STAR BUSINESS REPORT

Bangladesh’s foreign exchange reserves strengthened in early 2026, though rising global energy prices could threaten the gains, according to a report by the General Economics Division (GED) of the Planning Commission.

Gross reserves stood at $35.11 billion in February 2026, up from $33.19 billion in December 2025, according to the Economic Update and Outlook (March 2026) released yesterday.

BPM6 reserves rose correspondingly, from $28.58 billion to $30.36 billion over the same period. The GED attributed the short-term buildup to strong inflows and improved external liquidity.

However, it warned that the global energy crisis is likely to accelerate the drawdown of reserves, as higher fuel import costs -- a major component of Bangladesh’s import basket -- require more foreign currency.

“This could place downward pressure on the exchange rate and potentially lead to currency depreciation if not carefully managed,” it stressed.

The GED noted that countries facing similar external pressures have responded with exchange rate flexibility, import rationalisation, and strategic reserve management.

For Bangladesh, a balanced approach combining measured exchange rate adjustment, demand management, and external financing support may be necessary to maintain reserve adequacy.

“Without such measures, the reserve position may weaken despite recent gains,” the report cautioned.

REMITTANCES PROVIDE CUSHION

Remittance inflows continue to play a crucial stabilising role in Bangladesh’s external sector, helping offset rising import payments amid the prolonged global energy crisis.

The GED noted a notable year-on-year increase in recent months, suggesting a possible structural improvement, though short-term volatility persists.