Little hope of improving forex reserves in near future: Sayed Mahbubur Rahman

The current external push presents significant challenges for our country. 

While our current account balance has shown improvement, the financial account balance has unexpectedly turned negative in FY23, after maintaining a positive trend for several years. Unfortunately, our exports are not growing at the desired pace, which further complicates the situation.

Despite the rise in the number of expatriate wage earners, we are yet to witness a substantial impact on our remittance income. 

Additionally, both foreign direct income (FDI) and foreign investment in the capital market have not shown notable signs of improvement. 

Consequently, the recent enhancement in our current account balance can be primarily attributed to a reduction in imports.

The finance minister has expressed the government's determination to address this issue and work towards improvement. However, the possibility of achieving this in the near future seems uncertain. The ongoing recession in many European countries poses a significant hurdle as it diminishes our prospects of increasing exports.

Moreover, exporters have not provided encouraging messages, leaving us with considerable doubts about the feasibility of further import cuts in such circumstances. 

Manufacturers argue that reducing imports could lead to factory closures or decreased production due to a shortage of imported raw materials. Consequently, paying employees could become a challenging task.

Furthermore, diminishing imports of capital machinery hinder expansion and prevent the creation of new employment opportunities. Given this situation, it is unclear whether the trend of reducing imports should persist.

Sayed Mahbubur Rahman is a managing director at the Mutual Trust Bank.