Bangladesh Bank has introduced a major policy shift in the way it reports the country’s foreign exchange reserves by publishing the Net International Reserve (NIR) for the first time, offering what economists regard as the clearest picture yet of the country’s usable foreign exchange holdings.
Until now, the central bank had disclosed only the gross foreign exchange reserves and, more recently, reserves calculated under the IMF’s Balance of Payments and International Investment Position Manual, Sixth Edition (BPM6). The publication of the NIR marks the first official disclosure of the country’s usable reserves after accounting for foreign liabilities and other obligations.
According to the latest reserve data released on Tuesday after Bangladesh settled its import payments through the Asian Clearing Union (ACU), the country’s gross foreign exchange reserves stood at $36.17 billion, while the official reserve under the BPM6 standard was $31.72 billion. The newly published Net International Reserve (NIR) amounted to $27.93 billion.
The figures show that Bangladesh’s usable reserves are about $8.24 billion lower than its gross reserves.
Although the central bank has long used the NIR for programme monitoring with the International Monetary Fund (IMF), it had never disclosed the figure publicly. The NIR is one of the key performance indicators under IMF-supported programmes because it measures the amount of foreign exchange that remains available after deducting short-term external liabilities and other obligations.
The disclosure also comes at a critical time. While Bangladesh’s $5.5 billion IMF loan programme remains in limbo after the suspension of pending disbursements, the country is preparing to negotiate a new financing package with the Fund. An IMF mission is expected to visit Bangladesh in this month, and the publication of the NIR comes ahead of those discussions.
In simple terms, gross reserves can be compared to the total balance in a family’s bank account. However, if part of that money has already been committed to repay loans or meet other obligations, it cannot be freely used. The NIR represents the amount that remains available after those liabilities are deducted.
Under the central bank’s methodology, the BPM6 reserve is calculated after excluding certain assets that do not qualify under international accounting standards. The NIR is then derived by deducting short-term foreign liabilities, financial obligations and other adjustments from the official reserve, resulting in a substantially lower but more realistic measure of usable reserves.
Sector insiders say the publication of the NIR could help end years of confusion over Bangladesh’s reserve position.
