Bangladesh forex reserves climb above $29 billion, reaching the highest level since 2023 amid rising remittances and controlled import demand

Bangladesh’s foreign exchange reserves have rebounded to $29.47 billion, the highest level recorded since 12 July 2023, the Bangladesh Bank reported on Tuesday.

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The increase marks a recovery in the central bank’s reserves under the IMF’s updated BPM6 framework, reflecting funds readily available for import bills and international obligations.

The rebound has been driven by rising remittances, moderated import demand, and strategic central bank dollar purchases.

Reserves had slipped to $24 billion by May 2024 following heightened import activity and global commodity price pressures.

Gross reserves have also strengthened, reaching $34.06 billion, the highest since November 2022.

Bangladesh Bank purchased $4.3 billion in US dollars through interbank auctions during the current fiscal year, reversing a previous strategy of selling dollars to support the taka.

In its monetary policy statement for January June, the central bank said it would continue to prioritise exchange rate flexibility while leveraging strong remittance inflows and improved reserves to shield the economy from external shocks.

Analysts note that the gradual recovery in reserves began after August 2024, following a surge in remittance inflows after the transition from the Awami League government.

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Rising foreign currency inflows and controlled imports are expected to sustain the positive trajectory in the coming months.