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Bangladesh’s foreign exchange reserves stood at US$31.28 billion as of the latest update, according to official data released by the Bangladesh Bank (BB).

However, under the International Monetary Fund’s (IMF) Balance of Payments and International Investment Position Manual (BPM6) methodology, the country’s usable reserves were recorded at $26.39 billion—around $4.9 billion lower than the gross figure.

The difference arises because the IMF calculation excludes certain reserve components such as funds already committed for the Asian Clearing Union (ACU), export development finance, and other encumbered assets not readily available for balance of payments support.

Economists note that while the gross figure reflects Bangladesh’s overall external asset position, the IMF methodology provides a more realistic measure of liquid reserves that can be deployed in times of stress.

Why reserves matter

Foreign exchange reserves are crucial for maintaining exchange rate stability, meeting external debt obligations, and ensuring adequate import cover. Economists generally recommend a minimum of three months’ import coverage. Based on the IMF figure, reserves now provide roughly five months of import cover, offering a cushion against external shocks.

Recent stability

The reserves have strengthened in recent months, buoyed by steady remittance inflows, robust export earnings crossing the $4 billion mark for several consecutive months, and dollar purchases by the central bank under the free-floating exchange rate regime. Since July 13, BB has directly purchased nearly $1.9 billion from banks to absorb excess supply and maintain stability in the forex market.

The broader picture

Despite this improvement, analysts caution that Bangladesh faces persistent domestic economic challenges, including weak private sector credit growth, heavy reliance on bank borrowing by the government, and slow progress in revenue collection. These structural weaknesses could strain the external sector if global conditions worsen.

A senior BB official said the central bank remains committed to maintaining a stable reserve buffer while balancing exchange rate flexibility. “The improvement in reserves provides some breathing space, but prudent management is essential as import payments and external debt obligations remain high,” he noted.