Bangladesh's current account deficit (CAD) is widening due to the rising costs of imports, falling remittances, and Covid-19, informed Finance Minister AHM Mustafa Kamal.
During the July-April period of the ongoing fiscal year, the current account deficit stood at $15.3 billion, he notified the parliament while presenting the proposed national budget for the 2022-2023 fiscal year on Thursday.
Providing an overview of the country's latest economic situation, the minister said that due to the sluggish economic recovery in Bangladesh's major overseas labour markets because of the pandemic and the ongoing Russia-Ukraine conflict, there has been a stagnation in remittance earning in the current fiscal.
There has also been a stress on the exchange rate originating from the increased demand for US dollar in the local market, the minister said adding that the central bank released $6.08 billion up to 1 June 2022 in the local foreign exchange market to manage this crisis.
On the other hand, import volume has increased at a record high level as Bangladesh further recovers from the pandemic fallout, he added.
The finance minister said that the Bangladeshi taka depreciated against the greenback by around 7.9% from 1 July of the current fiscal year to 6 June, 2022.
Meanwhile, the amount of foreign exchange reserve was $48 billion in October last year.
It has now declined to $42 billion this year, Kamal furthered at the parliament.
Thus, along with containing inflation, maintaining imports at a reasonable volume and keeping foreign reserves stable would be a great challenge for the government, the minister said.