Bangladesh's reserves fall below $20 billion after settling ACU payments

Bangladesh’s foreign exchange reserves have dropped below $20 billion following a $1.75 billion payment to the Asian Clearing Union (ACU), according to Arif Hossain Khan, Executive Director and Spokesperson of Bangladesh Bank, on Sunday.  

As per Bangladesh Bank data, the country's gross foreign exchange reserves now stand at $25 billion after settling the ACU liabilities. However, based on the International Monetary Fund’s (IMF) BPM-6 calculation, the reserves are currently at $19.70 billion.  

Previously, on March 6, Bangladesh’s gross foreign exchange reserves were recorded at $26.60 billion, with BPM-6 reserves at $21.40 billion.  

The Asian Clearing Union (ACU) is a payment mechanism that facilitates the settlement of import and export transactions among its member nations. The ACU comprises central banks from Bangladesh, Bhutan, India, Iran, the Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka, helping streamline trade payments and minimize the demand for hard currency reserves in bilateral trade.  

The Balance of Payments and International Investment Position Manual (BPM-6), established by the IMF, standardizes the compilation of balance of payments and international investment position statistics. It offers a more precise assessment of a country’s usable reserves by excluding certain non-liquid reserve assets, ensuring consistency in global financial reporting.