Current account deficit shrinks
The country's current account deficit narrowed in 2016-17 thanks to a decline in imports in the last month of the fiscal year.
The deficit came down to $1.48 billion at the end of the fiscal year, after hitting $2.1 billion in the first 11 months, central bank data shows.
It shrank as imports went down 8.30 percent in June although full fiscal year's imports were up 9 percent.
Last month, Bangladesh Bank projected the deficit to be $1.6 billion.
Bangladesh's current account was in surplus of $4.26 billion in 2015-16 riding on sluggish export earnings and declining remittance.
The central bank's monetary policy statement, released last month, has forecast the deficit may nearly double to $2.72 billion in 2017-18 as imports grew.
The current account balance set foot into the negative territory for the first time in four years in the first quarter of 2016-17 when the deficit stood at $504 million. It has been expanding since then. The last time the current account was in the deficit was way back in 2011-12.
The widening of the current account deficit is still not a matter of concern, said a senior official of the central bank.
He said the existing deficit is less than 1 percent of gross domestic product whereas a country is allowed to run a deficit of up to 2-3 percent of GDP.
The banker said foreign currency reserves are still growing and now stand at a satisfactory level.
In August, reserves were $33.08 billion, up from $30.3 billion a year ago.
The central bank official said the rising trade deficit could put some pressure on exchange rates. The deficit has already affected the exchange rate as the taka has depreciated against the US dollar.
The exchange rate was Tk 80.7 per dollar on August 9, up from Tk 78.4 on the same day last year, according to the central bank.
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