrepreneurs, including reusable bags, jute bags, paper bags, and items made from bamboo and cane.
