Bangladesh's foreign currency reserve made a slight rebound on Wednesday after the World Bank disbursed budget support credit of $507 million, helping reserves to rise above the $30 billion-mark.
It now stands at $30.35 billion as of May 10.
Payment of import bills totalling $1.18 billion through the Asian Clearing Union (ACU) mechanism caused forex reserves to drop to $29.85 billion on Tuesday.
The country is currently under stress due to high demand but a decreasing supply of the greenback amid ongoing macroeconomic volatility on a global and domestic scale.
Bangladesh Bank spokesperson Md Mezbaul Haque attributed the latest installment from the World Bank as the primary factor behind the rise in reserves.
He noted that they are anticipating additional loan assistance from other organizations in the coming days.
If these assistances are received, it is hoped that the country's reserves could reach $32 billion by June next.
The loan arrives at a critical time for Bangladesh, which has been struggling with strained reserves for months due to higher imports versus lower-than-anticipated export earnings and remittances.
Despite the central bank's attempts at tightening the belt to save dollars and implementing policies to restrict luxury and unnecessary imports, the pressure on reserves has yet to subside.
This is mainly due to growing sales of US dollars by the central bank to commercial banks to settle their overseas transactions.
The persistent decline in reserves, particularly in the greenback, is causing concern for the economy, which is struggling to meet the International Monetary Fund's (IMF) $24.46 billion ceiling for net international reserves by June.
The gross forex reserve hit a record high of $48 billion in August 2021, when the Bangladesh Bank began injecting the greenback into the forex market.
This was in response to the growing import payments, triggered by the country's economic recovery from the Covid pandemic.
To assist commercial banks in settling letter of credit (LC) transactions, the central bank has sold over $12 billion from its reserve between July 2022 and May 7, 2023.
In the previous FY22, the central bank sold $7.62 billion to commercial banks.
