Trade deficit reaches all-time high

Bangladesh's trade deficit hit a historic high of $30.81 billion in the first 11 months of fiscal year 2021-22, further putting pressure on macroeconomic aspects.

The country has been facing a higher trade deficit in recent months due to the escalation of imports against lower exports.

Trade deficit in the first 11 months of FY22 stood at $20.70 billion, according to Bangladesh Bank data.

This has already created a tremendous pressure on the foreign exchange reserves, prompting a foreign exchange crisis in the banking sector.

Between July and May last fiscal year, imports increased to $75.40 billion, up 39% year-on-year when exports grew 33% to $44.58 billion.

The higher trade deficit also registered a record current account deficit of $17.23 billion in the first 11 months of FY22 in contrast to a deficit of $2.78 billion a year ago.

These also squeezed the foreign exchange reserves, which stood at $41.86 billion as of June 29, down $46.08 billion from a year ago.

The majority of the banks are now facing inadequate US dollars due to the high imports, which has consequently left an adverse impact on the exchange rate of the taka against the dollar.

The exchange rate stood at Tk93.45 each dollar on Monday compared to Tk84.80 a year before.