Dollar crisis inherited from the Awami League government has largely subsided, with steady growth in remittance inflows and export revenue under the interim administration.
These two crucial economic indicators have bolstered the country's foreign exchange reserves, albeit at a fluctuating pace.
However, the rising cost of imports and the settlement of previously incurred import bills have placed significant pressure on reserves.
The gross foreign exchange reserve has fallen below $20 billion, standing at $25.221 billion as of 22 January, as per Bangladesh Bank's calculations.
Under the IMF's BPM6 standard, the figure is lower, at $19.94 billion.
At the beginning of the year, the gross reserve was recorded at $26.20 billion, while the BPM6 measure placed it at $21.36 billion.
The usable reserves, which account for short-term liabilities, stand closer to $15 billion, according to central bank sources.
This amount is sufficient to cover three months’ worth of imports at a rate of $5 billion per month—the minimum threshold typically considered safe for an economy.
During the tenure of the Awami League government, usable reserves had fallen below $14 billion.
To address the crisis, the government had resorted to borrowing dollars from external sources and commercial banks.
Since the interim government assumed power in August, the central bank has halted dollar sales from its reserves under the new governor and is exploring alternative sources to replenish the foreign exchange stock.
Despite these efforts, the repayment of earlier liabilities has led to a partial decline in reserves.
The central bank does not publicly disclose figures for usable reserves, which are calculated after excluding the IMF's SDR allocations, foreign exchange clearing accounts, and overdue bills to the Asian Clearing Union.
Experts underscore the need for maintaining at least three months’ import coverage in reserves to ensure economic stability.
While the interim government is taking steps to stabilise the reserve situation, balancing payments amidst mounting import costs remains a pressing challenge.
