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IMF sets forex reserve cap at $24.4bn for June’23

February 4, 2023 9:03 pm
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The International Monetary Fund (IMF) has set a floor cap for Bangladesh’s forex reserves in June later this year, in line with its BPM6 definition.

Bangladesh will have to maintain net international reserves of at least $24.46 billion, in quantitative performance criteria (QPC) of its $4.7 billion loan programs approved last week to Bangladesh to help maintain its macroeconomic stability.

The net international reserves are gross reserves minus central bank’s foreign currency liabilities and reserves earmarked for quasi-fiscal activities.

In December this year the reserve position must stand at least at $26.81 billion, both the figures will be checked in the first two reviews.

Bangladesh does not publish BPM6-based forex-reserve positions, but the government has pledged to the IMF that it will begin to do so by this June.

On February 1, according to the central bank data, total foreign currency reserve stood at $32.19 billion which included various liabilities, including unpaid letters of credit, some of which turned into short-term loans, money diverted for the Export Development Fund (EDF), the loan given to Sri Lanka and also for the Payra Port development.

Experts and economists believe Bangladesh’s net international reserve stands somewhere around $20 billion, if all liabilities are excluded and thus maintaining a $24.46 billion gross reserve will be rather difficult.

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