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The country’s foreign exchange reserve has crossed US$9.0-billion mark for the first time, after a substantial amount of fund was received from a multilateral donor agency, officials said Tuesday.

The International Monetary Fund (IMF) has released funds worth $630 million as part of the special drawing rights (SDR) allocation, which has been made to all 186 IMF members.

The foreign exchange reserve rose to around $9.18 billion on the day from $8.53 billion of the previous day following disbursement of the fund by the IMF, the central bank officials said.

“The country’s foreign exchange reserve crossed $9.0 billion on the day setting a new record in the history of Bangladesh,” Deputy Governor of the Bangladesh Bank (BB) Ziaul Hassan Siddiqui told the FE.

He also said the foreign exchange reserve may decline slightly this week after a routine payment is made to the Asian Clearing Union (ACU).

The central bank is set to pay $530 million to the ACU against imports for the July-August period of this calendar year, the officials confirmed.

“We expect that the foreign exchange reserve would stay at around $9.0 billion even after making payment to the ACU,” Mr. Siddiqui said without elaborating.

The Washington-based multilateral donor agency would provide additional $105 million shortly to bolster the country’s foreign exchange reserve in the wake of the global economic recession, the BB officials said.

The total $735 would be given not as loan, but as part of a global financial watchdog’s stepped up effort to inject liquidity in the central banks across the globe, they added.

The G-20 countries raised the fund size of IMF by $250 billion in April to increase SDR quota of members proportionately and the disbursement would be completed in September this year.

Currently, Bangladesh has a quota of SDR 533.30 million or $834.63 million in the IMF. Besides, the central bank continues its intervention in the inter-bank foreign exchange market through purchase of the US currency directly from commercial banks, which has also pushed the foreign exchange reserve up.

As part of the move, the central bank of Bangladesh purchased $1.024 billion from commercial banks until September 1 this fiscal.In fiscal 2008-09, the BB bought a total of $1.48 billion directly from the commercial banks against only $202.50 million of the previous fiscal, according to the central bank statistics.

The ACU is an arrangement among Bangladesh, Bhutan, India, Iran, Myanmar, Nepal, Pakistan and Sri Lanka to settle payments for intra-regional transactions through the participating central banks on a multilateral basis.

Under the existing ACU provision, settlement of any balance and the accrued interests is made among its member countries at the end of every two months.

Source: Financial Express

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The International Monetary Fund (IMF) would give Bangladesh $735 million in late August and early September to bolster its foreign exchange reserve in the wake of the global economic recession.The amount would be given not as a loan, but as a part of the global financial watchdog’s stepped up effort to inject liquidity in the central banks across the globe.IMF resident representative Jonathan Dunn told the FE that first chunk of the $630 million would be disbursed to Bangladesh Bank (BB) on August 28 and the second chunk of $105 million would come on September 9.”Bangladesh is receiving the fund as part of the special drawing rights (SDR) allocation, which has been made to all 186 IMF members,” he said.The IMF Bangladesh chief made the comments, clarifying the BB governor’s earlier remarks that the country would get around $700 million soft loan facility from the Washington-based multilateral agency.”The media report which said that the IMF will give $700 million soft loan is not based on fact,” he said at a seminar in the city.The G-20 countires raised the fund size of IMF by $250 billion in April to increase SDR quota of members proportionately and the disbursement would be completed in Spetember, he said.Currently, Bangladesh has a quota of SDR 533.30 million or $834.63 million in the IMF.The fund from IMF would come as a further boost to the country’s foreign exchange reserve which is now hovering around $8.20 billion.”The injection of such a huge fund would take the reserve to around $9.0 billion, covering an import payment of at least five months,” a central bank official said.”It means our reserve would hold sway to any fallout stemming from the global downturn,” he said.A visiting IMF team had earlier offered loan assistance to Bangladesh to stabilise its balance of payments (BOPs) and help the country face the fallout from the global recession, said the BB governor.Bangladesh has said no to the offer, as the country’s banking system escaped the global onslaught on banks, while exports rode out the crisis thanks to its cheap prices.The country last received more than half a billion dollar anti-poverty softy loan facility from the IMF during the tenure of the Bangladesh Nationalist Party (BNP)-led government.

Source: Financial Express

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