Despite an increased inflow of dollars, the foreign currency reserves of Bangladesh’s commercial banks have fallen, with the nostro account balances dropping by $1.12 billion (18.38%) from $6.1 billion in June to $4.98 billion in September. Factors include economic uncertainty, political instability, reduced import activity, and offshore banking challenges. High international interest rates and foreign banks’ credit limit cuts have curtailed new loans while repayments continue. Although foreign exchange supply has improved, economic stagnation, decreased letter of credit (LC) openings, and reduced foreign credit limits persist. Meanwhile, Bangladesh Bank’s reserves also fell by $1.75 billion, reaching $19.93 billion in mid-October. The governor’s measures to stabilize reserves by settling outstanding liabilities are expected to improve the situation gradually.
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