Tuesday, 8 December 2009

BANGLADESH: Utilizing remittances and reserve productively

A sound foreign currency reserve is the desired macro-economic objective of all countries. For, a good reserve helps to underwrite a country's economic viability by creating assurances of smooth conduct of its foreign trade. It has been always considered that a country must have a reserve position to be able to pay for its expected imported operations for a minimum reasonable period of time, let us say three to four months. This margin is considered the lowest limit, falling below which level may invite macro-economic instability. The current reserve of Bangladesh, $10.5 billion, should be enough to support the country's import activities for about two to six months. Thus, the present size of the reserve can be a sort of satisfaction for managers of the economy. Read more

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