Govt expects gross reserves to reach $34b by June next year

The interim government expects the country's gross foreign exchange reserves to rise to $34.4 billion by the end of the fiscal year (FY) 2025–26, buoyed by strong remittance inflows, export performance, and budgetary support from development partners.

This target is set in the upcoming national budget, which is now being prepared and slated for announcement on June 2. 

As of May 24, Bangladesh's gross reserves stood at $25.70 billion, up from $24.16 billion on the same date last year, according to the Bangladesh Bank (BB).

The central bank now maintains two figures for forex reserves reporting.

One follows a method recommended by the International Monetary Fund (IMF), known as BPM6. Under this formula, net reserves were $20.47 billion as of May 24.

According to the finance ministry, a stable exchange rate, rising remittances, and higher interest rates across the financial sector will help boost reserves further.

Besides, the government is expected to receive around $3.3 billion in external financing by June this year, from a mix of bilateral and multilateral partners including the IMF, Asian Development Bank, and World Bank.

These inflows are expected to reinforce the foreign reserve position.

The government projected that forex reserves may reach $31.8 billion by June of FY25.

While speaking at an event, Bangladesh Bank Governor Ahsan H Mansur recently said gross reserves could rise to around $30 billion by the end of June, up from about $27 billion at present, as the economy continues to recover.

"Some progress has already been made. Reserves have started growing, and we expect them to rise further in the coming days," said the governor.

He added that the longer-term goal is to push reserves to $40 billion, but this would take time.

The government also projected that exports would grow at 10 percent in the next fiscal year, up from 9 percent in the revised budget for this year.   

Between July and March of the current fiscal year, exports grew 9.5 percent, according to the central bank.

Meanwhile, the import growth target has been raised to 8 percent for FY26, compared to the revised 5 percent for the current year.

Remittance growth is projected at 8 percent for the next fiscal year. In the current fiscal year's revised budget, the target has been 20 percent.

Finance ministry officials said remittances have already made records in this fiscal year. Given this increased inflow, the growth for the next year is projected. If remittances grow further than this, forex performance will be even better. 

Remittance inflows have already broken records. Between July last year and May 11 this year, Bangladeshi expatriates sent home $25.45 billion, a 28 percent year-on-year rise, surpassing the previous high of $24.77 billion recorded in FY2020–21.

This increase has been attributed to a combination of factors, such as the narrowing of the gap between official and unofficial exchange rates, tougher action against money laundering, and a renewed sense of patriotism among Bangladeshis living abroad.