** Enforcement of Covid-19 health guidelines urgently necessary ** Launch passengers have turned to buses after opening of the Padma Bridge. Empty launches are seen passing idle time at Sadar Ghat launch terminal on Tuesday. NN photo ** Cattle-loaded trucks easy prey to extortions ** US wants fair elections in BD:Envoy ** Experts say worst, substandard ** PM mulls area-based specific time power cuts to save fuel ** Blacksmiths passing busy time for Eid-ul-Azha ** Sri Lanka admits bankruptcy, crisis to drag through 2023 ** KFC Brings Texas BBQ Zinger in Town ** Niko graft case against Khaleda Zia, charge hearing deferred ** Tipu murder case, probe report on Aug 31 ** Teacher Utpal murder case, prime accused father confesses ** Bangladesh sends humanitarian assistance to Afghan people ** CEC is irrelevant for assuring free election unless parliament is dissolved ** Power generation falls, causing frequent load-shedding ** The Padma River is about to devour the Chawkrajpur Govt Primary School at Bagha, Rajshahi. The school is now five metres away from the erosion point. The headmaster of the school, Mujibur Rahman, urged the local administration to build an embankment so that the school could still be saved. The Upazila Education Officer, Mir Mamunur Rahman, said that the school could be shifted to a different place if the erosion situation demands so. As there was no embankment there, one kilometre road built at the cost of Tk 42 lakh at Chawkrajpur is already gone into the river. NN photo ** Illegal Indian cattle in Bangladesh market, local farmers frustrated ** Kushtia BCL leader sets himself on fire at Press Club ** Tanners set to procure about 1 cr pieces of rawhide despite fund crisis ** Bangladesh logs four month's highest 12 deaths from Covid ** We see no end to overwhelming lawlessness everywhere: Problem is muscle politics ** Remittance dips 15pc amid forex crisis ** Lawyer’s six bank accounts frozen ** CEC assures OECD envoys to hold inclusive, acceptable polls ** Exports hit record $ 52b in outgoing fiscal year **

Forex reserve spent mainly for importing industrial raw materials, equipment

24 June 2022

Staff Reporter :
The country's foreign exchange reserve  is mainly spent on the import of raw materials and equipment in the industrial sector. At least 56 percent of the dollars are being spent to bring industrial raw materials and equipments.
Most of the dollars are spent on fuel oil as a single product, which is 9.5 percent of the total import, according to multiple sources of Bangladesh Bank (BB).
Though the country's maximum foreign reserves are earned from the industrial sector and followed by remittances sent by the Bangladeshi expatriates.
Three percent dollars only are added to the country's foreign reserve as foreign investments and loans.
Bangladesh has recently experienced foreign exchange crisis due to increase of excessive import expenditure and decreasing of remittances.
In such a situation, the department concerned now calculating foreign exchange income and expenditure. At the same time, it is being analyzed in which sectors foreign exchange earnings can be increased and in which sectors it can be reduced.
Both the government and the central bank have taken multifaceted steps to increase foreign exchange earnings and reduce expenditure to address the problems.
Sources in the Bangladesh Bank (BB) said, some more steps will be taken soon in this regard.
According to sources, there are four main sources of foreign exchange earnings in this country. These are export earnings, remittances sent by expatriates, foreign investment and foreign loans.
The two main sectors of foreign exchange expenditures are import and repayment of foreign loans.
Besides, there is a very limited amount of travel, study abroad and some foreign exchange spent in the medical sector.
Bangladesh earns about 7,200 crore dollars in foreign exchange every year on an average. In contrast, the cost is more than 6,000 crore dollars. A large part of dollars are spent for travel, medical and education purposes from the remaining 700 crore dollars, BB sources said.
A small amount of dollars is added to the foreign  
exchange reserves. After reducing the corona pandemic situation, the sudden rise of demand and price hike of goods in the international market due to the Russia-Ukraine war pushed up the cost of imports.
The export earnings have not been increased in the same way as import expenditure has increased, BB sources said.
The remittances earning have decreased, which increased the pressure on the country's reserves.
The total 60 percent import expenditures are met by the export earnings and the remaining 40 percent is paid from remittances, BB sources said.
According to BB sources, a total of 6,058 crore dollars have been spent for import purposes from July to March under the current financial year, while a total of 4,717 crore dollars are earned from export sector from July to May.
Of the import expenditure, about 3,500 crore dollars have been spent on importing industrial raw materials and equipment, which is 57 percent of the total import expenditure.
Bangladesh received a total of 1,919 crore dollars as remittance in the same period.
Besides, the average foreign investment received the country of 260 crore dollars and 220 crore dollars as loans, while Bangladesh has to pay the loan at 250 crore dollars a year, the BB sources said.
However, the most imported single product is fuel oil, which costs more than the other imported products. The import costs have gone up more than doubled in recent times due to the price hike of fuel oil in the international market.
Bangladesh has spent a total of 557 crore dollars during July-March under the current financial year, which is 9.20 percent of the total imports, BB sources said. Of the imported oils, crude oil imports amounted to 100 crore dollars and refined oil 446 crore dollars.

Add Rate