Bangladesh fumbles in bid to avert crisis

DHAKA - Stop-gap measures by the Bangladesh government to stave off economic crisis look increasingly fragile, with foreign currency reserves declining again last month, reversing a brief recovery in January after restrictions were placed on imports.

The foreign currency reserve fell to US$9.15 billion this week, nearly back down to the $9.11 billion recorded in early January before a government request led to banks not opening letters of credit for imports, effectively crimping an outflow of funds. Reserves, contrary to a long-term trend, climbed to $10.2 billion following the curb on imports, which dropped 27% in January compared with a year earlier. Higher remittances from overseas workers also helped boost the reserves.

The import curb was only the latest quick-fix by the government of Prime Minister Sheikh Hasina to bolster an economy crippled by power cuts that prevent exporters, particularly garment manufacturers, using their factories to full capacity. Read More