BD’s forex reserves fall to $25.3b after ACU payment

Business Report :

Bangladesh’s foreign exchange reserves fell to $25.30 billion on Sunday -according to the International Monetary Fund’s calculation (BPM-6) after the country cleared $1.50 billion in import bills under the Asian Clearing Union (ACU).

The ACU was established on Dec 9, 1974, as an initiative of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP).

Its membership is open to the central banks of countries within the UNESCAP geographic region. ACU’s headquarters is located in Tehran, the capital of Iran.

The current members of ACU are Bangladesh, Bhutan, India, Iran, Myanmar, Nepal, Pakistan, Sri Lanka, and the Maldives. However, Sri Lanka withdrew from ACU in October 2022 due to its reserve crisis.

Under the ACU, member countries settle their import-export liabilities every two months. On average, Bangladesh Bank settles about $1.25 billion in liabilities every two months, leading to a temporary decline in reserves after each payment.

Following the payment, Bangladesh’s gross reserves stood at $30.04 billion overall, according to Bangladesh Bank data. The foreign exchange reserves, which had fallen below $20 billion in the first half of last year, have been on the rise in recent months, buoyed by increased inflows of remittances and export earnings.
On September 4 last year, the reserves were $20.55 billion, according to the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6) published by the IMF.
In its July issue of Exchange Rate & Foreign Exchange Market Dynamics, Bangladesh Bank said pressure in the foreign exchange market continued easing on the back of favorable developments in the balance of payments-a summary of a country’s transactions with the rest of the world. The central bank added that the surplus in the overall balance of payments rose to $3.4 billion during the 2024-25 fiscal year, with a significant improvement in the current account balance driven by a surge in remittance inflows, strong export growth, and weak import demand.