Bangladesh's Forex Reserve Crosses $6 Billion Again

June 26, 2008 9:13 p.m. EST

Dhaka, Bangladesh (AHN) - Bangladesh's foreign exchange reserve crossed the $6 billion mark once again on Thursday thanks to disbursement of soft loans by multilateral donor agencies and a robust growth in remittances.

"We have been able to cross the six billion U.S. dollar mark for the second time in Bangladesh," a senior official of the Bangladesh Bank (BB), the country's central bank, told AHN.

The reserve crossed the $6 billion mark for the first time on Feb. 28.

The foreign exchange reserve rose to $6.02 billion.

The official, however, said the reserve may decline slightly in the first week of next month after routine payments are made to the Asian Clearing Union (ACU).

Under the existing ACU provision, settlement of any balance along with the accrued interest is made among its member countries every two months.

The ACU comprises Bangladesh, Bhutan, India, Iran, Burma (officially known as Myanmar), Nepal, Pakistan and Sri Lanka. It is an arrangement for settling intra-regional transactions through the participating central banks on a multilateral basis.

The reserve went up as the World Bank (WB) recently released $315 million and the Asian Development Bank (ADB) $32 million as soft loans, officials said.

The WB has released two funds worth $315 million to assist Bangladesh in mitigating the pressure on the 2007-28 budget and to implement wide-ranging governance, economic policy and energy reform agenda.

The ADB has already released a fund amounting to $32 million under a power sector development project.

Both the funds have pushed up the foreign exchange reserve to the present level that will be able to meet payment of import bills of over three months, they added.

On the other hand, Bangladesh received $7.163 billion in remittances during the 12-month period that ended in May, which was 31.14 percent more than the corresponding period of the previous year, according to the central bank statistics.