The Export income and import costs are rising and remittances are falling in Bangladesh as the country’s foreign exchange reserves continue to rise. Report Newspapers of Bangladesh.
This time too, the reserve has set a record in growth. in the second week of October, it rose to $4,7billion. earlier last June, the reserve had climbed to $4,64billion.
The reserve has not increased so much before. the reserve swelled as export earnings increased and foreign donations were waived off despite reduced remittance flows.
Meanwhile, despite the increase in reserves, the demand for the dollar in the market has suddenly increased. this has led to an increase in the price of banks as well as in the open market. questions have been raised as to why the dollar has risen despite having so much reserve.
Moreover, dollar supply from the central bank has been increased to control prices in the market.
Remittance flows had increased over the last financial year. remittances have come down for three consecutive months in the current financial year. remittances fell by zero.19 per cent last July-September. it fell by 19.75 per cent in September. it rose by 45.65 per cent in September last fiscal. July 2020-21 increased by 48.54 per cent in September.
Remittances rose by 36.10 per cent in the entire financial year. 2 per cent incentive spared officially against remittances. some banks are giving one more per cent more incentives. as a result, expatriates are getting incentives of up to 3 per cent against remittances.
Meanwhile, export earnings are growing considerably. growth in the sector was 38 per cent last September. it was 3.5 per cent in the same month of the previous fiscal. growth in July-September of the current financial year was 11.37 per cent. growth was 2.5 per cent at the same time last fiscal.
Export earnings are likely to increase further in the coming days. because the demand for export products in the world has increased. meanwhile, import costs have also increased along with increased export income.
Import costs rose by 73 per cent in august for the current financial year (2021-22). import costs fell by more than 6.5 per cent in august last fiscal. import costs rose by 46 per cent in July-august this fiscal. It fell by 14 per cent in the same period last fiscal. the increase in exports has led to an increase in the import of raw materials under back to back LC.
In addition, the rate of import of industrial machinery is also increasing. the quantity of import of food items has also increased. foreign exchange expenditure rates have also increased in foreign travel and treatment after the corona. due to these reasons, overall imports have started increasing.
Foreign loans and grant waivers have also increased. together, the income is higher than the government’s foreign spending. this is increasing the country’s foreign exchange reserves. an average of $350 to $4billion is required to meet the import cost per month. as such, it is possible to meet the import cost of 10 to 11 months with the reserve possible.
However, according to the safe standards of the international finance fund (IMF), a country has to have the same reserve to meet import costs of at least three months. as such, Bangladesh’s reserves are much safer.
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Meanwhile, Bangladesh has started investing money from the reserve. Sri Lanka has already been loaned from the reserve. government bills and bonds from different countries are also being invested. as a result, the rate at which income from the reserve slipped in corona is now expected to increase again.
Because interest rates have already started escalating in the international money arcade.