Foreign Reserves Fall After ACU Payments

Bangladesh’s foreign currency reserves have declined marginally following the settlement of payments through the Asian Clearing Union (ACU), despite sustained high inflows from remittances. The central bank has continued purchasing US dollars from the market, leveraging strong remittance flows to maintain reserve stability.

Before the ACU payments for January–February, reserves stood at $35.49 billion. After settling $1.37 billion under ACU obligations, reserves decreased to $34.10 billion. According to the International Monetary Fund’s (IMF) BPM6 methodology, reserves are recorded at $29.38 billion.

Reserve History

Bangladesh’s foreign reserves reached a historic high of $48 billion in August 2021. However, large-scale dollar sales in subsequent years led to a continuous decline, with reserves dropping to $20.48 billion just before the previous government left office.

Since the interim government assumed responsibility, stricter measures against illicit capital outflows have encouraged remittance inflows through formal channels, strengthening reserve levels and stabilising the exchange rate.

Remittance Inflows

Expatriates sent $23.53 billion in remittances from the start of the current fiscal year until 7 March, compared with $19.26 billion during the same period last year—a 22 per cent increase.

High remittance inflows, following a 27 per cent growth in the previous fiscal year, have helped maintain the taka-dollar exchange rate at around BDT 122 per USD, supporting market stability amid global currency fluctuations.

Economists observe that continued monitoring of ACU obligations and careful management of the currency market are essential to maintaining reserve adequacy. The strong remittance trend remains a key factor in supporting Bangladesh’s foreign currency stability.