Foreign exchange reserves are poised to drop below $22 billion as the country settles a $1.2 billion import bill with the Asian Clearing Union (ACU), compared to the $23.06 billion recorded on August 30. The ACU payment for July-August is projected to be $100 million higher than in previous months due to increasing imports from Asian countries, despite an overall decrease in imports.
Experts recommend ceasing the sale of dollars from reserves to prevent further erosion and instead allowing the market to determine the dollar rate. This strategy could stimulate remittances and export proceeds, aiding long-term reserve recovery. The decline in reserves comes as a result of reduced imports in the past fiscal year, driven by a shortage of US dollars, which led to a decrease in the opening of letters of credit. The central bank’s substantial dollar sales to settle import bills have also contributed to the reserve decline. Under the IMF loan agreement, net reserves were expected to reach $25.31 billion in September and $26 billion by year-end, but they are now set to fall below $22 billion following the ACU payment.
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