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Forex Reserves Rise as Governor Assures Economic Stability

Rtv News

  20 Oct 2024, 19:10
Photo: Collected

Bangladesh Bank Governor Ahsan H. Mansur has reported an increase in foreign currency reserves since the interim government took office, following the fall of the Sheikh Hasina administration amid a student-led uprising against inequality. He assured that if things go smoothly, economic stability could return within the next year.

Key Stats:
Foreign Reserves (as of October 8, 2024): Net Reserves $19.82 billion, Gross Reserves $24.97 billion
Debt Repayments: Government Debt Initially $2.5 billion for power, fuel, and essential services; Repaid in Last 2 Months $1.8 billion; Remaining Debt $700 million
Foreign Debt Burden: $103 billion
Loan Plans: Central bank preparing to secure $10 billion in new international loans
Outlook: Target to clear remaining debt in 2 months; Economic stability expected to return within 1 year

In an interview with UNB on Sunday (October 20), the governor said that while reserves were previously depleting by $1.3 billion per month under the previous government, they are now on a positive trend. He added that significant payments have been made to settle debts related to fertilizer, electricity, and some loans owed to Adani and Chevron, reducing the overall debt burden.

The governor further disclosed that the government owes around $2.5 billion to various service providers for electricity, fuel, and other essential services. However, in the past two months, the central bank has repaid $1.8 billion, bringing the outstanding debt down to $700 million.

He expressed optimism that reducing these debts would ease pressure on the economy. "Our target is to clear the remaining debt within the next two months. If we succeed, market liquidity will improve, leading to a boost in economic activities," he added.

As of October 8, according to the IMF's BPM6 reserve calculation method, Bangladesh’s net foreign reserves stood at $19.82 billion, with the gross reserves at $24.97 billion.

The central bank is also preparing to secure an additional $10 billion in loans from international organizations. However, Governor Mansur expressed concerns over the growing burden of foreign debt, which currently stands at $103 billion. He cautioned that patience will be required over the next year to manage the situation effectively.

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