Noted economist Prof Rehman Sobhan has said it will be risky if foreign reserves continue to decline and eventually fall to $10 billion, then the country might not get any assistance from the International Monetary Fund (IMF).
Speaking at an event organised by the Economic Reporters Forum (ERF) on Monday (9 October), Rehman Sobhan said he could see a resemblance with Sri Lanka in the way that Bangladesh's reserves have been continuously decreasing.
Rehman Sobhan, also chairman of the Center for Policy Dialogue (CPD), said, "However, Bangladesh's economy is undoubtedly in better shape than Sri Lanka."
"We have a large export sector. Along with that, there is remittance or expatriate income, which is much higher than Sri Lanka," he further said, adding that is why he does not believe that the overall economic situation of Bangladesh can ever be like that of Sri Lanka.
Inward remittances dropped to $1.34 billion in September, lowest in 41 months, according to the Bangladesh Bank data released on Sunday, though August saw the highest number of workers going abroad in a single month and a record 11.3 lakh in FY23.
Bangladesh's foreign exchange reserves continue to slide and stood at $21.15 billion on 26 September in line with the IMF reserve calculation method, according to central bank data.
In this regard, noting that remittance inflow in the country has been declining, he said, "But that does not mean that expatriate income has actually decreased. Instead of coming through formal channels, expatriate income is coming through informal channels – the main medium being hundi.
"Instead of being deposited in the Bangladesh Bank, reserves are being deposited in hundi, therefore, outside the country."
So, it has become quite convenient for those who smuggle money abroad, he remarked.
Mentioning that there has been a big change in the culture of the country's financial sector, the economist said, "Non-repayment after borrowing has become the norm.
"It is not done by large businesses. Rather, those who are involved in such events introduce themselves as big politicians," he said.
Bangladesh's foreign exchange reserves continue to slide and stood at $21.15 billion on 26 September in line with the IMF reserve calculation method, according to central bank data.
