Maintaining strong foreign exchange reserves is one step amongst many towards achieving middle-income status
A healthy foreign exchange reserve is crucial for the continued progress of any economy.
For Bangladesh, as it rises towards middle income status, nurturing robust Forex reserves has never been more important.
It is an understanding of its importance that has allowed Bangladesh’s foreign reserves to swell to almost $32 billion -- registering more than 450% growth in the last 10 years.
This is good news.
There is no doubt that this has been possible, to a great extent, due to our burgeoning export basket, a steady influx of remittances, and encouraging government policies.
Maintaining strong foreign exchange reserves is one step amongst many towards achieving middle income status, and highlights the importance of long-term economic planning moving forward.
We must not forget that healthy foreign exchange reserves not only contribute to a nurturing economic environment, while also fostering confidence among foreign investors and aid providers to boost FDI, they also serve as a safety net for potential economic crises which may occur in the future.
But the time for action is far from over, and it is now important to ensure that Bangladesh continues to build on this success.
One way for Bangladesh to capitalize on its current position would be to utilize the potential that excess foreign reserves offer, and use it to further strengthen its economy through investment in the right sectors, such as green energy and sovereign bonds.
These are the important decisions we must make now if we are to ensure consistent sustainable development in the future.
At the end of the day, with the journey towards economic prosperity a long one, it is long-term planning that remains key.