The current account deficit widened 3.5 times in just one month on the back of a rise in imports.

On October 31, the deficit stood at $1.26 billion, which was $357 million at the end of September, according to central bank statistics.

The reason for the fast widening of current account deficit is the greater rise of imports than exports, said a Bangladesh Bank official.

In October, imports shot up around 18 percent year-on-year, while exports dropped 7.63 percent.

Between July and October, imports rose 14.64 percent year-on-year and exports slipped 0.91 percent.

The current account situation after the conclusion of the first four months of the fiscal year is in stark contrast to a year ago, when it was $793 million in the surplus.

However, the situation is not all doom and gloom: a closer inspection of the statistics reveals that the items whose imports rose would go on to boost investment.

Imports of capital machinery soared 28.20 percent year-on-year, intermediary goods 14.26 percent and petroleum products 35 percent, according to the letter of credit settlement statistics.

During the period, LC openings for food grain imports accelerated around 30 percent, industrial raw materials 13 percent and other products 23 percent. As import rose after about two and a half years, the central bank has once again started selling dollars to the forex market, a reverse of its recent trend of buying greenbacks.

BB started selling greenbacks on November 24 and as of December 4, $228 million has been sold. The central bank did not sell any dollar this week as the supply was found to be adequate.

Kazi Saidur Rahman, a general manager of BB, said both exports and remittance increased in November, which resulted in a smooth supply of dollar in the interbank forex market.

In November, remittance grew 10.12 percent and exports 9.27 percent.

The transaction volume in the interbank forex market stood at $ 161 million yesterday.

With the increase in demand for dollars, the exchange rate, which has been on a constant decline, has been rising too. Each dollar sold forTk 77.85 in the interbank forex market on Wednesday, compared to Tk 77.69 on November 30.