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UPDATE 1-Bangladesh forex reserves rise in February
March 1, 2012 / 6:37 AM / 6 years ago

UPDATE 1-Bangladesh forex reserves rise in February

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DHAKA, March 1 (Reuters) - Bangladesh’s foreign exchange reserves rose to $10.07 billion at the end of February, the highest since November, from $9.38 billion in January, thanks to an improving trade balance and strong remittances, the central bank said on Thursday.

However, the reserves were down from $11.16 billion a year earlier.

Foreign exchange reserves hit a record $11.32 billion in April last year but have since eased due to soaring imports, mainly of oil, while exports and remittances have grown more slowly amid a faltering global economy.

“The scenario has started to change owing to a slide in imports while Bangladeshis working overseas sent more money home,” a senior central bank official said.

The reserves could fall again due to scheduled bi-monthly payments of around $700 million to the Asian Clearing Union.

Meanwhile, Bangladesh is in final discussion to get a $1 billion loan from the International Monetary Fund under the Extended Credit Facility .

Analysts, however, said the rising trend could be short-lived if the government fails to secure the IMF loan and continue costly oil imports for power generation.

The South Asian country routinely runs a trade deficit but remittances, key foreign exchange earners along with readymade garments exports for the $100 billion economy, helped offset the trade shortfall.

Bangladesh in January received a record monthly high of $1.2 billion in remittances from citizens abroad, taking the total to nearly $7.3 billion since July. And the central bank expects remittances to cross the $12 billion threshold in the current fiscal year ending in June.

Over the month, the local currency taka has also started to gain amid strong remittances and a drop in imports of luxury items after the central bank tightened credit growth.

The taka was the second worst-performing currency among Asian peers after the Indian rupee, losing 15 percent against the U.S. dollar in 2011. In January it lost 3 percent value before reversing. (Reporting by Ruma Paul; Editing by Anis Ahmed)

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