Foreign exchange reserves
At this moment of great economic depression which has spread its wings all across the globe, it is indeed a surprising thing to see Bangladesh Bank declaring their highest ever Foreign Exchange Reserves which have crossed a little more than 6 billion dollars. Their ignoring the recession riddled economy and their complacence about the so-called highest ever Foreign Exchange Reserves have really stunned the whole nation.
Foreign Exchange Reserves refer to the deposits of a foreign currency held by a central bank that allow governments to keep their currencies stable and reduce the effect of economic shocks. The question is whether the whole credit goes to The Bangladesh Bank for achieving this amount of Foreign Exchange Reserves. If we roll back the film, the Anti Corruption drive by the recent caretaker government comes into picture which reduced business investment, trading and all sorts of activities to a large extent.
Investors are still confused whether to go for investment with their undeclared money for import of capital machinery which is definitely playing a role in keeping the foreign exchange reserves intact. Imports of fashionable items and more importantly the cut in import of petroleum products due to increased usage of CNG have also positively framed the current foreign exchange reserve. The increase in foreign remittance can also be considered temporary because people who are coming back after losing their jobs abroad are not taking risk of Hundi, rather they are sending the money through proper channel before coming back. New incentives should be considered by Bangladesh Bank so that such remittances come through proper channel in future also. Above all, huge numbers of immigrants who stay abroad illegally prefer to send foreign exchange through illegal means which does not come in the accounts of Bangladesh Bank as foreign exchange. A mechanism needs to be evolved to take account of this foreign exchange which will also add to the foreign exchange reserves.
It is time for Bangladesh Bank to concentrate and focus on banking activities so that proper investment is made in our economy.
A recent estimation by the Bangladesh Bank that foreign exchange reserves will cross 10 billion dollars can only be considered an authentic statement if measures to achieve it are spelt out properly and business and import houses are activated to attain the target.
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