Bangladesh’s foreign exchange reserves have once again fallen, dipping below $31 billion after the central bank cleared outstanding import bills under the Asian Clearing Union (ACU). The Bangladesh Bank confirmed on Sunday that reserves stood at $30.30 billion following the settlement of $1.5 billion in ACU bills for July and August. Under the International Monetary Fund’s (IMF) Balance of Payments Manual-6 (BPM6), which deducts certain liabilities, the reserves are now calculated at a much lower $25.39 billion.
Reserves Slipped After Brief Recovery: Only a few days earlier, stronger inflows of remittances had pushed the country’s gross reserves back over the $31 billion mark. According to central bank data, reserves reached $31.18 billion on Thursday, equivalent to $26.19 billion in BPM6 terms.
On August 24, the gross reserves were reported at $30.86 billion, while the BPM6-compliant figure stood at $25.87 billion. Officials said the decline was expected, as the bi-monthly ACU settlement cycle requires large outflows to pay for accumulated import bills. What is ACU: The Asian Clearing Union (ACU) is an inter-regional settlement mechanism established among nine central banks in Asia-Bangladesh, India, Iran, Nepal, Pakistan, Sri Lanka, Myanmar, Bhutan, and the Maldives.
Unlike other international trade transactions, where payments are made immediately, member countries of the ACU settle their bilateral import-export bills every two months.
Bangladesh, with its high volume of imports from neighboring countries, often sees a sharp dip in reserves after these payments.
Pressure on External Balance: Economists say the recurring fall in reserves highlights Bangladesh’s fragile external position. Although remittance inflows provided temporary relief in late August, large import settlements continue to drain reserves.
“The ACU cycle is predictable, but the challenge is that Bangladesh does not have strong enough inflows to offset these big outflows,” said a senior treasury analyst at a private bank. “This makes the overall external balance vulnerable.”
The IMF has already raised concerns about Bangladesh’s reserve adequacy. Under its monitoring framework, the lower BPM6 measure is considered more reliable, as it excludes funds already committed for various liabilities.
Outlook: With import restrictions still in place and the taka under pressure, policymakers are struggling to stabilize reserves at a comfortable level. Analysts warn that unless exports recover and remittance flows sustain their momentum, reserves may remain under strain in the coming months.