Bangladesh’s foreign currency reserves have fallen below $20 billion after a month. This follows the central bank’s clearing of import bills through the Asian Clearing Union (ACU).

The ACU is a system for settling payments among eight countries in the region. Bangladesh’s central bank processed import bills worth $1.29 billion last week, a central banker reported.

As a result, reserves dropped to $19.99 billion on Wednesday from $21.15 billion on March 6, according to Bangladesh Bank’s calculations based on the IMF’s Balance of Payment Manual. It was $19.94 billion on February 14.

The global market’s instability due to the Russia-Ukraine conflict has raised commodity prices. This has impacted import-dependent countries like Bangladesh.

Meanwhile, exports and remittances, the primary sources of US dollars, haven’t met expectations. Although both sectors improved significantly in February, they remained below anticipated levels.

Remittances surged by 39% in February to $2.16 billion, the highest in eight months. Expatriate Bangladeshis took advantage of better exchange rates offered by some banks.

Imports, which have historically boosted Bangladesh’s forex reserves, dropped by 7.94% to $5.87 billion in January. The current reserves level is far below the record $40.7 billion reached in August 2021.