Bangladesh's foreign exchange reserves experienced a notable dip today, falling to $34.85 billion from the previous $36.38 billion. This decrease comes immediately after the country cleared $1.64 billion in regional import bills through the Asian Clearing Union (ACU).

The ACU, an organization based in Tehran, is designed to facilitate payment settlements among its nine member countries: Bangladesh, India, Bhutan, Iran, the Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka. Under this mechanism, Bangladesh is required to clear its import bills every two months, a routine process that naturally leads to a temporary, cyclical decline in its national reserves after each payment is made.

According to the guidelines of the Sixth Edition of the Balance of Payments and International Investment Position Manual, published by the International Monetary Fund (IMF), the forex reserves stood at $29.98 billion today following the ACU payment. This represents a drop from $31.51 billion recorded just one day prior, according to data from Bangladesh Bank (BB).

Efforts to Stabilize the Market

Beyond simply meeting import bills through the ACU, Bangladesh Bank is actively injecting foreign currency into the domestic market to maintain stability. This ongoing intervention is a primary reason why forex reserves have continued to experience a downward trend.

For instance, on November 4, Bangladesh Bank sold $100 million from its foreign exchange reserves through an auction. This move was specifically aimed at stabilizing the currency market amid escalating import costs, particularly the rising expenses associated with fuel imports.

Historical Context and Recent Policies

The handling of the country's reserves has seen significant shifts in recent years. Before the fall of the Awami League government in 2024, the central bank had been selling massive amounts of dollars from its reserves over a period of three years. As a direct result of these prolonged sales, the national reserves, which had impressively exceeded $48 billion in August 2021, plummeted to $25.92 billion.

However, the approach changed significantly after Ahsan H Mansur assumed the role of governor in August 2024. Upon taking office, he made it explicitly clear that the central bank would halt the sale of dollars. The present governor has strictly maintained this position. Thanks to this policy shift, the reserves began to recover, crossing the $37 billion mark on June 29 and eventually reaching $37.41 billion on September 1.