Bangladesh’s foreign exchange reserves have surpassed $21 billion, marking a significant increase, according to a statement released by Bangladesh Bank on Sunday (December 29). The current reserves, as per the International Monetary Fund (IMF) standards, stand at $21.33 billion, while the central bank’s calculation places it at $26.9 billion.

This substantial growth of over $1 billion in just a week has been attributed to a steady inflow of remittances and the disbursement of loans, as confirmed by Bangladesh Bank's spokesperson, Executive Director Husne Ara Shikha.

Earlier, reserves had dipped to $18.46 billion on November 11 following a $1.5 billion payment to the Asian Clearing Union (ACU) for the September-October period. In the subsequent 48 days, reserves have increased by $2.87 billion.

According to Bangladesh Bank, under the BPM-6 calculation method, the reserves were $20.16 billion last Monday, while the gross reserves reported by the bank stood at $24.98 billion. By the end of Sunday, this figure had risen to $26.09 billion.

The country’s foreign exchange reserves had reached an all-time high of $48 billion in August 2021. However, they declined steadily, dropping to $20.39 billion in July this year. This trend has reversed since the government transition on August 5, with reserves now consistently growing.

This growth is primarily due to measures such as curbing loan fraud, preventing capital flight, improving governance in the banking sector, and ceasing unrestricted dollar sales from reserves. Consequently, the demand for informal currency exchange (hundi) has decreased, leading to an increase in remittances through banking channels.

Additionally, export earnings from July to November totaled $19.9 billion, reflecting an 11.76% year-on-year growth compared to $17.81 billion in the same period last year.

Under the previous Awami League government, reserves fell below $19 billion twice, during which reserves were bolstered through foreign loans and dollar purchases from commercial banks. The current administration, however, has halted dollar sales from reserves, while inflows from various sources continue to contribute to the consistent reserve growth.