Reserves Dip Below $28bn Following Major ACU Settlement

Bangladesh’s gross foreign exchange reserves have retreated below the $28 billion threshold following a substantial settlement of import bills. The decline comes immediately after a period of rapid accumulation, highlighting the ongoing volatility in the nation’s external financial position.

The Impact of ACU Settlements

On Thursday, 8 January 2026, Arif Hossain Khan, Executive Director and Spokesperson for Bangladesh Bank, confirmed that the central bank had cleared $1.53 billion in liabilities to the Asian Clearing Union (ACU). Consequently, the gross reserves now stand at $27.85 billion, down from a brief peak of $29.19 billion recorded just days prior.

The ACU, headquartered in Tehran, is a regional payment arrangement established in 1974 to facilitate multilateral transactions among nine member nations: Bangladesh, Bhutan, India, Iran, Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka. Settlements are typically cleared every two months, often resulting in a sharp, periodic “dip” in the reserves of participating countries.

A Fortnight of Rapid Growth

Prior to this mandatory outflow, the central bank had achieved a remarkable feat, bolstering reserves by nearly $1 billion in a mere fifteen days. On 22 December 2025, the reserves—calculated under the International Monetary Fund’s BPM6 manual—stood at $28.04 billion. By early January, this figure had climbed to over $29 billion.

This growth was primarily driven by:

Surging Remittances: Increased inflows from expatriates provided a steady supply of greenbacks to the local banking system.

Strategic Auctions: Bangladesh Bank actively purchased US dollars from commercial banks through auctions to prevent the local currency from appreciating too rapidly.

Market Intervention: During the first six months of the 2025–26 fiscal year, the central bank purchased a total of $3.54 billion to stabilise the exchange rate.

Table: Foreign Exchange Reserve Fluctuations (Dec 2025 – Jan 2026)

Outlook for Fiscal Stability

Senior officials at the central bank remain optimistic, noting that the supply of US dollars in the banking sector is improving. The aggressive purchase of $411 million in the first week of January 2026 alone suggests that the bank is prioritising the rebuilding of its “buffer” to meet IMF conditions and future import obligations.

While the ACU payment has caused a temporary contraction, the underlying trend of increased remittance and steady dollar procurement indicates a move towards greater liquidity in the forex market.