Bangladesh's Reserves Drop Below $20 bn After ACU Payment

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Bangladesh's foreign exchange reserves have fallen below $20 billion following a $1.75 billion payment to the Asian Clearing Union (ACU), according to Arif Hossain Khan, Executive Director and Spokesperson of Bangladesh Bank, on Sunday.

Data from Bangladesh Bank reveals that the country's gross foreign exchange reserves have dropped to $25 billion after the ACU payment. However, using the International Monetary Fund's (IMF) BPM-6 calculation, the reserves are now valued at $19.70 billion.

As of March 6, the country's gross reserves stood at $26.60 billion, with BPM-6 reserves at $21.40 billion.

The ACU is a payment system that facilitates the settlement of import and export transactions between its member countries, including Bangladesh, Bhutan, India, Iran, the Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka. The system helps streamline trade payments and reduces the reliance on hard currency reserves for bilateral trade.

The IMF's Balance of Payments and International Investment Position Manual (BPM-6) offers a more accurate picture of usable reserves by excluding certain types of reserves that are not readily accessible. This methodology ensures consistency in reporting and provides a clearer understanding of a country's liquid foreign exchange holdings.