Net forex reserves can clear four months’ import bill: CPD

Bangladesh now has the ability to clear import payments of four months if the country’s net forex reserves are taken into consideration, the Centre for Policy Dialogue (CPD) said today.

The nation’s gross forex reserves hit $35.8 billion in October this year, down from $46.5 billion in the same period last year, it said.

The overall balance came down to (-) $4.87 billion in the July-October period this year, which was (-) $1.34 billion in the same period previous year.

In the same period, Bangladesh’s ability to make import payments also reduced from 6.2 months to 5.2 months if the gross reserves are considered, the local think-tank said.

Fahmida Khatun, executive director of the CPD, shared the information while presenting a paper on “Managing the economic crisis, CPD’s policy recommendations”, at a programme at Brac Centre Inn in Dhaka.

In the paper, the CPD also recommended some steps which the country should now take to tackled the situation.

“Whilst the rise in the import payments for capital machinery could be due to one-time bulk imports for mega projects, there is a need for greater surveillance of import payments, to forestall over-invoicing, particularly because imports of capital machinery are mostly zero-tariffed and consequently, the possibility of over-invoicing in case of imports of these items is that much greater,” it said.

The import categorisation made by Bangladesh Bank should be made in a more transparent manner, and the respective headings should be made public, the CPD said.

Legal measures must be taken, relevant laws enforced and violations brought to justice to forestall future violations, it also recommended.